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MedPAC considers site-neutral payment for acute, long-term care hospitals

April 5, 2013

The Medicare Payment Advisory Commission today discussed potential site-neutral payment approaches for patients who are chronically critically ill, defined by MedPAC as patients who spend at least eight days in an intensive care or critical care unit. Currently, Medicare pays acute-care hospitals and long-term care hospitals differently to care for these patients. According to MedPAC staff, this can create financial incentives to provide services in higher paid LTCH settings and encourage transitions between care settings that may be disruptive or harmful for patients. The commission discussed three potential site-neutral options: paying for CCI patients under the inpatient prospective payment system, no matter the site of care, but with an expanded outlier policy; paying for CCI patients under the inpatient PPS, but creating new CCI payment groups with a larger outlier pool; and bundling post-acute costs into new CCI payment groups in the inpatient PPS.  The commission expects to resume discussion on the issue this fall.