The Medicare Payment Advisory Commission (MedPAC) held its first public meeting of the new session September 6-7 to discuss upcoming efforts to address various Medicare payment issues.

Hospital Value Incentive Program (HVIP)

MedPAC continued its discussion on designing the HVIP, which was the focus of GNYHA’s meeting with MedPAC last month. HVIP would merge the Hospital Readmissions Reduction and Hospital Value-Based Purchasing programs, and eliminate the Inpatient Quality Reporting and Hospital-Acquired Condition (HAC) Reduction programs. These changes would provide an opportunity to address many of GNYHA’s structural concerns about the existing Medicare quality programs.

MedPAC staff outlined an HVIP with four measures (readmissions, mortality, spending, and patient experience) adjusted for social risk factors through peer grouping. MedPAC also discussed the measure weights, the withhold amount, the potential inclusion of HACs, and whether to use an overall patient experience measure or a composite measure. Most commissioners agreed that HACs should be included and that an initial 2% withhold should be increased to 5% over time. MedPAC will continue discussing the design elements to eventually make a recommendation to Congress, and GNYHA will remain engaged in the discussion because the proposal would significantly impact our members.

Mandated Reports

The Medicare Access and CHIP Reauthorization Act of 2015 requires MedPAC to examine the effect of statutory updates on clinician payments from 2015–19 concerning efficiency and economy of care, supply, access, and quality. While clinician payment updates averaged only 0.2-0.5% per year during this time period, MedPAC found that the updates did not affect payment adequacy indicators. MedPAC must also recommend future updates to ensure beneficiary access to care. In the spring, MedPAC will present using updated data and finalize its analysis for its June 2019 report to Congress.

MedPAC also presented its plan to analyze long-term care hospital (LTCH) payment policy, as mandated by the Pathway for SGR Reform Act of 2013. MedPAC staff presented the plan to evaluate the effect of the LTCH prospective payment system “site-neutral” payment policy on quality, use of post-acute care, and growth in Medicare spending on LTCH services. The site-neutral payment policy pays a lower rate for cases that do not have an immediately preceding acute intensive care unit stay or that require prolonged mechanical ventilation in the LTCH.

MedPAC must also comment on the need to limit the share of cases that can be admitted to an LTCH from a single referring acute hospital (the previous 25% limit was eliminated in 2019 rulemaking). MedPAC believes removing the limit may lead to growth in the number of LTCHs.

MedPAC also expressed general concerns about LTCHs, including their geographic concentration in certain areas, the treatment of lower-acuity patients who could receive less-expensive care in other post-acute settings, the difficulty of identifying patients who are clinically appropriate for LTCH treatment, and the limited and mixed research on patient outcomes and spending. MedPAC will use claims and administrative data, interviews, and site visits for its analysis to fulfill the mandate by June 2019.