MedPAC Affirms Recommendation for New Payment System by 2021

After discussing whether to implement a new prospective payment system (PPS) for home health by 2021, the Medical Payment Advisory Commission (MedPAC) unanimously voted to recommend the date to Congress in its April meeting.

MedPAC members voted 15-0 to approve the timeline in its recommendation to Congress. The new PPS was originally likely to be scheduled to be implemented in 2023 or 2024.

The vote comes a month after the commission, which is tasked with recommending rate adjustments for Medicare’s fee-for-service payment system to Congress, submitted a rate cut of 5% to home health and inpatient rehabilitation services rate adjustments for 2018.


The new PPS, as mandated under The IMPACT Act, aims to combat payment issues embedded in the current system, including incentives to provide certain types of care for certain patients.

“By rebalancing the financial incentives, the PAC PPS will correct the current inequities in the SNF and home health PPS that favor some types of patients and providers over others,” Carol Carter, Ph.D, principal analyst at MedPAC, said during the meeting.

Over five years, spending is expected to be lowered by between $5 billion and $10 billion, according to MedPAC.


“For beneficiaries, providers will be more willing to treat all types of patients, and therefore, there should be less selection among different types of patients,” Carter said.

“For providers, the [post-acute care] PAC PPS will redistribute payments across providers,” Carter said. “The impacts will depend on provider responses and will vary wildly depending on each provider’s cost, their mix of patients and their current treatment practices.”

Throughout the year, MedPAC will turn its attention to regulatory alignments across PAC settings, according to Carter.

MedPAC recommendations are often not followed, and Congress is not obligated to implement them.

Written by Amy Baxter

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