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  • MedPAC Makes Recommendations to Increase Efficiency of Medicare

    Yesterday, the Medicare Payment Advisory Commission (MedPAC) made several payment recommendations that could affect physical therapists in private practices and those working in skilled nursing facilities (SNF) and for home health agencies (HHA).   

    In its March report, MedPAC calls on Congress to repeal the sustainable growth rate and replace it with a 10-year path of statutory fee-schedule updates. This path comprises a freeze in current payment levels for primary care and, for all other services, annual payment reductions of 5.9% for 3 years, followed by a freeze. Under the 10-year update, the Department of Health and Human Services (HHS) should increase the shared savings opportunity for physicians and other providers who join or lead 2-sided-risk accountable care organizations.

    The commission also recommends that HHS regularly collect data—including service volume and work time—from a cohort of efficient practices to establish more accurate work and practice expense values. The initial round of data collection should be completed within 3 years.

    Additionally, the report addresses the need to identify overpriced fee-schedule services and reduce their relative value units accordingly.

    In the SNF setting, MedPAC suggests that Congress eliminate the market basket update for 2013 and revise the prospective payment system (PPS). Specifically, MedPAC calls for raising SNF Medicare Part A payments for medically complex care and lowering SNF Medicare Part A payments for high-intensity therapy, with the goal of making payments more equitable across facilities. Rebasing payments should begin in 2014, with an initial reduction of 4% and subsequent reductions over an appropriate transition until Medicare's payments are better aligned with providers' costs.

    In addition, the commission proposes reducing payments to SNFs with relatively high risk-adjusted rates of rehospitalization during Medicare-covered stays to counter the financial incentive that SNFs and hospitals have to rehospitalize beneficiaries.

    To help address fraud and abuse in home health care, MedPAC calls on HHS and the Office of the Inspector General to conduct medical review activities in counties that have aberrant home health utilization. Additionally, the report urges HHS to suspend payment and the enrollment of new providers if they indicate significant fraud.

    Recommendations for HHA payment include a 2-year rebasing of home health rates in 2013 and eliminating the market basket update for 2012. Additionally, the home health case-mix system should be revised to rely on patient characteristics to set payment for therapy and nontherapy services and should no longer use the number of therapy visits as a payment factor. MedPAC also suggests establishing a per episode copay for home health episodes that are not preceded by hospitalization or post-acute care use.

    These recommendations will be considered by Congress and the Centers for Medicare and Medicaid Services for implementation into current Medicare policies. APTA will continue to work with MedPAC and the federal government to ensure that implementation is conducted in a manner that ensures access to high-quality physical therapy services and avoids undue administrative burden on providers.


    • Of course, one of the most disturbing sections of this report is the desire to collect data "from a cohort of efficient practices to establish more accurate work and practice expense values." Translation: Select these data from practices with low utilization, and set this as the benchmark for all others. Call me a cynic, but I prefer the term realist. We will rue the day that we invited government into our examination rooms, and our wallets.

      Posted by Ken Mailly, PT, MPA on 3/16/2012 3:55 PM

    • I partially agree with Ken Mailly's comments. It is not just a government payer but the intrusion of insurers of all types into the management of healtcare for profit motives. While Medicare & Medicaid (and this can be extended to worker's comp payers) do not have a profit motive, they do have motives to reduce government spending exacerbated by the recent/current recessions. Again, the patient is the one who suffers.

      Posted by James K. Haberstro, PT on 3/16/2012 6:53 PM

    • Agree substantially with both prior comments, with the exception regarding "non-profit motives" of fed/state and nonprofit healthcare entities. "Not for profit" is perhaps the most misunderstoood, misused and nonexistant term developed by the anti-capitalists of all types. I've seen the self righteousness of those "I work for a non-profit" types who think they deliver free healthcare. The math behind non-profit demonstrates the "profit" is distribured BEFORE the bottom line, and that is the only difference. Fed/State and "Non-Profits" receive their profit in pension and insurance deposits that far outway private sector. They receive the large CE reimbursements and banking sick days to contribute to bloated retirement benefits. They receive profit in rules and regs promulgation that creates "process" for their job security. The pt suffers, everyone loses when we allow the english language to be co-opted and definitions to be maniputlated.

      Posted by Jane S PTA on 3/17/2012 11:48 AM

    • What is not included in this breakdown is the 22% decrease the outpatient sector has already suffered under previous cuts such as MPPR. Another 18% cut will devastate my practice and will put me out of business. Without stating the obvious, the patient suffers from fewer and fewer private practitioners; they will then be forced to go to hospital based outpatient physical therapy units and be part of an ACO…So much for autonomy of practice.

      Posted by Gregory Waite, PT, DPT on 3/19/2012 6:32 AM

    • Although I agree with much of what is said above, I most identify with Mr. Waite's comments. At this time, I am suffering greatly in a private practice becasue of the extremely low reimbursements when a clinic truly adheres to the Medicare guidelines for PT, PTA use. I am not happy to say that I must say goodbye to PT in the private sector and return to the mission field by 2014. I can no longer offer benefits and pay increases to my staff in such a way as the "Not for profit" hospitals do. In fact we struggle when Medicare fails to correctly program the 5010 changes and thus cannot pay us for our work for weeks on end. They they piecemeal what they do owe us more than 6 weeks after stopping payments. I can no longer endure this kind of ridiculous struggle in a mostly Medicare area. Dropping reimbursements is untenable!

      Posted by Sami Jo Magoffin, MPH, PT on 3/19/2012 5:03 PM

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