The Medicare Payment Advisory Commission (MedPAC) is an independent Congressional agency established to advise the U.S. Congress on issues affecting the Medicare program. The Commission’s statutory mandate is quite broad: In addition to advising the Congress on payments to private health plans participating in Medicare and providers in Medicare’s traditional fee-for-service program, MedPAC is also tasked with analyzing access to care, quality of care, and other issues affecting Medicare. Congress should re-examine how Medicare pays for hospice, home health and nursing home stays, the panel that recommends reimbursement rates said Tuesday March 15, 2011.

The panel recommended that federal regulators tackle fraud in the home health industry while ensuring that patients’ admission and length of stay in hospice is based on their care needs and not financial incentives. It also suggested creating quality incentives for nursing homes — for example, by requiring the Department of Health and Human Services to publicly report risk-adjusted rates of potentially avoidable rehospitalizations and community discharge.

MedPAC comes up with its update recommendations by weighing beneficiary access to care, the quality of care, providers’ access to capital and provider costs and Medicare payments.

For 2012, MedPAC recommends a two-year rebasing of home health rates in 2013 and establish co-pays and medical reviews to fight fraud;

For Hospice, MedPAC recommends a 1 percent update accompanied by a change in the payment system, starting in 2013, towards “relatively higher payments per day at the beginning of the episode and relatively lower payments per day as the length of the episode increases.”

MedPAC also recommends that the Department of Health and Human Services (HHS) direct its Office of Inspector General to investigate financial relationships between home health agencies, hospices and long-term care facilities that may influence admissions; differences in patterns of nursing home referrals to home health and hospice and vice-versa; enrollment practices for hospices with unusual patterns, such as very long or very short stays; and hospice marketing materials and other admissions practices that could affect length of stay.

Ongoing Payment cutbacks, regulatory changes and the tough economic environment continue to present home health agencies nationwide with unique challenges. To succeed, agencies must devise innovative ways to do more with less. Agencies must invest in technology that will help them increase revenue, reduce costs, improve collaboration, improve compliance and efficiency.