Medicare Payment Advisory Commission (MedPAC) made several payment recommendations that could affect rehab providers in private practices, skilled nursing facilities (SNF) and home health agencies (HHA).

Washington, DC:  Medicare Payment Advisory Commission (MedPAC) made several payment recommendations that could affect physical therapists in private practices and those working in skilled nursing facilities (SNF) and for home health agencies (HHA). In its March report, MedPAC calls on Congress to repeal the sustainable growth rate (SGR) and replace it with a 10-year path of statutory fee-schedule updates. This path comprises a freeze in current payment levels for primary care and, for all other services, annual payment reductions of 5.9% for 3 years, followed by a freeze. Under the 10-year update, the Department of Health and Human Services (HHS) should increase the shared savings opportunity for physicians and other providers who join or lead 2-sided-risk accountable care organizations. The commission also recommends that HHS regularly collect data-including service volume and work time-from a cohort of efficient practices to establish more accurate work and practice expense values. The initial round of data collection should be completed within 3 years. Additionally, the report addresses the need to identify overpriced fee-schedule services and reduce their relative value units (RVU) accordingly. In the SNF setting, MedPAC suggests that Congress eliminate the market basket update for 2013 and revise the prospective payment system (PPS).  Specifically, MedPAC calls for raising SNF Medicare Part A payments for medically complex care and lowering SNF Medicare Part A payments for high-intensity therapy, with the goal of making payments more equitable across facilities. Rebasing payments should begin in 2014, with an initial reduction of 4% and subsequent reductions over an appropriate transition until Medicare's payments are better aligned with providers' costs. The commission also proposes reducing payments to SNFs with relatively high risk-adjusted rates of rehospitalization during Medicare-covered stays to counter the financial incentive that SNFs and hospitals have to rehospitalize beneficiaries. MedPAC calls on HHS and the Office of the Inspector General to conduct medical review activities in counties that have aberrant home health utilization. The report urges HHS to suspend payment and the enrollment of new home health care providers if they indicate significant fraud. Recommendations for HHA payment include a 2-year rebasing of home health rates in 2013 and eliminating the market basket update for 2012.  Additionally, the home health case-mix system should be revised to rely on patient characteristics to set payment for therapy and nontherapy services and should no longer use the number of therapy visits as a payment factor.  MedPAC also suggests establishing a per episode copay for home health episodes that are not preceded by hospitalization or post-acute care use. These recommendations will be considered by Congress and the Centers for Medicare and Medicaid Services (CMS) for implementation into current Medicare policies.