Siloed Payments for Post-Acute Care Create Disparities
Post-acute care (PAC) represents a critical component of the health care delivery system in the United States. Each of the four PAC settings - inpatient rehabilitation facilities (IRF), skilled nursing facilities (SNF), long-term care hospitals (LTCH), and home health agencies (HHA) - plays a distinct and important role in helping Medicare beneficiaries recover after an inpatient hospitalization. Some also care for patients who do not have a prior hospitalization. However, there is considerable variation in the types of patients these settings care for across the U.S., and siloed payment systems can result in Medicare paying very different amounts for otherwise-comparable patients simply because they sought care in different settings.
The Push for a Unified Post-Acute Care Payment System
Researchers at RTI International have been working with the U.S. Department of Health and Human Services Assistant Secretary for Planning and Evaluation (ASPE) and the Centers for Medicare & Medicaid Services (CMS) on activities related to post-acute care payment and quality measurement for over a decade. Most recently, we partnered with CMS and ASPE to develop the prototype for a Unified PAC Prospective Payment System (PPS) required by The IMPACT Act of 2014. The aim was to build a framework that could be used across PAC settings and that would set payment based on beneficiary clinical characteristics rather than type of provider. This work culminated in a Report to Congress published in July 2022.
A Unified Post-Acute Care PPS could help move the Medicare program toward a more equitable provision of PAC by better aligning payments and financial incentives with patient need. This could, in turn, lead to greater efficiency and a reduction in Medicare expenditures for PAC by streamlining payment policy for PAC and by basing payment on patient need regardless of setting.