Healthcare at Home: The Rowan Report

By Tim Rowan

According to a report by the Post-Acute Care Center for Research, the Medicare Payment Advisory Commission [MedPac] met on September 10 under its new chairman, Dr. Francis J. Crosson. Some of the reports submitted to kick off this year’s discussions will impact healthcare at home providers and their patients. [Categories singled out for discussion in this article are gleaned  from the report on MedPac members’ findings presented by the Post-Acute Care Center for Research. These categories include overviews of the Context for Medicare Payment Policy; Mandated Report: Developing a Unified Payment System for Post-Acute Care; Preliminary Analysis of Medicare Advantage Encounter Data –Part B Services; and Factors Affecting Variation in Medicare Advantage Plan Star Ratings.]

Context for Medicare Payment Policy, presented by Commission member Julie Somers
Overall health care spending, Medicare spending, and characteristics of future Medicare beneficiaries.
In 2014, it was reported that spending modestly increased as a result of the Patient Protection and Affordable Care Act (PPACA). Ms. Somers noted that Medicare expenditures are expected to increase—with the Congressional Budget Office and the Board of Trustees of the Medicare Trust Funds anticipating spending to reach one trillion dollars by the year 2024 or 2026. Ms. Somers also addressed the challenges the Medicare system experiences, one of which is a fragmented payment system.

Given the large number of baby boomers, the number of Medicare beneficiaries is projected to increase, while the number of workers is expected to decline. By 2030, we expect to have 80 million beneficiaries, up from the current 54 million beneficiaries. These beneficiaries are expected to live longer, have high rates of diabetes, obesity, and chronic conditions (yet they will be “better managed”).

Mandated Report: Developing a Unified Payment System for Post-Acute Care, presented by Commission members Carol Carter and Dana Kelley
Congress required MedPAC to report on the development of a unified post-acute care prospective payment system by June 30, 2016. This report is to include initial findings and implications of the payment system. The payment system is to reflect patient characteristics rather than payments based on site of care. The unified PAC PPS will: establish a common [base]rate and unit of service; develop a common case-mix adjustment method; use patient information for the sample’s stays to predict cost per stay; and the predicted cost would form [the] basis for [a] common payment. MedPAC staff provided the Commissioners with preliminary results on two different models for predicting cost—one for routine and therapy services, and a second for non-therapy ancillary services.

Preliminary Analysis of Medicare Advantage Encounter Data –Part B Services, presented by Commission member Julie Lee
Using 2012 Part B encounter data, Ms. Lee discussed the variation in utilization of medical services under MA versus fee-for-service (FFS), focusing on three domains: a broad category of services, selected services, and two markets—Portland and Miami. Generally, the use rate per capita was higher for FFS in all three domains, according to their analysis. For future analysis, MedPAC plans to examine other areas of the encounter data, and explore additional areas of interest by the Commission.

Factors Affecting Variation in Medicare Advantage Plan Star Ratings, presented by Commission member Carlos Zarabozo
Mr. Zarabozo provided the Commission with an overview of the MA star rating system, and discussed findings by both MedPAC and CMS. Mr. Zarabozo noted that plans that provide much of their medical services to beneficiaries of a low socio-economic status tend to associate their low performance to their patient population. On the other hand, there are plans with dually eligible populations that are able to attain a 4-star rating or higher. MedPAC discussed their findings in which they noted that Medicare Advantage plans with disabled beneficiaries below the age of 65, but who still qualify for Medicare, had lower star ratings. Previous work also found that plans who exclusively enrolled aged dually eligible beneficiaries typically had higher overall star ratings. The Commission recognized that two factors—disability and low-income status—can have an impact on the star ratings of a MA plan, and discussed how to address the issues at hand.

©2015 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Tim Rowan’s Home Care Technology Report, homecaretechreport.com, based on a press release from the Post-Acute Care Center for Research. Further reproduction of this public information is permitted.