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MedPAC considers 2014 payments for post-acute care

December 7, 2012

The Medicare Payment Advisory Commission yesterday and today considered draft recommendations for updating payments to post-acute care providers in 2014, which could change before the panel votes on them in January. The discussion included repeated commentary on the need for comprehensive reforms to ensure that each post-acute setting is treating a unique case mix, providing only medically necessary care, and bringing overall value to the Medicare program. Commissioners restated their support of prior MedPAC recommendations for home health and skilled nursing facility payments, and discussed preliminary recommendations for inpatient rehabilitation facility and long-term care hospital payments. They voiced support for a two-year rebasing process for the HH prospective payment system starting in 2013 and eliminating the 2014 HH marketbasket update, based in part on MedPAC's estimate that HH Medicare margins would average 11.8% in 2013. Commissioners also supported eliminating the 2014 marketbasket update for SNFs and rebasing the SNF PPS to better align payments with costs, which would result in an initial annual reduction in payments of 4% plus subsequent reductions. Draft recommendations for both LTCHs and IRFs call for a 0% marketbasket update in FY 2014. The commission projects 2013 Medicare margins will average 11%-14% for SNFs, 5.9% for LTCHs and 8.3% for IRFs.