MedPAC’s commissioners were especially interested in how to address payments to skilled nursing facilities moving forward. MedPAC
“Medicare’s payments (to skilled nursing facilities) are too high relative to the cost of care,” said Carol Carter, principal policy analyst for MedPAC.
Analysts expect skilled nursing facilities to have a 10% profit margin on Medicare payments in 2021.
“However, the effects of the coronavirus and the impacts of the new case-mix system are uncertain,” Carter said. “The commission will proceed cautiously in recommending reductions to payments.”
MedPAC Commissioner Marge Ginsburg noted that for-profit hospices are considerably more profitable than not-for-profit hospices, suggesting that it could make sense to reimburse them at different rates. Carter said, “there’s been about a 10-point spread” between not-for-profit and for-profit hospices during the past 10 years, mostly because not-for-profits have higher daily costs and cost growth and lower shares of the most profitable patients compared to for-profit hospices. MedPAC Chair Michael Chernew agreed that it would make sense to account for provider ownership when making payment recommendations but admitted the prospective payment system doesn’t allow for it.
“We’ve seen during the pandemic this real shift toward home healthcare. I wonder about the permanence of that going forward,” MedPAC Commissioner David Grabowski said.
The commission doesn’t expect any recommended payment changes to decrease Medicare beneficiaries’ access to care or lower quality. It also believes providers would have enough access to capital and remain financially viable under the recommended changes. But some home health agencies and inpatient rehabilitation facilities could face increased cost pressures.
The commission voted to recommend that ambulatory surgical centers report cost data to CMS. It’s made a similar recommendation each year for the past decade. But ambulatory surgical centers have successfully beaten back efforts to put it into practice. The policy could lead to cost savings down the line if policymakers can figure out ambulatory surgical centers’ profitability. The commission’s staff said it would cost ambulatory surgical centers some money to report the information.