MedPAC Releases Medicare Payment Policy Recommendations To Opposition By Industry Groups

The Medicare Payment Advisory Commission (MedPAC) released its March 2011 Report to the Congress: Medicare Payment Policy this week that report outlines the Commission’s recommendations for 2012 rate adjustments in fee-for-service (FFS) Medicare. The Commission recommends how much Medicare payment rates should change—for ten Medicare fee-for-service payment systems (e.g., the physician fee schedule or the inpatient hospital prospective payment system).  For 2012, the Commission recommends a 1 percent increase in payments for physician services to ensure beneficiaries have continued access to these services. In contrast, the Commission recommended no update to payments for home health care services, as the number of home health agencies has increased to an all-time high and Medicare’s payments have exceeded their costs by nearly 18 percent—the 10th consecutive year they have been in this range. 

Industry groups were quick to voice their concern over some of the recommendations, or lack thereof in the report.  The American Health Care Association (AHCA) and the Alliance for Quality Nursing Home Care said the Medicare Payment Advisory Commission’s (MedPAC’s) recommendation that Congress provide no FY 2012 cost-of-living adjustment for skilled nursing care will jeopardize caregivers’ ongoing ability to sustain progress when it comes to improving patient care quality.

“Stable Medicare funding is critical to extending this positive trend in improving quality, especially at a time when volatility in state Medicaid budgets has created a dramatic and worrisome squeeze on patient care, staffing and facilities themselves,” said Governor Mark Parkinson, President & CEO of AHCA, and Alan G. Rosenbloom, President of the Alliance for Quality Nursing Home Care. “With approximately 70 percent of facility costs related to labor, cutting the annual cost-of-living update has a direct, negative effect on patients, caregivers and overall facility operations.”


March 2011 Report to the Congress: Medicare Payment Policy Executive Summary