MedPAC wants pay boost for docs and hospitals

MedPAC wants Congress to increase hospitals and clinicians' 2o24 Medicare payment rates.

Why it matters: If Congress opts not to follow the recommendations, CMS has to make payment updates according to current law — setting up another year of providers running to lawmakers for relief from Medicare cuts after the fact.

• Commissioners hashed out draft payment recommendations for providers in a marathon two-day meeting last week.

Driving the news: The advisory agency looks poised to recommend that Congress increase Medicare payment to hospitals by 1% over what the law prescribes.

• Commissioners generally support asking Congress to give an extra increase to safety-net hospitals on top of that.
• MedPAC is also likely to recommend a pay boost for clinicians paid through the physician fee schedule and larger increases for providers caring for low-income traditional Medicare patients. (Current law offers no update to providers paid through the fee schedule.)

Between the lines: MedPAC doesn't often recommend pay increases for hospitals or clinicians. Rising costs factored into the 2024 draft recommendations, staff said during the meeting.

• But increasing Medicare payments requires new Medicare spending. That's a tough sell in Congress as the Medicare Part A trust fund approaches insolvency.

The other side: Skilled nursing facilities face a less rosy outlook. MedPAC's draft recommendation asks Congress to cut Medicare base payments for SNFs by 3% in 2024, relative to 2023 rates.

• Commissioners acknowledged that the nursing home industry has been through a tough couple of years. But they largely supported the recommendation, given MedPAC's mandate to examine access to care, quality of care, availability of capital and provider costs in the sector.
• "We are certainly not signaling that the sector is healthy long term," MedPAC chair Michael Chernew said during the meeting. "We are doing a much more prescribed exercise that we do across the board."

Details: MedPAC also discussed Medicare payment recommendations for other provider types at the meeting.

• Home health: Congress should decrease base pay by 7%.
• Inpatient rehabilitation facilities: Congress should decrease base pay by 3%.
• Outpatient dialysis centers: Congress should update base pay by current law, which amounts to a roughly 1.5% increase.
• Hospice: Congress should update base pay by current law, but also wage-adjust the aggregate cap each hospice provider can receive and reduce it by 20%.

What's next: MedPAC will vote on the recommendations in January after staff makes some changes based on commissioner feedback. MedPAC will then submit official recommendations to Congress in March.

• "We try and make the best recommendations we can," Chernew said during Thursday's MedPAC session. "Will [Congress] do it? There's a lot of issues that they face, and I'm not going to hesitate to speculate on how this would all play out."

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