A federal court has told the U.S. Department of Health and Human Services that it will have to do more to justify a 0.2 percent cut in inpatient payment rates that is part of the controversial Medicare two-midnight rule.

The court decided that in addition to providing a better rationale for the pay cut, Medicare also will need to have a public comment period for that rationale.

Medicare had already delayed implementation of the two-midnight rule.

To learn more about this court decision, see this McKnight Long-Term Care News article.…

The Pennsylvania Department of Human Services (DHS) has issued a request for proposals (RFP) for organizations interested in serving the state’s Medicaid population through its HealthChoices Medicaid managed care program.

The HealthChoices program, introduced in 1997, currently serves nearly 2.5 million Pennsylvanians. Among them, 200,000 have enrolled in the program since the state’s Medicaid expansion began in January.

The new contracts will put a greater emphasis on value-based purchasing and will require participating insurers to provide at least 30 percent of their services in a value-based or outcomes-based manner within three years.   Among the tools managed care organizations are expected to employ to achieve this goal are accountable care organizations, bundled payments, and patient-centered homes.

With a projected value of about $17 billion, the RFP is expected to attract interest from national organizations that have not necessarily served Pennsylvania’s Medicaid population in the past.

To learn more about the state’s HealthChoices plans, see this news release from the Department of Human Services and this Philadelphia Inquirer article. Find the RFP itself here.…

Medicare’s readmissions reduction program penalizes hospitals based largely on the patients they serve rather than their performance serving them, a new study has concluded.

According to the report “Patient Characteristics and Differences in Hospital Readmission Rates,” published in the journal JAMA Internal Medicine,

Patient characteristics not included in Medicare’s current risk-adjustment methods explained much of the difference in readmission risk between patients admitted to hospitals with higher vs lower readmission rates. Hospitals with high readmission rates may be penalized to a large extent based on the patients they serve.

Among those two dozen socio-economic factors: patient income, education, and ability to bathe, dress, and feed themselves.

The study found, for example, that the worst-performing hospitals under Medicare’s hospital readmissions reduction program have 50 percent more patients with less than a high school education than the program’s best performers.

To learn more about the study, see this Washington Post story. To find the study itself, go here, to the web site of JAMA Internal Medicine.…

The Medicare Payment Advisory Commission (MedPAC) continues to work toward its June 2016 deadline for developing a model for a new, unified payment system for post-acute-care services for Medicare patients.

Operating under a mandate from the 2014 IMPACT Act, MedPAC is working to address variations in post-acute-care payments, misalignments between costs and payments, and payments based in part on where services are delivered rather than what services are delivered.

MedPAC members discussed the challenges they face and the directions they are looking for improvements at their monthly meeting last week in Washington, D.C. MedPAC’s staff delivered a presentation on the challenges and the work the agency has done so far; see that presentation here.…

The independent federal agency that advises Congress on Medicare payment issues held its monthly public meeting in Washington, D.C.

During the two days of meetings, the Medicare Payment Advisory Commission (MedPAC) discussed its work on six specific issues:

• developing a unified payment system for post-acute care
• a preliminary analysis of Medicare Advantage encounter data for Part B services
• factors affecting variation in Medicare Advantage plan star ratings
• Medicare drug spending
• emergency department services provided at stand-alone facilities
• payments from drug and device manufacturers to physicians and teaching hospitals

Each discussion was accompanied by an issue brief and a presentation; find those documents here.…