Medicare rates would rise for some providers and fall for others based on recommendations made to Congress last week by the Medicare Payment Advisory Commission, the independent congressional agency that advises Congress on Medicare reimbursement matters.

MedPAC’s rate recommendations to Congress and the administration, which it approved at its January 2023 meeting, are:

• Outpatient and inpatient prospective payment systems – under current law, the estimated increase would be about 2.9 percent; MedPAC proposes 2.9 percent plus one percent.
• Physician services – increase fees 50 percent of the projected increase in the medical economic index (MEI).
• Skilled nursing facilities – reduce the current base rate three percent.
• Home health services – reduce the current base rate seven percent.
• Hospice services – a complex proposal to increase some payments 2.9 percent but to reduce payments “for providers with very long lengths of stay and lost costs relative to payments.”
• Outpatient dialysis – MedPAC endorses the current law’s call for a 1.8 percent increase.

Breaking with recent years, MedPAC has discontinued its practice of offering rate recommendations for long-term-care hospitals (LTCHs) and ambulatory surgical centers, citing inadequate data on which to base recommendations.

In addition, MedPAC offers recommendations for redistributing current Medicare disproportionate …

Fifteen years ago, a federal court ruled that the Centers for Medicare & Medicaid Services was calculating Medicare disproportionate share payments (Medicare DSH) incorrectly and ordered the agency to fix the problem and reimburse eligible hospitals for the underpayments they had experienced.

Now, after 15 years of waiting, 40 of those hospitals are suing for their money.

In a suit filed in federal court, the hospitals outline the actions CMS has and has not taken to correct the problem and write that

The agency’s contractors have not performed the revised determinations required under the ruling and the rule and have not paid the plaintiff hospitals any of the additional amounts due them for the periods at issue.

In seeking back payment and damages, the plaintiffs also write that

The agency’s unreasonable delay has cost the plaintiff hospitals tens of millions of dollars in funds that should have been paid to them many years ago for the higher costs that they incurred to treat low-income patients more than a decade ago. 

The purpose of Medicare DSH payments is to help hospitals that care for unusually large numbers of low-income and uninsured patients with the cost of caring for those patients.

Learn …

The following is the latest health policy news from the federal government for March 13-16.  Some of the language used below is taken directly from government documents.

Medicare Payment Advisory Commission (MedPAC)

MedPAC has published its “March 2023 Report to the Congress:  Medicare Payment Policy.”  In this year’s report MedPAC considers the context of the Medicare program, including the near-term consequences of COVID-19 and the longer-term effects of program spending on the federal budget and the program’s financial sustainability.  It evaluates payment adequacy and make recommendations concerning Medicare payment policy in 2024 for selected fee-for-service payment systems but explains that it has discontinued its practice of offering rate recommendations for long-term-care hospitals (LTCHs) and ambulatory surgical centers, citing inadequate data on which to base recommendations.  It offers recommendations to redistribute current Medicare disproportionate share hospital (Medicare DSH) and uncompensated care payments and to provide additional resources to Medicare safety-net hospitals and clinicians who furnish care to Medicare beneficiaries with low incomes.  Finally, MedPAC reviews the current state of the Medicare Advantage program (Part C) and its prescription drug program (Part D).

MedPAC’s rate recommendations to Congress and the administration, which it approved at its January 2023 meeting and which are …

The Centers for Medicare & Medicaid Services has proposed altering its regulations governing the calculation of eligible hospitals’ Medicare disproportionate share payments (Medicare DSH).

According to CMS,

This proposed rule would revise our regulations on the counting of days associated with individuals eligible for certain benefits provided by section 1115 demonstrations in the Medicaid fraction of a hospital’s disproportionate patient percentage.

This is essentially the same change CMS included in its proposed FY 2022 and FY 2023 inpatient prospective payment system rules and then did not adopt in the final rule.  In proposing this change again CMS suggests that this has always been its policy and it therefore needs to update its regulations to reflect that since courts are finding that the existing regulations are contrary to this policy.

Learn more from CMS’s announcement of the proposed rule and from the formal Federal Register notice.  Stakeholder comments are due by May 1.

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The following is the latest health policy news from the federal government for January 6-12.  Some of the language used below is taken directly from government documents.

Renewal of COVID-19 Public Health Emergency Declaration

HHS Secretary Xavier Becerra has signed an order extending the previous declaration of a COVID-19 public health emergency.  This declaration extends the emergency to April 11.  The administration continues to assure stakeholders it will provide 60 days’ notice prior to the end of the public health emergency.

MedPAC Medicare Rate Recommendations

• Every year MedPAC recommends to Congress rate increases for the different kinds of health care providers for the coming year.  While MedPAC’s recommendations are not binding, they are highly respected and often find their way into future public policy.  MedPAC commissioners are holding public meetings today and tomorrow (January 12 and 13) and so far have offered the following recommendations:

• • Hospital payments – an increase of what current law calls for plus one percent, a transition to beginning to distribute Medicare DSH and uncompensated care payments through a new Medicare safety-net index (MSNI), and an increase of $2 billion in the MSNI pool.
  • Physician payments – an update of 50 percent of the projected