HCAF Attends MedPAC Meeting on Bundling Post-Acute Care

HCAF Deputy Director Monica Smith attended yesterday’s Medicare Payment Advisory Commission (MedPAC) meeting in Washington, D.C. regarding bundling post-acute care services for Medicare beneficiaries. MedPAC is addressing approaches to bundling post-acute care as a way to reduce Medicare spending.

Post-acute care use varies widely across the country in part because whether, how much and what services are needed is not standardized by provider type or patient condition. Furthermore MedPAC believes, fee-for-service payments encourage service use and there is no incentive for any provider to control the total costs to treat a beneficiary after a hospitalization. Well-constructed bundled payments can create incentives for providers to lower the costs of care across settings and to improve the quality of care beneficiaries receive. However, the bundles must be designed carefully to avoid increased volume, stinting, or patient selection.

MedPAC commissioners discussed options for designing the bundles. Based on discussions, it appears that MedPAC is a long-way off from making any recommendations to Congress or the Centers for Medicare & Medicaid Services as to how post-acute care (PAC) should be bundled in order to encourage care coordination, efficient use of resources and less variation in PAC spending. MedPAC staff have done a fair bit of number crunching in attempts to determine if they have valid risk adjusters and methodologies to use moving forward, but if they have drawn any conclusions yet, they did not share them at this point.

MedPAC staff were also seeking the Commission’s guidance as to what they might like to see included in their next phase of research and how they should analyze the data before making any recommendations. They had three basic areas they were looking for guidance:

  • Whether or not they should look at combined inpatient hospital-PAC bundles or PAC-only bundles. It seemed as if consensus was to focus on combined inpatient hospital-PAC bundles, but to also tackle PAC only bundles if they could handle it.  Two-thirds of home health services do not follow an inpatient hospital stay.
  • Whether or not they should seek to include or exclude hospital readmissions from the bundle. The discussion started with most in agreement that readmissions were an issue that needed focus/be included in the bundle, but then the discussion swayed in the opposite direction since hospitals are already being penalized for readmissions. However, it seemed to end with the opinion that they did want to include them since these bundles would help penalize/motivate the other providers too, not just the hospitals.
  • Whether the bundle should cover services for 30 (short-term) or 90 days (long-term) past hospital discharge. The group argued benefits to both of these strategies. There was no vote, but given each commissioner’s comments, there seemed to be more in favor of the shorter length time period.

The Commission also discussed the statistical accuracy they might be able to achieve in predicting rate variations and that home health is much more difficult to predict than institutional care. This later point affirms our industry’s position on the issue. Individual commissioners also brought up questions regarding rural adjustments, outliers for multiple co-morbidities, social adjustments, patient choice of providers and quality outcomes in addition to cost factors. There was some discussion about initially studying “low-hanging fruit” such as orthopedic procedures where the commission could hopefully identify services that providers are doing right, wrong, and lend themselves to being easier to bundle rather than less predictable conditions. On the other side of the argument, there were other commissioners who said everything should be tackled at once in what sounded like a managed care/HMO/ACO type of mentality.

Certainly the Commission is not prepared to offer any recommendations to Congress or CMS on the issue at this point, but they are gathering data and exploring various methodologies to designing potential post-acute care bundles. If you have suggestions for how they should be designed comments may be submitted to MedPAC for up to 1 week after the meeting. Click here for more information.

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