MedPAC weighs bundled payments for post-acute care 

Home care nurse giving patient physical therapy
MedPAC discussed the merits of bundled payments for post-acute care at its monthly meeting on Friday. (Getty/Photodisc)

Post-acute care may not be the optimal space for bundled payments—at least not yet, Medicare Payment Advisory Commissioners (MedPAC) said Friday. 

MedPAC held the second day of its monthly meeting Friday morning, where the commissioners weighed new payment approaches in post-acute care, including episodic payments and a system built around types of stays.

Carol Carter, a principal policy analyst on MedPAC’s staff, presented both options to the commissioners and warned that there is a significant downside to each: A stay-based model would not change fee-for-service incentives, while a bundled payment approach could lead providers to stint care to maximize savings. 


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“A stay-based design is more like what we have,” Carter said. “There are fewer unknowns than going to an episode-based payment and going to a whole different amount of risk.” 

RELATED: Bundled payments drive hospitals to reduce referrals to SNFs, improve coordination 

Part of the concern, according to Carter’s report, is post-acute care is highly variable. One patient may need a long-term stay in a skilled nursing facility, another may need brief home healthcare and a third a combination of the two. 

Bundled payments may offer more accuracy and equity, as payment-to-cost ratios varied more widely for different conditions. However, it would also strongly financial a short stay over a long one, as providers would keep far more of the pot. In fact, long-term post-acute was likely to lead to a significant loss, MedPAC’s estimates showed. 

The commissioners did not take action Friday on either proposal, but they favored the stay-based approach because of those concerns. However, some noted that there’s room to build a value-based model on top of that approach, which could push providers to more high-quality referrals and improved discharge planning. 

“Episode-based makes a lot of sense, but in practice, it’s more complicated,” Commissioner David Grabowski, Ph.D., a health policy professor at Harvard Medical School, said. 

He said, though, that if in the future the commission wishes to recommend the stay-based model, quality measures and greater accountability would need to be included. 

RELATED: Considering becoming an ACO? These are the common traits of those most likely to succeed 

The commissioners also noted that the discussion was inadvertently a starting point for a different initiative entirely: shoring up accountable care organizations (ACOs). 

As these groups take on significantly greater risk, they have the power to effectively manage post-care care costs and referrals to quality providers, Susan Thompson, R.N., senior vice president for integration and optimization at UnityPoint Health, said. 

“I just want to underscore the opportunity we have, uniquely, to be on what we’re learning in the ACOs,” Thompson said. 

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