Wednesday, March 16, 2011 MedPAC Recommends Payment Changes for 2012, Calls for a New Payment System In testimony yesterday before the House Ways and Means Subcommittee on Health, MedPAC Chairman Glen Hackbarth outlined the Commission's payment recommendations for 2012 and discussed the need for a new payment system. Specifically, MedPAC is proposing a revision to the home health case-mix system to rely on patient characteristics to set payment for therapy and nontherapy services, and thus would no longer use the number of therapy visits as a payment factor. Additionally, the Commission recommends a $150 per episode copay for home health episodes that are not preceded by hospitalization or post-acute care use. A 1% update for hospital inpatient and outpatient payment systems is included in the March MedPAC report, which also was released yesterday. No updates are recommended for skilled nursing facilities, inpatient rehabilitation facilities, and long-term care hospitals. Committee members voiced concerns about home health copays, questioned why there were no updates to certain settings, and asked whether Hackbarth believed that MedPAC's recommendations had been included in last year's health care reform legislation. Other questions touched on physician ownership, Medicare Advantage, and Medicare part D. On the issue of physician ownership, Hackbarth used imaging examples to illustrate the reasons behind -- and prevalence of -- overutilization. Overall, most committee members agreed that a new payment system to reduce costs was crucial and that small, incremental changes to the current system will not suffice.