MedPAC Releases March 2022 Report on Medicare Payment Policy

Mary Madison, RN, RAC-CT, CDP
Clinical Consultant – Briggs Healthcare

Washington, DC, March 15, 2022—Today, the Medicare Payment Advisory Commission (MedPAC) releases its March 2022 Report to the Congress: Medicare Payment Policy. The report includes MedPAC’s analyses of payment adequacy in traditional fee-for-service (FFS) Medicare and reviews the status of Medicare Advantage (MA) and the prescription drug benefit (Part D). This report also satisfies four additional legislative mandates that address: a payment adjustment for certain low volume acute care hospitals, recent changes to the home health payment system, the performance of certain specialized MA plans, and a value-based payment program for post-acute care services.

The Commission is acutely aware of the ongoing coronavirus pandemic. Medicare beneficiaries— particularly those who reside in nursing homes, have end-stage renal disease, are dually eligible for Medicaid, or are members of racial or ethnic minority groups—have been disproportionately affected by the pandemic. The health care workforce continues to experience extreme stress and heavy and unpredictable workloads given the multiple “waves” or surges in hospital admissions and impacts on other providers (e.g., nursing facilities) over the past two years. In the report, we discuss some of the effects of the pandemic and pandemic-related policies on beneficiaries and providers. However, our statutory charge is to evaluate available data to assess whether Medicare payments, in aggregate, are sufficient to support the efficient delivery of care and ensure access to care for Medicare’s beneficiaries. Therefore, while we have considered the effects of the coronavirus pandemic on our payment adequacy indicators, we continue to make recommendations aimed at finding ways to provide high-quality care for Medicare beneficiaries while giving providers incentives to constrain their cost growth and thus help control program spending. To the extent that the effects of the pandemic are temporary or vary significantly across providers in a sector, they are best addressed through targeted temporary funding policies rather than permanent changes to payment rates in 2023 and beyond.

The entire News Release is found here.

The 22-page Executive Summary provides an excellent synopsis, including the Commission’s recommendations.

Depending on your community/agency/setting, you will want to review the recommendations that could potentially impact you going forward such as this one for SNF services:

Recommendation—Considering our payment adequacy indicators, the Commission recommends that, for fiscal year 2023, the Congress should reduce the 2022 Medicare base payment rates for skilled nursing facilities by 5 percent. While the effects of the pandemic on beneficiaries and nursing home staff have been devastating, the combination of federal policies and the implementation of the new case-mix system resulted in improved financial performance for SNFs under Medicare. The high level of Medicare’s payments indicates that a reduction to payments is needed to more closely align aggregate payments to aggregate costs.”

Also, these for Home Health Care services:

Recommendations—Medicare beneficiaries often prefer to receive care at home instead of in institutional settings, and home health care can be provided at lower costs than institutional care. However, Medicare’s payments for home health services are too high, and these excess payments diminish the service’s value as a substitute for more costly services. Based on these findings, for 2023 the Commission recommends reducing the 2022 home health PPS base payment rate by 5 percent.

The lack of detailed information on the use of telehealth in 2020 impairs our ability to assess the impact of the PDGM and the PHE. As the use of telehealth in home health care grows, the lack of information about telehealth visits could also compromise CMS’s ability to accurately set payments under the home health PPS. The Commission therefore recommends that the Secretary require HHAs to report the provision of telehealth during home health care on Medicare claims, like they already report for in-person visits and other home health care services.”

Please review the full report (604 pages) with your team and colleagues or at least the Chapters that are likely to impact you as a provider of those services.  

Here is the Table of Contents for this MedPAC report:

Chapter 1:  Context for Medicare payment policy
Chapter 2:  Assessing payment adequacy and updating payments in fee-for-service Medicare
Chapter 3:  Hospital inpatient and outpatient services
Chapter 4:  Physician and other health professional services
Chapter 5:  Ambulatory surgical center services
Chapter 6:  Outpatient dialysis services
Chapter 7:  Skilled nursing facility services
Chapter 8:  Home health care services
Chapter 9:  Inpatient rehabilitation facility services
Chapter 10:  Long-term care hospital services
Chapter 11:  Hospice services
Chapter 12:  The Medicare Advantage program: Status report and mandated report on dual-eligible special needs plans
Chapter 13:  The Medicare prescription drug program (Part D): Status report
Chapter 14:  Mandated report: Designing a value incentive program for post-acute care
Appendix A:  Commissioners’ voting on recommendations