MedPAC Issues Draft Recommendations for 2021

The Medicare Payment Advisory Commission (MedPAC) issued its draft recommendations for each of the Medicare fee-for-service payment systems, as required by law. These recommendations, directed at Congress and the Department of Health and Human Services Secretary, are for calendar year (CY) and federal fiscal year (FFY) 2021. MedPAC will meet in January to vote on its recommendations.

MedPAC’s specific draft recommendations include:

  • Hospital inpatient and outpatient payments: For 2021, Congress should update the FFY 2021 Medicare base payment rates for acute care hospitals by 2%. The commission further recommends the establishment of a new Hospital Value Incentive Program (HVIP), which would replace the Readmissions Reduction Program, Hospital-Acquired Conditions Program, and the value-based purchasing programs. Under the new HVIP, the commission recommends that Congress further update the FFY 2021 Medicare base payment rates by an amount equal to 0.8% of the 2021 inpatient and outpatient payments to hospitals. The commission continues to discuss the appropriateness of an increase of 2.8% and whether the recommendation for the HVIP should be separate. The commission expressed concern that Congress would not act to create the new HVIP in time for FFY 2021.​

The slide presentations with the analysis of each payment system presented by MedPAC staff are available online; a transcript of the discussion will be available on the website within a few days.