FutureFocus March 7, 2018: New Discharge Planning Protocols For Post-Acute Providers Under Discussion

Lisa Remington

In this week’s FutureFocus, we provide detailed insights into discussions MedPAC is having on changing protocols for current discharge planning practices. This could be a game changer for post-acute providers and patient choice. This is a must read. In our Washington Report, we call attention to the Trump Administration proposal for a Medicare post-acute payment system.

Lisa Remington, President, Remington Health Strategy Group

The Trump administration has now gotten into the act of calling for a Medicare post-acute payment system. As included in the administration’s FY 2019 budget proposal, such a system would “address excessive payment for post-acute care providers by establishing a unified payment system based on patients’ clinical needs rather than the site of care.”

The attention-getter in this proposal is that it envisions $80.2 billion in savings over 10 years (2019-2028). However, keep in mind, this is one of the Trump administration’s many legislative proposals, requiring congressional approval first.

Nevertheless, the Trump administration is in line with earlier proposals. The Medicare Payment Advisory Commission (MedPAC) in its June 2017 report to Congress recommended that Congress direct the Department of Health & Human Services (HHS) to: implement a PPS for post-acute care beginning in 2021 with a three-year transition; lower aggregate payments by 5 percent, absent prior reductions to the level of payments; concurrently, begin to align setting-specific regulatory requirements; and, periodically revise and rebase payments, as needed, to keep payments aligned with the cost of care. Plus, the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act), which authorized MedPAC to devise a post-acute payment system for Congress to consider, envisions a schedule for implementation sometime after 2024.

“For FY 2019 to FY 2023, the four primary post-acute care settings, including skilled nursing facilities, home health agencies, inpatient rehabilitation facilities, and long-term care hospitals, will receive a lower annual Medicare payment update,” according to the administration’s FY 2019 Budget in Brief for HHS. “Beginning in FY 2024, this proposal implements a unified post-acute care payment system that spans these settings, with payments based on episodes of care and patient characteristics rather than the site of service.”

"The attention-getter in this proposal is that it envisions $80.2 billion in savings over 10 years (2019-2028). However, keep in mind, this is one of the Trump administration’s many legislative proposals, requiring congressional approval first."

Overall, the Budget requests $68.4 billion for HHS, a $17.9 billion or 21-percent decrease from the 2017 enacted level. This Budget funding level includes additional funds for Program Integrity and implementing the 21st Century CURES Act; but, proposes $295 billion in mandatory savings, “helping to put Federal spending on a sustainable path.” In addition, the Budget optimistically includes $675 billion in net mandatory savings across HHS and the Department of the Treasury to repeal and replace the Affordable Care Act.

As part of its Program Integrity emphasis, the administration would increase funding for the HHS Office of Inspector General. “OIG will continue its work from FY 2018 to address fraud, waste, and abuse in prescription drugs, including abuse and diversion of opioids, while using additional funding to address fraud, waste and abuse in home health and other non-institutional-based services and to strengthen oversight of Medicare Advantage and Medicaid Program Integrity,” the Budget in Brief states.

Each year an administration proposes a budget, and then it’s up to Congress to act. One legislative Program Integrity proposal sure to generate controversy among stakeholders--if not opposition in Congress—would expand prior authorization to additional Medicare fee-for-service items at high risk of fraud, waste, and abuse.

Prior Authorization for “All” Fee-for-Service?

“Currently, CMS has authority to require prior authorization for specified Medicare fee-for-service items and services,” the Budget in Brief states. “This proposal extends that authority to all Medicare fee-for-service items and services, specifically those items that are at high risk for fraud, waste, and abuse. By allowing prior authorization on additional items and services, CMS can ensure in advance that the correct payment goes to the right provider for the appropriate service, and avoid future audits on those payments.”

The Obama administration had attempted this idea as a demonstration for home health in certain states, which lawmakers opposed and the incoming Trump administration abandoned in a gesture of deregulation.

By: Ronald M. Schwartz, Writer, The Remington Report