FutureFocus March 8, 2018: Paying for Sequential Stays in a Unified PPS Payment System

Lisa Remington

In this week's FutureFocus, we provide insights into how MedPAC (The Medicare Payment Advisory Commission that reports to Congress) is discussing different ways to pay for sequential stays in a unified payment system for post-acute. In the report, MedPAC provides recommendations for 2018 and beyond. In another article, we explore how ACOs are managing high-risk patients. The insights provide ways post-acute providers can provide value. Our last article lends perspectives on how much Medicare households spend on health-related expenses.

Lisa Remington, President, Remington Health Strategy Group

The Medicare Payment Advisory Commission (MEDPAC) is discussing different ways to pay for sequential stays in a unified payment system for post-acute care. This is a must read.


In response to a Congressional mandate (the Improving Medicare Post-Acute Care Transformation Act of 2014), in 2016 the Commission recommended the features of a prospective payment system (PPS) spanning the four post-acute care (PAC) settings and considered the effects of moving to such a system. In 2017, the Commission examined implementation issues, including when a PAC PPS could be implemented, whether to include a transition, and the level of payments.

2018 Discussions

This year, the Commission continues to examine implementation issues, focusing on accurate payment for sequential PAC stays.

Recommendation in 2018

Blend the current setting-specific relative weights and PAC PPS relative weights to correct biases in current payment system

Possible refinements to the PAC PPS

PAC PPS would establish accurate payments for most stays. Payment for later home health stays may need to be adjusted.


  • Include a payment adjuster for later home health stays in the PAC PPS design
  • Approaches to define stays when a patient is treated in place
  • Strategies to deter unnecessary subsequent PAC stays.

Key Points

This presentation reviews work comparing the characteristics, costs, and payments of stays in a sequence of post-acute care.

Read the presentation