Insights

On March 11, 2025, the House Ways and Means Health Subcommittee held a hearing on Ensuring Access to Quality Post-Acute Care. Democratic members centered their questions on potential Medicaid and Medicare budget cuts, while Republicans concentrated on the nursing home staffing rule and home health services. Both parties addressed the need for telehealth services. Both parties agreed that there should be quality post-acute care.

OPENING STATEMENTS

• Chairman Vern Buchanan (R-FL)
• Ranking Member LLoyd Doggett (D-TX)

WITNESS TESTIMONY

• Dr. Dana Madison, DNP, MBA, BSN, RN, Compassion Home Health Care
• Paul Dongilli, Jr., PH.D. CEO, Madonna Rehabilitation Hospitals
• Jonathan Fleece, President and CEO, Empath Health
• Lisa Grabert, MPH, Visiting Research Professor, Marquette University
• Eric Carlson, Director of Long-Term Services and Supports Advocacy, Justice in Aging

MEMBER DISCUSSION

Medicaid and Medicare Budget Cuts

Democratic members focused their discussion on potential Medicaid and Medicare budget cuts. Rep. Judy Chu (D-CA) emphasized her view that Republicans are planning to cut $880 billion from Medicaid and that would negatively impact seniors’ ability to access long-term care. She pointed out that Medicaid already only covers a limited number of rehabilitation days and asked how cuts would affect seniors relying on both Medicaid and Medicare. Mr. Carlson responded by highlighting that Medicaid assists millions of Americans in covering Medicare premiums, with 10 million relying on it to manage significant health care expenses. He emphasized that long-term care costs are a major burden for individuals across various income levels and that Medicaid serves as a critical safety net. He warned that any cuts would be devastating.

Rep. Steven Horsford (D-NV) added that Medicaid is the primary payer for 60% of long-term care spending. He expressed his concerns that cuts would force providers to reduce hours, increasing the risk of inadequate care. He then asked what steps were being taken to protect nursing home workers from the impact of Medicaid cuts and what the consequences of cuts would be for the long-term care workforce. Mr. Carlson warned that if cuts of the magnitude described by Democratic representatives were implemented, providers would struggle to continue operating, with the consequences ultimately falling on the health care providers and workforce.

Rep. Don Beyer (D-VA) expressed his concerns about what he described as cuts to health care services in the continuing resolution (C.R.). He argued that the bill was not a clean proposal but rather one that would cut $280 million from Alzheimer’s, kidney, and heart disease research. He questioned whether patient care would be impacted by budget cuts of this size. Mr. Carlson’s response was straightforward: “The simple answer is no.” He emphasized that the research programs could not continue to provide the necessary support under such severe budget reductions.

Nursing Staffing Rule

Rep. Scott Fitzpatrick (R-PA) highlighted the staffing shortages in his home district, noting the increased pressure on health care providers. He asked how staffing has changed in recent years and what challenges these shortages pose in treating patients. Dr. Madison responded that the shortage of registered nurses (RNs) has been a persistent issue, with a deficit of about 1,000 RNs in the past. She emphasized that telehealth could help alleviate some of these challenges but noted that many nurses left the profession during the COVID-19 pandemic.

Ranking Member Lloyd Doggett (D-TX) referenced a 2023 Medicare Payment Advisory Commission (MedPAC) report that found skilled nursing facilities had funds exceeding 22% more than necessary, yet 20% of facilities relied on Medicaid to cover costs. He questioned whether there were enough workers to meet the required staffing standards. Mr. Carlson responded that regulations must be practical. He noted that while the staffing standard is not as high as some advocates had pushed for, 60% of facilities nationwide already meet it. He also argued that rural facilities have an extended phasing period until 2027 and 2029 to comply. Additionally, he also argued that if facilities demonstrate that labor shortages prevent them from meeting staffing requirements, they are exempt from penalties in that region.

Rep. David Kustoff (R-TN) then inquired about workforce shortages, asking whether many certified nursing assistants (CNAs) pursue higher levels of nursing education. Mr. Fleece acknowledged the challenges in recruiting and retaining workers, particularly given the pressures of runaway inflation. He stressed that hiring staff remains a significant challenge in the current health care landscape.

Home Health Services

Rep. Lloyd Smucker (R-PA) discussed the importance of occupational therapy (OT) as a service available to patients through Medicare Part A for home health and introduced a bill aimed at streamlining the process for accessing home health care. He asked how the bill would improve patient access to care and what the financial implications might be. Dr. Madison responded that the bill would allow payment for any episodes of care, and if OT services were to be provided independently, they would be able to deliver the necessary care. She explained that this approach could lead to cost savings for agencies by reducing the expenses they would otherwise need to spend on other services.

Rep. Kustoff inquired about how home health services are provided in rural areas and how rural-based services align with the national average. Dr. Madison explained that home health services currently offer patient monitoring, such as blood pressure management, but pointed out that these services are not reimbursed at all, which presents a significant challenge.

There was concern from Rep. Greg Steube (R-FL) about the drastic decline in the number of home health providers and he asked for insights into the widespread closure of home health agencies. Mr. Fleece responded by emphasizing that home-based care is a key solution to today’s health care challenges. He discussed various models within the home-based care environment, noting that larger, not-for-profit agencies play a significant role in providing care, especially in underserved areas.

Telehealth

Rep. Carol Miller (R-WV) discussed the challenges rural patients face due to a lack of critical support, noting that the absence of central care increases recovery time and raises the risk of complications. She suggested expanding telehealth usage in post-acute care settings, which would allow for face-to-face visits via telehealth, as a solution to address these gaps. She asked about the impact of limited access to care, and the difficulties families face when visiting their loved ones. Dr. Dongilli acknowledged that this is a real issue for families, highlighting the challenges they face in relocating and accessing the necessary resources to care for their loved ones. He emphasized the importance of making it easier and more helpful for families to receive payments and support, with the goal of improving care for both patients and families.

