AHCA responds to MedPAC Draft Recommendations
The Medicare Payment Advisory Commission (MedPAC) presented an updated draft recommendation to Congress at its December meeting. While the proposed recommendation language changed, the sentiment of their recommendation remained unchanged: they are asking to freeze future increases to Medicare payment rates for skilled nursing providers. We will vigorously oppose this recommendation in Congress, and we expect to win — just as we have won when MedPAC has made similar suggestions for the last many years.
MedPAC continues to focus almost exclusively on Medicare fee-for-service (FFS) margins. AHCA strongly disagrees with this approach.
Commission staff indicated that 2014 Medicare margins were 12.5% and that the 2014 Medicare margin marks the 15th year SNF Medicare margins have been above 10%. However, the Commission did acknowledge non-Medicare 2014 margins were approximately -1.4% and total (i.e. Medicare and Medicaid) margins were 1.9% over the same period.
The Commission staff further note that:
- Broad SNF prospective payment system (PPS) challenges remain
- PPS continues to favor therapy over medically complex care
- The level of Medicare’s payments remains too high
- Wide variation in margins reflects patient selection, service provision, and cost control
In terms of “broad SNF PPS challenges,” the Commission notes concern about therapy overpayments and that “payments for non-therapy ancillary (NTA) services are poorly targeted.” The Commission recommended revising PPS — first to address NTA and therapy challenges, then to rebase the “level of payments to help protect low-margin SNFs.”
AHCA is disappointed that MedPAC continues to focus almost exclusively on SNF Medicare FFS margins while merely acknowledging lower Medicare Advantage plan payment levels and negative Medicaid margins. They fall short of a more thorough discussion of the impact of total margins.
The Association will continue to convey to MedPAC the challenges the profession faces with total margins. We will also continue to emphasize the impact of Medicare alternative payment methods and demonstrations such as the Comprehensive Care Joint Replacement (CJR) demonstration, Accountable Care Organizations (ACOs), and growth in Medicare Advantage enrollment.