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Ways and Means Committee Hold Hearing on Medicare Post-Acute Care Payments & MedPAC Releases June 2013 Report

Posted on 6/14/2013 by NTOCC ®

Today, the House Ways and Means Subcommittee on Health held a hearing on the Medicare post-acute care payment system including payments relating to Home Health Agencies (HHA), Skilled Nursing Facilities (SNF), Inpatient Rehabilitation Facilities (IRF), and Long-Term Care Hospitals (LTCH). Jonathan Blum, Deputy Administrator and Director, Center of Medicare, Centers for Medicare and Medicaid Services (CMS), and Mark Miller, Executive Director, Medicare Payment Advisory Commission (MedPAC), were the subcommittee’s two witnesses.

Mr. Blum highlighted in his opening testimony the important work that CMS has been doing around developing new payment and delivery system models like Accountable Care Organizations and bundled payments, and went on to note that CMS is looking to promote models that better integrate post-acute care services with hospital and community services.  Mr. Miller highlighted that MedPAC has found that the varying rates CMS pays for similar services across siloed healthcare settings for comparable patients results in “incentives to move patients across payment systems involving unnecessary transitions and additional, avoidable costs.”

Also of note, Congressman Jim McDermott (D-WA) later brought up the three-day inpatient requirement to receive the SNF benefit, and noted that hospitals are increasingly classifying patients as “outpatients” receiving observation services instead of admitting them as “inpatients” despite the fact that these patients often stay the same length of time and receive similar services.  Mr. Blum replied that although the three-day minimum inpatient stay is written in statute, CMS would be interested in testing models that give greater flexibility to providers and patients in terms of qualifying for post-acute care benefits as long as there are accountability measures applied to avoid inappropriate overuse of the SNF benefit. As you know, this is an issue that NTOCC has been following, and we have recently drafted a letter in support of a bill by Congressman Joe Courtney (D-CT) titled the Improving Access to Medicare Coverage Act (H.R. 1179), which would ensure that time spent in an observation stay could be counted toward meeting the three-day prior inpatient stay requirement to qualify for Medicare SNF coverage.

In addition, today’s hearing coincides with MedPAC’s release of its June 2013 semi-annual report to Congress.  Of particular interest to NTOCC, MedPAC continues to recognize the importance of care transitions, particularly within their bundled payment models.


“Beneficiaries enrolled in Medicare fee-for-service (FFS) who require post-hospital care face a fragmented delivery system that does not facilitate smooth transitions between providers or encourage the appropriate use of services. FFS does not provide incentives for coordinated care, even though poorly executed transitions can put beneficiaries at risk for readmissions, which may represent poor-quality care and are costly to the program... [For] beneficiaries, payment bundles should result in fewer potentially avoidable hospital readmissions and improved transitions between settings. While preserving beneficiaries’ freedom of choice of providers, providers could be allowed to encourage beneficiaries to use recommended providers and settings—for example by offering services beneficiaries may not currently receive, such as transitional care.”

To view a recording of the hearing, please click here.

To view the MedPAC June 2013 report, please click here.