CHA News

MedPAC Issues Draft Recommendations for 2021

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This week, the Medicare Payment Advisory Commission (MedPAC) issued its draft recommendations for each of the Medicare fee-for-service payment systems, as required by law. These recommendations, directed at Congress and the Department of Health and Human Services Secretary, are for calendar year (CY) and federal fiscal year (FFY) 2021. MedPAC will meet in January to vote on its recommendations.

MedPAC’s specific draft recommendations include:

  • Hospital inpatient and outpatient payments: For 2021, Congress should update the FFY 2021 Medicare base payment rates for acute care hospitals by 2%. The commission further recommends the establishment of a new Hospital Value Incentive Program (HVIP), which would replace the Readmissions Reduction Program, Hospital-Acquired Conditions Program, and the value-based purchasing programs. Under the new HVIP, the commission recommends that Congress further update the FFY 2021 Medicare base payment rates by an amount equal to 0.8% of the 2021 inpatient and outpatient payments to hospitals. The commission continues to discuss the appropriateness of an increase of 2.8% and whether the recommendation for the HVIP should be separate. The commission expressed concern that Congress would not act to create the new HVIP in time for FFY 2021.
  • Inpatient rehabilitation facilities: For 2021, MedPAC again recommends that Congress reduce fiscal year 2021 Medicare base payment rate for inpatient rehabilitation facilities (IRFs) by 5%. In addition, MedPAC restates its previous recommendation that directs the Secretary to conduct focused medical record reviews of IRFs that have unusual patterns of case-mix and coding and expand the outlier pool to redistribute payments more equitably across providers.
  • Skilled-nursing facilities: MedPAC recommends the elimination of the payment update for skilled-nursing facilities for federal fiscal year 2021.
  • Home health agencies: MedPAC recommends that Congress reduce payments to home health agencies by 7%.
  • Long-term acute care hospitals: MedPAC recommends that Congress increase payments to long-term acute care hospitals by 2% — 0.8 percentage points less than current law, which estimates the market basket at 2.8%.
  • Physician payments: For CY 2021, MedPAC recommends that Congress update the 2020 Medicare payment rates for physician and other health professional services by the amount determined under current law.

The slide presentations with the analysis of each payment system presented by MedPAC staff are available online; a transcript of the discussion will be available on the website within a few days. CHA will continue to monitor the process and will keep members informed through CHA News.