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Medicare Panel May Seek 2021 Doctor, Surgery Center Pay Freeze (1)

Dec. 5, 2019, 9:03 PMUpdated: Dec. 5, 2019, 10:17 PM

Doctors and ambulatory surgery centers would see no Medicare payment rate increases in 2021 under proposals advanced by an influential congressional advisory committee at a Dec. 5 meeting.

And the Medicare Payment Advisory Commission’s draft proposal for a smaller 2% payment hike for acute care hospitals in 2021 will face additional debate at the panel’s upcoming January meeting.

Each year, the commission makes recommendations to Congress about how to update payment rates for various groups of providers that treat Medicare beneficiaries. The commission will vote on the recommendations at its January meeting.

But if there is substantial agreement among commissioners with the payment recommendations made by MedPAC staff, the commission will move the proposals to an expedited January vote without lengthy discussion.

The preliminary recommendations for a flat physician payment update and the elimination of a 2.8% update for ambulatory surgical centers in 2021 did receive strong support from the commission and will proceed to an expedited vote in January. The commission also strongly supported and advanced a preliminary recommendation that ambulatory surgical centers provide the Centers for Medicare & Medicaid Services with annual cost reports.

The commission has called on the health and human services secretary to require the reports since 2009. Commission Chairman Francis Crosson said that without the reports documenting the centers’ revenue and profit margins, it’s “very difficult” to do anything other than a “no update” recommendation.

In 2018, traditional Medicare paid the surgical centers $4.9 billion for serving 3.5 million beneficiaries. Under current law, the centers are slated to receive a 2.6% payment hike in 2021.

Current law also calls for “no update” in payment rates for physicians in 2021, the commission reported. But MedPAC is recommending that doctors participating in an advanced alternative payment model, or APM, get a 5% incentive payment in 2021 for providing high-quality, cost-efficient care.

Over 90% of doctors participating in one such APM—the Merit-Based Incentive Payment System, or MIPS—have qualified for positive payment adjustments in the past, the commission said.

The proposed zero payment adjustment for physicians would result in no change in Medicare spending in 2021compared with current law. And it wouldn’t affect beneficiary access to care or provider willingness to provide care, said Ariel Winter, a MedPAC senior analyst.

In 2018, Medicare paid $70.5 billion to roughly 1 million physicians and other clinicians who cared for program beneficiaries.

The commission’s preliminary recommendation for a 2% hospital payment increase in 2021 also includes a bonus payment for hospitals that achieve high value and cost efficiency. The proposed bonus payment would increase hospital payment rates by 3.3% in 2021, the commission reported.

Commission member Warner Thomas called on the panel to recommend a payment update of 2.6% for hospitals in 2021, prompting the matter to be reviewed again in full before a vote on a recommendation is taken in January.

In other activity, the commission:

  • Advanced a preliminary recommendation that the HHS secretary increase the Medicare base payment rate for long-term care hospitals in 2021 by 2%. Doing so would reduce program spending relative to the expected regulatory update of 2.8%, the commission noted.
  • Moved to recommend no payment update for nursing homes in 2021. In 2018, Medicare spent $28.5 billion for nursing home care of 1.5 million beneficiaries.
  • Advanced a draft recommendation to reduce Medicare payments for home health care agencies by 7% in 2021. The commission has consistently called for payment reductions for home health agencies, saying the payments far outweigh the cost of care. Profit margins on Medicare patients at home health agencies have averaged 16.3% since 2001. In 2018, traditional Medicare spent nearly $18 billion on 6.3 million home care episodes for 3.4 million beneficiaries.

(Adds details on commission recommendations in final three paragraphs.)

To contact the reporter on this story: Tony Pugh in Washington at tpugh@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Randy Kubetin at rkubetin@bloomberglaw.com

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