MedPAC Proposes 2011 Medicare Provider Payment Updates

Two months ahead of schedule, the Medicare Payment Advisory Commission (MedPAC)—an independent congressional agency charged with advising Congress on a wide range of Medicare issues—voted Jan. 15 on recommendations for 2011 Medicare provider payment updates.

Here is a summary of MedPac’s recommendations to Congress:

Ambulatory Surgical Center CASCC

MedPAC advises Congress to update 2011 payments for physician services by 1.0 percent (down from the recommended 1.1 percent in 2010), without any contingencies.

Fairing nearly as well, MedPAC recommends Congress implement a 0.6 percent payment rate increase for ambulatory surgical centers (ASCs) in 2011, but also recommends Congress require cost and quality data submission—something ASCs have managed to avoid so far.

Likewise, for dialysis services, MedPAC advises Congress to update both the composite rate by the projected rate of increase in the End-Stage Renal Disease (ESRD) market basket index, and 2011 payment rates for hospice by the projected rate of increase in the hospital market basket index. This update, however, would be less the 2011 adjustment for productivity growth.

MedPAC further advises Congress to increase acute inpatient and outpatient prospective payment system (IPPS/OPPS) rates by the projected increase rate in the hospital market basket index (an estimated 2.5 percent), but to require the Health and Human Services (HHS) secretary (the secretary) to restore budget neutrality by reducing IPPS payment rates by the same percentage (not to exceed 2 percentage points) each year in 2011, 2012 and 2013. The lower rates should be retained, MedPAC advises, until overpayments (due to hospitals’ documentation and coding improvements) are fully recovered.

Other facility types do not fair nearly as well.

MedPAC advises Congress to eliminate the 2011 payment rates update for long term care hospitals, inpatient rehabilitation services, and skilled nursing facilities (SNFs), as well as eliminate the 2011 market basket update for home health services.

MedPAC also recommends Congress direct the secretary to rebase rates for home health care services to reflect the average cost of providing care; modify the home health payment system to “protect beneficiaries from stinting or lower quality care in response to rebasing” using risk corridors and blended payments that mix prospective payment with elements of cost-based reimbursement; identify categories of patients who are likely to receive the greatest clinical benefit from home health and develop outcomes measures; and review home health agencies that exhibit unusual patterns of claims for payment.

Congress also should give the secretary the authorization to implement safeguards, such as moratorium on new providers, preauthorization, or suspension of prompt payment requirements, in areas that appear to be high risk, advises MedPAC.

You can read the original MedPAC summary on the agency’s website.


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