Panel recommends new Medicare payments for hospice, home health

For 2012, MedPAC recommends the following updates:

• Hospital inpatient: 1 percent;

• Hospital outpatient: 1 percent;

• Physicians and other health professionals: 1 percent;

• Ambulatory surgical centers: 0.5 percent, "concurrent with requiring (them) to submit cost and quality data";

• Outpatient dialysis: 1 percent;

• Skilled nursing homes: Eliminate the update in 2012 while revising the payment system and establishing a quality incentive program;

• Home health: Begin a two-year rebasing of home health rates in 2013 and establish co-pays and medical reviews to fight fraud;

• Inpatient rehabilitation facilities: Eliminate the update in 2012;

• Long-term care hospitals: Eliminate the update in 2012;

• Hospice: 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 HHS direct its Office of Inspector General to investigate financial relationships between hospices and long-term care facilities that may influence admissions; differences in patterns of nursing home referrals to hospice; 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.