Last Updated on:
05/02/08

Medicare Payment Advisory Commission's

Report to Congress: Medicare Payment Policy

March 1, 2006

Recommendations:

Hospital Inpatient and Outpatient Services

The Congress should increase payment rates for the acute inpatient and outpatient prospective payment systems in 2007 by the projected increase in the hospital market basket index less half of the Commission's expectation for productivity growth.

Physician Services

The Congress should update payments for physician services in 2007 by the projected change in input prices less the Commission's expectation for productivity growth.

Skilled Nursing Facility Services

The Congress should eliminate the update to payment rates for skilled nursing facility services for fiscal year 2007.

The Secretary should modify the PPS for skilled nursing facilities to more accurately capture the cost of providing care to different types of patients. This new system should:

• reflect clinically relevant categories of patients;

• more accurately distribute payments for nontherapy ancillary services;

• improve incentives to provide rehabilitation services based on the need for therapy; and

• be based on more contemporary, representative data than the current system based on time study data from 1990, 1995, and 1997.

To improve quality measurement, the Secretary should:

• collect information on activities of daily living at admission and at discharge;

• develop and use more quality indicators, including process measures, specific to short-stay patients in skilled nursing facilities; and

• put a high priority on developing appropriate quality measures for pay for performance.

Home Health Services

The Congress should eliminate the update to payment rates for home health care services for calendar year 2007.

Long-Term Care Hospital Services

The Congress should eliminate the update to payment rates for long-term care hospital services for 2007.

Inpatient Rehabilitation Facility Services

The Congress should eliminate the update to payment rates for inpatient rehabilitation facility services for fiscal year 2007.

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