MedPAC draft calls for 1% inpatient, outpatient update

In a series of draft recommendations for fiscal 2012, the Medicare Payment Advisory Commission is considering a 1% update for hospital inpatient services, a figure that amounts to a full marketbasket update of 2.6% minus a 1.6% adjustment for documentation and coding improvements. Similarly, the commission discussed a 1% update for hospital outpatient services.

For physician payments, MedPAC members also suggested a 1% update for 2012. Although commission members discussed fixing the sustainable growth rate formula, they did not make any recommendations on this issue. The commission relied on data gathered from a telephone survey of Medicare beneficiaries and privately insured patients to assess payment adequacy for doctors before making its draft recommendation.

Last year, MedPAC recommended a 0.6% update for ambulatory surgery centers as well as a recommendation that HHS collect cost and quality data for ASCs. Absent of new information in this area, the commission did not offer a draft recommendation for ASCs for 2012.

In the post-acute sector, the commission considered a 0% update for skilled-nursing facilities, a segment it said has had—and is projected to have—higher Medicare margins than hospitals. Hospice providers could see a 1.5% update in 2012, and the commission also discussed re-running earlier recommendations to reform hospice payments so there is an incentive to reduce long-stay patients. For the dialysis sector, MedPAC considered a 1.5% update for 2012.

The commission on Friday discussed a series of draft recommendations for home health, including a 0% update for this segment in 2012.

Commission members also suggested that HHS begin re-basing payment rates for home health agencies over two years beginning in 2012, two years earlier than what was outlined in the Patient Protection and Affordable Care Act. Similar to last year, MedPAC suggested that safeguards be put in place so that as the home health payment system is reconfigured, agencies do not provide less care that could compromise quality for patients. Another draft recommendation called for copayments for Medicare beneficiaries in home health to make beneficiaries more accountable. Finally, the commission recommended that the HHS secretary and inspector general conduct medical reviews of home health in 35 counties where home health use is particularly high compared with other regions.

Also on Friday, MedPAC suggested 0% marketbasket updates for both inpatient rehabilitation facilities and long-term care hospitals, citing healthy Medicare margins for both of those post-acute segments.

The commission will vote on these and other recommendations in mid-January before releasing its report to Congress on March 15.