MedPAC Issues Medicare Payment Policy Report to Congress

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On March 15, 2021, the Medicare Payment Advisory Commission (MedPAC) released its Medicare Payment Policy report to Congress updating payment recommendations for providers paid under Medicare’s traditional fee-for-service payment systems in nine sectors. MedPAC unanimously recommended a two-percent increase in the 2021 Medicare base payment rates for acute care hospitals and long-term hospitals and a five-percent decrease for inpatient rehabilitation facility services and home health care services. MedPAC recommended no change for physician services, ambulatory surgical center services, outpatient dialysis services, skilled nursing facility services, and hospice services.

MedPAC also recommended a policy option for expanded telehealth services after the COVID-19 public health emergency is over. Under the policy option, policymakers would temporarily continue some aspects of the expanded telehealth services for one to two years while gathering more evidence about the impact of telehealth on access, quality, and cost. During the temporary continuation period, Medicare would pay for specified telehealth services for all Medicare members regardless of location and, if there is a potential clinical benefit, Medicare would also pay for new services covered since the public health emergency began and audio-only services. The findings would then inform any permanent changes.

The report explains that in developing its recommendations, MedPAC first assessed the adequacy of Medicare payments for providers in 2021 by considering Medicare members’ access to care, the quality of care, providers’ access to capital, and how Medicare payments compare with providers’ costs. MedPAC next assessed how those providers’ costs are likely to change in 2022 and made a judgment about what, if any, update is needed. The report notes that many of the effects of the COVID-19 public health emergency were temporary and best addressed through targeted temporary-funding policies rather than a permanent change to payment rates.

This report fulfills MedPAC’s legislative mandate to evaluate Medicare payment issues and make recommendations to Congress in accordance with the Balanced Budget Act of 1997. The full report is available here.

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