MedPAC Considers Recommendations For FY 2008

The Medicare Payment Advisory Commission is considering a set of recommendations to be included in its annual report to Congress in March, CQ HealthBeat reports. Summaries of recommendations appear below.

  • Doctors: MedPAC in its March report to Congress will “chart two alternative paths to fixing the flawed Medicare mechanism for paying doctors,” CQ HealthBeat reports. One of the paths would repeal the sustainable growth rate and involve “developing and adopting new approaches for improving the value” of Medicare spending. The other path would extend the SGR formula currently used to calculate doctor reimbursements to all health care providers. CQ HealthBeat reports that the commission “appears divided on whether the SGR should be repealed altogether” (Reichard [1], CQ HealthBeat, 1/9).
  • Home health agencies/skilled nursing facilities: MedPAC recommended that Congress not increase payments in fiscal year 2008 for home health agencies or skilled nursing facilities, in part because of “[h]ealthy profits” in both industries, CQ HealthBeat reports. The lack of a payment update for home health agencies in 2008 would reduce Medicare spending by between $250 million and $750 million next year and by between $1 billion and $5 billion over five years, according to MedPAC estimates. The lack of an update would have no impact on patient care through home health agencies, according to MedPAC (Carey, CQ HealthBeat, 1/9).
  • Hospitals: MedPAC voted unanimously to give hospitals a full “market basket” increase in FY 2008 payments for inpatient and outpatient care. The payment increase — currently projected at 3.1% — would be tied to the adoption of a “quality incentive payment program.” CQ HealthBeat reports that the “net effect” of the recommendation “would be that if Congress sets up a [payment program] paying up to 2% more, some facilities would receive an update in fiscal [year] 2008 higher than the market basket amount if they performed well on quality.” MedPAC member and former Congressional Budget Office Director Douglas Holtz-Eakin said that the incentive program “really has to be a central part of the message to Congress” (Reichard [2], CQ HealthBeat , 1/9).

“Reprinted with permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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