MedPAC to freeze payments to ASCs, hospices, inpatient rehab hospitals beginning 2015

The Medicare Payment Advisory Commission on Friday adopted final payment recommendations that affect non-acute care providers in 2015 and beyond.

MedPAC agreed to freeze payments to ambulatory surgical centers, long-term care hospitals, inpatient rehab facilities, dialysis, home health and hospice providers in 2015, AHA News Now reported.

Margins for hospice care are healthy, averaging 8.7 percent, while average lengths of stay are significantly longer at for-profit versus non-profit facilities, according to data published by attorneys on Mondaq. MedPac also noted that the Medicare program has paid some $1 billion in unrelated expenses for hospice patients--about 6.5 percent of total spend on such care--suggesting such services be subject to closer cost controls. Health and Human Services' Office of the Inspector General has called for a closer look at hospice billing.

MedPAC also recommended that home health providers be subject to a financial penalty if patients receiving their services are readmitted to hospitals exceeded a specific risk-adjusted target, according to AHA News Now.

Like hospice, home healthcare is considered an especially profitable business, with margins as high as 15 percent. That's partly because they can control costs by operating such businesses out of one's home. The Centers for Medicare & Medicaid Services has tried to control costs in the past by seeking competitive bids for durable medical equipment contracts.

As for long-term care hospitals, MedPAC recommended that they be paid the same rate as hospitals for inpatients who are not classified as "chronically critically ill." MedPAC considers chronically critically ill patients as those who receive at least eight days of intensive care during their last acute care hospital stay or prolonged care that is involved with being on a ventilator. MedPAC estimates that such a change would cut long-term care hospital payments by 36 percent, according to AHA News Now. MedPAC would use the savings to create outlier payments to care for patients at prospective payment system hospitals.

To learn more:
- read the AHA News Now article
- here's the Mondaq article

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