Keep long-term-care, hospice rates static: MedPAC

Medicare's primary advisory board urged Congress to keep pay rates unchanged for long-term-care hospital services and hospices in the next fiscal year, even if a scheduled 2% Medicare-wide provider cut goes into effect.

The Medicare Payment Advisory Commission's unanimous recommendations on Friday for unchanged rates for the two provider types were meant as cost-saving measures, since a legislative formula that sets the program's provider rates had called for each to receive relatively small increases at the start of the next fiscal year in October. Delaying those increases would save up to $500 million in the next fiscal year, according to MedPAC estimates.

But the recommendation for no rate change for the two categories of providers could become more significant if a cut for all Medicare providers goes into effect as scheduled on March 1. The provider cut, known as a sequester and which Congress delayed from the start of the year, was required by a 2011 deficit-reduction law.

“To the extent that the sequester reduces the rate below the level that prevails in fiscal year 2013, it would be inconsistent with the MedPAC recommendation,” said Glenn Hackbarth, chairman of MedPAC.

The panel similarly recommended unchanged pay rates—regardless of any cuts targeting debt reduction—on Thursday for inpatient rehabilitation facility services, home health services and outpatient dialysis services.