MedPAC Discusses Inpatient Psychiatric Care, Acute Hospital Care at Home Program

April 1, 2024

At its March meeting, the Medicare Payment Advisory Commission (MedPAC) discussed Medicare inpatient psychiatric services, the Acute Hospital Care at Home (AHCaH) program, and Medicare Advantage (MA) topics, including an analysis of quality and data sources for measuring utilization. These issues will appear in MedPAC’s June 2024 Report to the Congress.

The Commission discussed two topics that expand on a Congressional request in its June 2023 report on behavioral health services in the Medicare program. MedPAC’s analysis found that nearly 50,000 beneficiaries were at or near the 190-day lifetime limit for inpatient psychiatric treatment in 2022 (some beneficiaries may have additional coverage through MA or Medicaid). Many commissioners called this 190-day limit outdated. While MedPAC is not currently making recommendations on this issue, President Joe Biden’s fiscal year 2025 budget proposes eliminating the lifetime limit for inpatient psychiatric facilities (IPFs).

MedPAC also discussed “scatter-bed stays,” or psychiatric stays in general acute care hospitals that are generally paid under the inpatient prospective payment system (IPPS) versus the IPF PPS. The number of scatter-bed stays are declining at a slower rate than IPF stays, MedPAC found. While IPF stays tended to be longer and had higher stay-level payments for psychosis stays than scatter-bed stays in 2022, the average per diem payment was higher for scatter-bed stays. MedPAC will expand on its work on Medicare behavioral health issues in future sessions.

The AHCaH program was established to address inpatient capacity during the COVID-19 public health emergency (PHE) and extended by Congress through 2024. MedPAC interviewed AHCaH hospitals and found that AHCaH volume has increased since the PHE and that these hospitals viewed the program positively. While MedPAC’s analysis of 2022 AHCaH Medicare discharges showed a longer length of stay than traditional hospital care and that patients received fewer lab and radiology services, they were unable to determine whether the total cost is lower than for in-hospital care. MedPAC noted limitations in evaluating AHCaH evidence, including small sample size, voluntary participation among hospitals, and non-randomized beneficiaries. Potential concerns about the program were highlighted, including flexibility for clinical judgment that could admit beneficiaries who are not appropriate candidates and clinical risks if AHCaH replaces other lower-cost services such as home health, hospice, nursing facilities, or home infusion. MedPAC will continue to consider refinements to the AHCaH model in case Congress extends it again.

Finally, the MedPAC discussed MA issues, including its 2019 recommendation to encourage more complete MA encounter data. MedPAC stated that complete encounter data are critical to the MA program and that current incentives are unlikely to yield complete data. MA quality issues were addressed using a preliminary analysis of a measure of ambulatory care-sensitive hospitalizations (i.e., hospitalizations that appropriate ambulatory care could have prevented) and a literature review comparing the quality of MA against fee-for-service Medicare, which yielded mixed results.