fah hospital policy blog

Perspectives on health policy affecting America’s hospitals and the patients we serve.

FAH Urges MedPAC Not to Recommend Site-Neutral Payment Policies

December 18, 2014 | FAH Hospital Policy Blog Team

Category: Medicare, Rehabilitation Care

The Federation of American Hospitals submitted a letter to the Medicare Payment Advisory Commission (MedPAC) today, urging the group to stop considering site-neutral payment policy recommendations for inpatient rehabilitation facilities (IRFs) and skilled nursing facilities (SNFs).  The implementation of these policies on payment systems could ultimately lead to the opposite of the intended outcome: poorer patient care.

Several problems are associated with the potential payment policy recommendation, which the FAH letter outlines:

  • There is a lack of reliable clinical evidence and quality data. The Urban Institute study heavily relied upon by MedPAC has serious data flaws and limitations. A recent Dobson study comparing the effectiveness of IRF and SNF care has alternatively found better outcomes for patients in IRFs.
  • It is premature to implement site neutral payment policies until uniform assessment instruments, called for in the recently enacted Medicare Post-Acute Care Transformation (IMPACT) Act, are developed and ready to use.
  • Blunt site-neutral payment policies, without risk and case-mix adjustment as well as conforming regulatory change, risk placement of beneficiaries in clinically inappropriate settings.

The FAH shares MedPAC’s goals of making care more efficient and effective, with higher quality and better patient outcomes for Medicare beneficiaries, as well as a more patient-centered approach. However, site-neutral payment policies should be used very carefully and not in the absence of clear and reliable clinical data, which does not now exist.