The high margin for IRFs in 2014 indicates that, in aggregate, Medicare payments substantially exceed the costs of caring for beneficiaries. But margins differ considerably across IRFs. Since 2009, the aggregate margin for hospital-based IRFs—which account for 52 percent of IRF discharges—has been at or below 1 percent, while the aggregate margin for freestanding IRFs has been 20 percent or more. Further, since 2006, the disparity between hospital-based and freestanding IRFs’ margins has been widening. The growing disparity is likely due in part to differences in cost growth.
The Medicare hospice benefit is not included in the Medicare Advantage (MA) benefits package. MA enrollees who elect hospice remain in their MA plans, but fee-for-service (FFS) Medicare pays for their hospice services. This carve-out of hospice from MA fragments care accountability and financial responsibility for MA enrollees who elect hospice.
This year, in addition to its traditional margin calculation, the Commission is considering a new aspect of the relationship between Medicare payments and providers’ costs: Medicare payments relative to providers’ marginal costs, i.e. marginal profit.
Today the Commission released a contractor report that looked at the question: does the hospice benefit increase or reduce Medicare spending? Hospice proponents often argue that hospice is a valuable service not only because it provides coordinated, patient-centered end-of-life care, but also because it reduces Medicare spending for patients at the end of life. However, today’s report concludes that hospice does not appear to produce lower aggregate Medicare spending.
MedPAC’s March 2015 report continues the Commission’s focus on site-neutral payments with a recommendation to eliminate differences in payment rates between inpatient rehabilitation facilities (IRFs) and skilled nursing facilities (SNFs) for selected conditions.
The Commission released a report today finding that Medicare’s payments to skilled nursing facilities (SNFs) for therapy and nontherapy ancillary services are the least accurate they have been since 2006, despite Medicare’s numerous revisions to the payment system during this period.
Today, the Commission released a report to the Congress assessing the impact of Medicare’s home healthcare payment rebasing on beneficiary access and quality. The report was mandated by the Patient Protection and Affordable Care Act, which also created the rebasing policy. The report’s primary finding is that rebasing – in other words, reducing the base payment rate for home healthcare – will not threaten beneficiary access to home health services or compromise quality of care.
At our November meeting, we had a session on beneficiary access to hospital services, which was the first part of MedPAC’s yearly work on payment updates. Here’s an explainer on why we do this work and what it entails…