FutureFocus January 17, 2018: New Voluntary Bundled Payment Model: Impact To Post-Acute Providers

Lisa Remington

In this week's FutureFocus, we address the new voluntary bundled payment model and the impact to post-acute providers. Participants may receive payments on 32 different clinical episodes. Medicare-enrolled or not Medicare enrolled providers or suppliers may participate. We provide the details. In another article, the American Hospital Association comments on MedPAC's proposal for changes to post-acute payments and their concerns with moving this forward. 

Lisa Remington, President, Remington Health Strategy Group

The American Hospital Association (AHA) again urged the MedPAC commission not to use a proposed blend of new and current weights to calculate 2019 and 2020 payments under its prototype post-acute care prospective payment system, citing concerns with the proposal's feasibility.

The Association also urged MedPAC to support the 2019 market-basket increases for long-term care hospitals and hospital-based skilled nursing facilities under current law, rather than proposals to eliminate them, noting the "significant underpayment" of LTCH site-neutral cases and "extremely negative" Medicare margins of hospital-based SNFs. 

Background

Increasing The Equity Of Payments Within Each PAC Setting

During the last MedPAC November meeting, Commission staff presented new work on “increasing the equity of payments within each post-acute care setting.” This session is related to MedPAC’s broader effort to increase the accuracy of PAC payment, a goal strongly supported by the AHA, as well as the statutorily mandated development of a PAC PPS prototype, a model that raised substantial concerns as described in AHA’s report titled “A Critique of MedPAC’s Post-Acute Care Prospective Payment System Prototype.”

"For example, the PAC PPS’s 100-variable regression model creates a unique payment amount for each patient. However, the current home health, skilled nursing facility, inpatient rehabilitation facility, and long-term care hospital PPSs each have a distinct number of pre-set payment categories, case-weight schemes, episode lengths, and other unique design elements."

The November presentation included a discussion of a preliminary policy recommendation to use a blend of MedPAC’s new PAC PPS weights and current setting-specific weights for the calculation of 2019 and 2020 PAC payments under the current payment systems. The November presentation and discussion lacked detail explaining how this policy concept could actually be implemented. Given the incongruent design of the PAC PPS relative to the four existing PAC PPSs, and the limited information shared thus far, such feasibility is far from a given. For example, the PAC PPS’s 100-variable regression model creates a unique payment amount for each patient. However, the current home health, skilled nursing facility, inpatient rehabilitation facility, and long-term care hospital PPSs each have a distinct number of pre-set payment categories, case-weight schemes, episode lengths, and other unique design elements.

Compounding these concerns, the PAC PPS relative weights have not been shared with the public, which counters the Commission’s commitment to transparency and prevents any external validation. Given these incongruities, we are concerned about the feasibility of implementing this recommendation, which would require CMS to, in some way, cross-walk the current diverse elements of the four PPSs with the new unified PAC PPS relative weights. We urge the Commission not to proceed with this recommendation absent further exploration of its feasibility and increased transparency with the public.