Bipartisan, Bicameral Bill Strengthens Medicare’s Post-Acute Care

Washington, D.C. – Leaders from the Senate Finance Committee and House Ways and Means Committee today introduced bipartisan legislation to strengthen and improve post-acute care for Medicare beneficiaries.

Senate Finance Committee Chairman Ron Wyden, D-Ore., and Ranking Member Orrin Hatch, R-Utah, and House Ways and Means Chairman Dave Camp, R-Mich., and Ranking Member Sandy Levin, D-Mich., introduced the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act).

The IMPACT Act moves forward on the long-standing policy goal of collecting standardized data from Medicare post-acute care (PAC) providers. The bill takes crucial steps toward aligning Medicare PAC providers and toward a more accountable, quality-driven PAC benefit.

Specifically, the IMPACT Act requires data standardization to enable Medicare to:

1. Compare quality across different PAC settings;

2. Improve hospital and PAC discharge planning; and,

3. Use this information to reform PAC payments (via site neutral or bundled payments or some other reform) while ensuring continued beneficiary access to the most appropriate setting of care.

This information will allow future payment reforms to be driven by quality and efficiency while protecting beneficiary access to appropriate services.

The legislation follows the release of discussion draft in March that was largely based on input the lawmakers received from the post-acute care community. Last year, the lawmakers invited interested stakeholders to submit ideas on how to strengthen post-acute care, a variety of health care services that support a patient’s continued recovery from a serious illness. 

Post-acute care includes services in Long Term Care Hospitals (LTCHs), Inpatient Rehabilitation Facilities (IRFs), Skilled Nursing Facilities (SNFs), and Home Health Agencies (HHAs).  The IMPACT Act is based on the policy and legislative recommendations of more than 70 stakeholders in the health care community and will help lay the groundwork for the modernization of PAC services within Medicare to ensure the program works better for beneficiaries and taxpayers alike.

Without the comparable data required under the legislation, policymakers and providers cannot determine whether patients treated and the care provided in different settings is, in fact, the same or whether one PAC setting is more appropriate.  Absent this information, it is difficult to move forward with PAC payment reforms.

The lawmakers say the changes will help Medicare patients receive the right high-quality post-acute care in the right setting at the right time. 

A summary of the legislation draft can be found here, and a more detailed section-by-section can be found here.

Background:

Last year, the Chairmen and Ranking Members of the House Ways and Means and Senate Finance Committees set forth an invitation to stakeholders in the Medicare post-acute care community to provide input on ideas for reforming the system.  The resounding theme from the more than 70 letters received was the need for standardized post-acute assessment data across Medicare PAC provider settings.

The Medicare Payment Advisory Commission (MedPAC) first raised the need for a common PAC assessment tool in 2005.  In the Deficit Reduction Act of 2005, the Centers for Medicare and Medicaid Services was first directed to test the concept of a common standardized assessment tool in the form of the post-acute care reform demonstration. MedPAC also included a recommendation to move forward with a common assessment tool in its March 2014 report.

Multiple analyses spotlight the wide variation in utilization in all sectors of Medicare post-acute care, as well as vast differences in Medicare and all-payer margins among providers. The substantial variation in spending, quality, and margins within the post-acute sector provides strong motivation for PAC modernization. 

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