Medicare Compliance & Reimbursement

What MedPAC has to say about the future of provider reimbursement.

Hospitals will do well while home health agencies and nursing homes will get put out into the cold if Congress heeds the latest recommendations from the Medicare Payment Advisory Commission.
 
With hospitals' overall Medicare margin projected to fall to 1.8 percent in 2004, even with the payment increases in the new Medicare law, MedPAC voted Jan. 15 to recommend full market-basket updates for hospitals in 2005 under the inpatient and outpatient prospective payment systems. The commission's nonbinding recommendations will be included in its March report to Congress.
 
On Dec. 4, MedPAC issued draft recommendations calling for an inpatient update of market basket minus 0.4 percentage points, and an outpatient update of market basket minus 0.9 percentage points, but those recommendations were based on an erroneous projected 2004 Medicare margin of 2.8 percent for hospitals.
 
The Medicare law already gives hospitals full inpatient and outpatient market basket updates in 2005, although hospitals will lose 0.4 percentage points from their inpatient update if they do not participate in a Medicare quality-data reporting initiative.

No Updates For HHAs, SNFs
 
MedPAC Jan. 14 voted to offer no fiscal year 2005 payment updates to home health agencies or skilled nursing facilities.
 
The panel still wants the Department of Health and Human Services to develop a new system for classifying SNF payments. In the interim, add-on payments now directed to rehab resource utilization groups should be redirected to non-rehab RUGs. MedPAC also wants HHS to monitor patient access to home health services and require SNFs to report their nursing costs separately from other costs.