In its June report to Congress, MedPAC made recommendations that would change the way post-acute care providers are reimbursed. Reviews from providers are mixed.
The commission recommended site-neutral payments for two conditions (major joint replacement and hip and femur procedures) treated at skilled nursing facilities and inpatient rehabilitation facilities. The position of the commission is that Medicare should not pay more for the same care provided in two different settings. Many providers, particularly SNFs, have long supported and argued for site-neutral payments.
James Michel, director of Medicare research and reimbursement for the American Healthcare Association, said the organization fully supports MedPAC's recommendations, and might support a wider site-neutral policy, but only after additional analysis is performed.
"I think the healthcare system overall is moving toward a site-neutral type of approach where if a provider is delivering the service and can get the same quality outcomes at a lower cost, it is worth exploring," he said.
Under the recommended changes, SNFs would be paid about the same for the procedures. Reimbursements to IRFs would decrease by about 17 percent for major joint replacements and increase by 8 percent for hip and femur procedures.
With potential reimbursement decreases on the table, some providers, particularly IRFs, aren't fired up by MedPAC's proposals.
"We think that exploring the idea of site-neutral payments for very selected conditions is worthwhile, but it is not an easy issue," said Joanna Hiatt Kim, vice president of payment policy at the American Hospital Association. Her organization has 1,200 IRF and 850 SNF members that are part of hospitals.
In order for site-neutral payments to become more palatable, AHA thinks MedPAC needs to consider two major contingencies. First is the issue of patients. In the MedPAC report, commissioners found a sizable patient population similar for both SNFs and IRFs and based its recommendations on that similarity. Hiatt Kim said it would take more work to determine if those similarities are truly there.
On paper, she said, IRF patients and SNF patients may look similar but a deeper look into the medical records of IRF patients may reveal more differences than similarities, such as IRF patients are actually sicker than they appear on the surface and so caring for these patients would merit no reduction in reimbursement.
MedPAC did acknowledge that there were limitations to the research. One of which was the availability of data, including that from patients. Post-acute care organizations are required to provide clinical assessments of patients. While they all do this, the information can only be looked at in a silo because the assessment tools are not uniform. This makes it difficult to compare similar patients in a solid way.
The second issue that needs addressing is the regulations the providers must abide by. For instance, regulations for IRFs, such as the requirements to have physician oversight of therapy and to provide intensive therapy, would have to be relaxed. In the MedPAC report, the commissioners addressed such concerns by suggesting that one solution would be to change the IRF requirements on a case-by-case basis.
Further information will be needed before moving to site-neutral payments, but the approach is being looked at in various areas of healthcare delivery. And this kind of reimbursement is in line with where healthcare is going – finding ways to reduce costs, bundle payments and make it easier to work with accountable care organizations and Medicare Advantage plans.