The Medicare Payment Advisory Commission (MedPAC) has released its June 2018 report to Congress, which details various issues affecting the Medicare program.

Mandated report: The effects of the Hospital Readmissions Reduction Program (HRRP)

MedPAC analyzed the impact of the HRRP on hospital 30-day readmissions and determined that between 2010 and 2016, unadjusted readmission rates fell for the three conditions included in the program during those years (acute myocardial infarction, heart failure, and pneumonia), as well as all other conditions. MedPAC also determined that the HRRP had no impact on mortality rates or on emergency department (ED) or observation services utilization.

Payment to ensure appropriate access to and use of hospital ED services

MedPAC made the following recommendations on payments to standalone EDs to address concerns about the growth in ED visit volume in urban areas and maintaining access to rural emergency care:

  1. Allow isolated, rural standalone EDs (more than 35 miles from another ED) to bill standard outpatient perspective payment system facility fees and provide them with annual payments to assist with fixed costs.
  2. Reduce ED payment rates by 30% for off-campus standalone EDs (OCEDs) within six miles of an on-campus hospital ED. While MedPAC claims that this would lead to more efficient delivery of emergency services, it also discussed potential exceptions from the policy, including when a hospital closes and an OCED opens in its place.

Hospital Value Incentive Program (HVIP)

MedPAC discussed the design of a potential new quality program, the HVIP, which consolidates the four current Medicare quality programs into one program. The HVIP would be limited to four measures (readmissions, mortality, spending, and patient experience) and would adjust payments for social risk factors. In the next year, MedPAC will continue to refine the HVIP’s design. MedPAC also reported on its analysis of two population-based quality measures—potentially preventable admissions and home and community days—for potential future use in Medicare payment policy.

The report also addressed:

  • ways for Medicare to help steer beneficiaries toward higher-quality post-acute care providers
  • financial incentives for hospitals to participate in Accountable Care Organizations
  • potential tools for reducing low-value care, which MedPAC found is prevalent across fee-for-service Medicare, Medicaid, and commercial insurance plans such as expanding prior authorization