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2020 Payments for Home Health and Hospice: Reduce Base Payments, 5% & 2%

The Medicare Payment Advisory Commission (MedPAC) is required by law to annually review Medicare payment policies and make recommendations to the Congress. In its March 2019 report to the Congress, MedPAC makes payment policy recommendations for nine provider sectors in fee-for-service (FFS) Medicare and reviews the status of Medicare Advantage (MA) and Medicare’s prescription drug benefit (Part D). MedPAC also recommends that the Congress replace the four current hospital quality payment programs with a single streamlined program—the hospital value incentive program (HVIP). Lastly, as mandated by the Congress, we report on incentives for prescribing opioid and non-opioid pain treatment under Medicare’s hospital inpatient and outpatient payment systems.

FEE-FOR-SERVICE PAYMENT UPDATE RECOMMENDATIONS

To meet its legislative mandate, the principal focus of the March report is MedPAC’s recommendations for annual payment rate adjustments (or “updates”) under Medicare’s various FFS payment systems. MedPAC assesses payment adequacy by examining beneficiary access to care (supply of providers, service use, and access surveys); quality of care; providers’ access to capital; and provider costs and Medicare payments, where available. MedPAC’s recommendations for the 2020 payment year are listed below.

Skilled nursing facility services

  • The Secretary should proceed to revise the skilled nursing facility prospective payment system in fiscal year 2020 and should annually recalibrate the relative weights of the case mix groups to maintain alignment of payments and costs.
  • The Congress should eliminate the fiscal year 2020 update to the Medicare base payment rates for skilled nursing facilities.

Home health agency services

  • • For 2020, the Congress should reduce the calendar year 2019 Medicare base payment rate for home health agencies by 5 percent.

Inpatient rehabilitation facility services

  • For 2020, Congress should reduce the fiscal year 2019 Medicare base payment rate for inpatient rehabilitation facilities by 5 percent.

Long-term care hospital services

  • For 2020, the Secretary should increase the fiscal year 2019 Medicare base payment rates for long-term care hospitals by 2 percent.

Hospice services

  • For 2020, the Congress should reduce the fiscal year 2019 Medicare base payment rates for hospice providers by 2 percent.

Hospitals: Inpatient and outpatient services

The Congress should:

  • Replace Medicare’s current hospital quality programs with a new hospital value incentive program (HVIP) that:
  • includes a small set of population-based outcome, patient experience, and value measures;
  • scores all hospitals based on the same absolute and prospectively set performance targets;
  • accounts for differences in patients’ social risk factors by distributing payment adjustments through peer grouping, and
  • For 2020, update the 2019 base payment rates for acute care hospitals by 2 percent. The difference between the update recommendation and the amount specified in current law should be used to increase payments in a new HVIP.

Physicians and other health professional services

  • For calendar year 2020, the Congress should increase the calendar year 2019 Medicare payment rates for physician and other health professional services by the amount specified in current law.

Ambulatory surgical center services

  • The Congress should eliminate the calendar year 2020 update to the Medicare conversion factor for ambulatory surgical centers.
  • The Secretary should require ambulatory surgical centers to report cost data.

Outpatient dialysis services

  • For calendar year (CY) 2020, the Congress should update the CY 2019 Medicare end-stage renal disease prospective payment system base rate by the amount determined in current law.

For additional information about future payment discussions for post-acute providers go to: Payment Changes for the Future of Home Health: Bundled versus Patient Stay

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May/June 2019

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