The Medicare Payment Advisory Commission has recommended that Congress give hospitals a fiscal year 2011 payment update equal to the rate of change in the market basket index, currently projected at 2.4 percent, concurrent with implementation of a pay-for-performance program.
The commission made the recommendations at its January 2010 public meeting.
"MedPAC estimates that Medicare reimbursements are nearly 6 percent below cost, and a full market basket update is a minimum step required to ensure the continued patient access to non-profit hospitals," said Blair Childs, senior vice president of Public Affairs at Premier healthcare alliance. "Congress should consider these realities as it finalizes the historic healthcare reform legislation."
The commission also recommended that the Health and Human Services secretary reduce the inpatient update by up to 2 percent in 2011, 2012 and 2013 to reflect changes in documentation and coding, which would result in an inpatient update of just 0.4 percent in FY 2011.
"We're pleased that MedPAC recommended a full market basket update," said Don May, vice president of policy at the American Hospital Association. "However, we are disappointed with the commission's coding offset recommendation, since CMS already has authority to apply an offset and has suggested using a less aggressive transition in its 2010 rule."
Additionally, MedPAC recommended that Congress give physicians a 1 percent payment update in FY 2011, and repeated previous recommendations to increase fee-for-service payments for practitioners who focus on primary care.
MedPAC also wants Congress to provide no payment update in fiscal year 2011 for inpatient rehabilitation facilities, long-term care hospitals, skilled nursing facilities or home health providers.
For home health, the commission said Congress also should direct the Secretary of Health and Human Services to rebase rates to reflect the average cost of providing care; expeditiously modify the home health prospective payment system to protect beneficiaries from stinted or low-quality care; identify groups of beneficiaries most likely to benefit from home health and develop outcomes measures for quality of care; and review home health agencies with unusual patterns of claims and implement safeguards in areas that appear to be high risk.
For hospice providers, the commission recommended that Congress provide a 2011 payment update of market basket minus productivity.
The National Hospice and Palliative Care Organization took issue with the MedPAC recommendations, contending that they are based on overstated hospice margin projections.
"The discrepancy in the numbers is an indication of a change in the calculation methodology, by excluding the costs of delivering statutorily mandated services, rather than pointing to the fact that hospice margins are actually shrinking,” said Jonathan Keyserling, NHPCO’s vice president of public policy. “For MedPAC to recommend countering an erroneous growth in hospice margins by reducing the annual inflationary adjustment is absurd and potentially devastating to the hospice community.”