MedPAC recommends Congress accelerate common PAC PPS

The Medicare Payment Advisory Commission today approved a recommendation for Congress to implement a common prospective payment system for post-acute care providers by 2021, which would accelerate the current timeline by more than four years. The Improving Medicare Post-Acute Care Transformation Act of 2014 calls for the development of a common PPS that could replace the separate payment systems for home health, skilled nursing facilities, inpatient rehabilitation facilities and long-term care hospitals, but does not authorize its implementation. Today’s recommendation calls for the new PPS to be implemented with an aggregate payment reduction of 5%, rather than in a budget-neutral manner; concurrent regulatory alignment with the new payment system; and periodic re-weighting and rebasing to update costs and payments. In addition, providers would be subject to a three-year transition from the current payment systems, which they would have the option to bypass. The commission estimates today’s recommendation would reduce Medicare spending by $5-$10 billion in 2021 and 2022 combined. MedPAC will include the recommendation in its June report to Congress, and commission staff plan to continue working on the issue over the next 12 months.