MedPAC Discusses Transition to Unified PAC PPS

Legislation | November 07, 2017 | by Aaron Tripp

The Medicare Payment Advisory Commission (MedPAC) continued their analyses and recommendations supporting the shift to a unified post-acute care prospective payment system (PAC PPS) during their November meeting. In light of their previous recommendations, which support the implementation of a unified PAC PPS in 2021, much quicker than the timeline for consideration in the IMPACT Act of 2014, MedPAC explored policy options that could become recommendations in advance of a new system.

The concept that was presented had two goals:

  1. Correct biases of current PPSs
  2. Redistribute and increase the equity of payments

A blended rate of a mix of the current setting-specific PPS rate and a proposed unified PAC PPS rate could serve as incremental steps towards implementation of MedPAC’s recommendations for a unified PAC PPS. The thinking is that this style of transition would accomplish several objectives:

  1. Correct known current biases,
  2. Increase the equity of payment across conditions,
  3. Give providers more time to adjust to changes needed to be successful under a PAC PPS, and
  4. Support recommendations that better align payments to the cost of care.

MedPAC’s recommendations remain just that, recommendations to Congress. On the IMPACT Act’s schedule of required reports, it is unlikely that a new payment system would be proposed before 2024 for implementation sometime later, despite MedPAC’s recommendation of 2021. The impact as described during the presentation is projected to be positive for not-for-profit providers due to their having a more complex case-mix of individuals being served. However, as observed with other recent proposals that have based payments more heavily on individual characteristics, the details matter and the impacts are more complex than presented. LeadingAge will continue to monitor the development of the topic and provide your feedback to both MedPAC and the Centers for Medicare and Medicaid Services (CMS).