- The American Hospital Association (AHA) released a report last week arguing that the methods being used to develop a new post-acute care (PAC) payment system are flawed.
- The new report is an analysis of a study the Medicare Payment Advisory Commission (MedPAC) issued last June, which concluded a new, common payment system for PAC is “feasible and within reach” and laid out a model for creating it.
- In an accompanying letter to CMS Administrator Seema Verma, AHA President Tom Nickels said his organization is “concerned that the model contains fundamental problems that make it unworkable as a foundation” for developing the new payment system.
The CMS and provider groups are constantly discussing CMS payment models and potential changes. The proposed PAC reform joins site neutral payments and value-based care models as a top concern for hospitals and health systems.
The federal government and the healthcare industry have known since PAC payment reform was mandated in 2014 the process would take several years and much analysis. The requirement for an update came from the Improving Post-Acute Care Transformation (IMPACT) Act.
The new model must account for patients’ clinical characteristics, and not care settings. The PAC payment model affects four specific settings: longterm care hospitals, inpatient rehabilitation facilities, skilled nursing facilities and hospital-based home health agencies.
The first big step in its creation was the required MedPAC report, which was meant to recommend features for a new payment system and determine the impacts it might have. The report broadly concluded such a system is “feasible and within reach,” but noted it will eventually need to embrace episode-based payments to focus providers on patient outcomes, rather than services rendered.
Among other findings, MedPAC said both a short-stay outlier policy to prevent large overpayments and a high-cost outlier policy to prevent large losses by providers will be necessary components. It also found patient and stay characteristics can form the basis of risk adjustment.
The AHA report found the data MedPAC used in its assessment was outdated and not representative of the current field, and as such its conclusions should be questioned. It also said the system’s complex design could be unfeasible for providers to administer.