On March 1, 2010, the Medicare Payment Advisory Commission (MedPAC) issued its recommendations to Congress regarding Medicare provider payment updates for 2011. Among other things, MedPAC recommends:

  • Increasing acute inpatient and outpatient prospective payment system reimbursement in 2011 by the projected rate of increase in the hospital market basket index (MBI), coupled with implementation of a quality incentive payment program. MedPAC also proposes an offset of up to 2 percentage points in 2011 through 2013 to recover payments attributable to hospital documentation and coding changes.
  • Increasing payments for physician services in 2011 by 1.0%, and establishing a budget-neutral payment adjustment for primary care services billed under the physician fee schedule and furnished by primary-care-focused practitioners.
  • Increasing ambulatory surgical center (ASC) rates by 0.6% and requiring ASCs to submit cost and quality data.
  • Updating the end stage renal disease (ESRD) composite rate by the ESRD MBI increase minus a productivity growth adjustment (a net updated of approximately 0.7%).
  • Updating hospice rates by the projected MBI for 2011, minus an adjustment for productivity gains (a net update of approximately 1.1%). MedPAC also reiterated a series of hospice recommendation from March 2009 addressing broader payment and policy reforms.
  • Eliminating the 2011 payment update for skilled nursing facilities (SNFs) and adopting previous recommendations for reforms to SNF payments, including proposals to better account for nontherapy ancillary costs, update quality measures, and promote SNF reporting of more accurate diagnostic and service-use information.
  • Providing no inflation update for home health services in 2011, rebasing home health rates with provisions to protect quality of care, developing quality outcomes measures, and implementing certain program integrity safeguards.
  • Eliminating the payment update in 2011 for inpatient rehabilitation facilities and long-term care hospitals.

The MedPAC report also reviews the status of MA plans and Part D prescription drug plans, and it provides recommendations on comparing quality among MA plans and between MA and fee-for-service providers. Note that while MedPAC’s recommendations are not binding, policymakers often consider MedPAC’s assessments when updating Medicare payment policies.