Rep. Fitzpatrick pointed out that his home district is facing staff shortages, which are compounded by increasing pressure. He asked how staffing has changed in recent years and how these challenges impact the ability to treat patients. Dr. Madison responded by noting that there used to be a shortage of around 1,000 registered nurses (RNs), and that telehealth could help alleviate some of the strain. She also noted that many nurses left the profession during the COVID-19 pandemic, further exacerbating the shortage.

Rep. Blake Moore (R-UT) added that in most cases, telehealth is the best option for ensuring access to care and asked how the quality of telehealth services could be improved. Mr. Fleece emphasized that his organization serves rural communities and noted that telehealth is the primary means of ensuring access to care, especially for individuals suffering from chronic or acute conditions. He stressed the importance of maintaining and expanding telehealth services to ensure these patients receive the care they need.

On March 7, 2025, the Medicare Payment Advisory Commission (MedPAC) held the second day of the March 2025 meeting. The first session focused on examining home health care use by Medicare Advantage (MA) enrollees. The second session discussed institutional special needs plans (I-SNPs). Findings from these sessions will be reported to Congress as part of MedPAC’s June 2025 report.

EXAMINING HOME HEALTH CARE ON MA ENROLLEES

MedPAC staff examined home health care use among MA enrollees, comparing it to Fee-for-Service (FFS) beneficiaries. A key focus was assessing data completeness and identifying patterns of home health care utilization. Researchers combined MA encounter data with the Outcome and Assessment Information Set (OASIS) records with the goal to obtain a more comprehensive picture of usage. MedPAC staff reported that they did get a more comprehensive picture of usage; however, reporting remains incomplete. The study found that 8.5% of MA enrollees used home health care in 2021, with higher utilization among older adults, low-income individuals, and those with prior hospital stays.

On average, MA enrollees who received home health care had 18.2 visits per user. The study also found that plan characteristics influenced usage patterns, with those in preferred provider organization (PPO) plans receiving more visits per user than those in health maintenance organization (HMO) plans, while provider-sponsored plans were associated with fewer visits. Additionally, cost-sharing played a role—MA plans requiring out-of-pocket payments for home health care saw lower utilization rates. When compared to FFS, MA enrollees were less likely to use home health care following hospitalization and, on average, received fewer visits. Even when controlling for provider differences, these trends remained unchanged. MedPAC staff acknowledged that the study had some limitations, including variations in data completeness across counties and the exclusion of in-home services provided outside the Medicare home health benefit. Moreover, they noted it was not possible to determine the appropriate level of home health use for beneficiaries. Moving forward, MedPAC staff noted these findings will provide insights into post-acute care trends within MA. MedPAC Commissioners raised several key points regarding the analysis of home health care use in MA. Commissioners highlighted the challenge of determining an optimal level of care, noting the common quality issues in home health. Others inquired about the availability of more recent data beyond 2021 and whether the study could explore reasons for home health use. Commissioner Lynn Barr questioned whether costs were being shifted to beneficiaries and whether rural and urban areas were analyzed separately, given the higher costs of care delivery in rural regions. MedPAC staff indicated some uncertainty about whether it was reflected in claims. However, rural and urban areas were examined separately. Others addressed concerns about data completeness, particularly regarding claims records and prior authorization requirements, asking if denials were documented.

Commissioners emphasized the importance of clearly distinguishing the differences between MA and FFS home health use. Commissioner Gina Upchurch built on this by seeking insights into the types of providers delivering home care and the perceived quality of care among MA beneficiaries. Others raised concerns regarding discrepancies in OASIS data and variations at the county level, while others highlighted the distinction between post-acute and home health services, questioning why some required OASIS submissions were missing.

Commissioner Kenny Kan suggested expanding research into long-term care and site neutrality, noting that encounter data remains the least complete. Commissioner Robert Cherry highlighted that MA patients had a 6% higher utilization rate, and findings suggested that those without prior hospital stays might experience greater equity in access to care. Commissioner Scott Sarran said he saw no evidence that MA plans were inappropriately reducing care but acknowledged the complexities of decision-making in the system. Finally, Commissioners expressed support for continuing this research, reinforcing its importance in understanding MA’s role in home health services.

INSTITUTIONAL SPECIAL NEEDS PLANS

The second presentation from MedPAC staff focused on I-SNPs, and how these specialized MA plans for beneficiaries requiring nursing home-level care compare and contrast with other plans. MedPAC Staff noted that Commissioners previously expressed interest in examining the experiences of long-stay nursing home residents and evaluating whether private health plans, like I-SNPs, could provide better care than traditional Medicare. I-SNPs serve a relatively small market, with about 125,000 enrollees in 2024, covering roughly 12% of long-stay nursing home residents.

The presentation highlighted that only 26% of nursing homes participated in an I-SNP in 2023, with participation more common among larger, for-profit, and urban facilities. Payment structures for these plans typically include capitated payments and performance-based incentives. Demographically, I-SNP enrollees tend to have longer stays and have lower mortality rates than residents who did not enroll. Additionally, I-SNP enrollees are more likely to be black, live in urban areas, and be Medicaid-eligible compared with other long-stay residents. MedPAC Staff noted that data on quality suggested that nursing homes with I-SNPs performed better in reducing acute discharges, readmissions, and emergency department visits. However, these findings were subject to limitations in risk adjustment and data exclusions.

MedPAC staff also noted that existing research on I-SNPs is limited but indicates that these plans can reduce inpatient hospital use by shifting care to nursing homes. Compared to other Medicare plan options, MedPAC staff found that I-SNPs have higher costs and bid amounts due to the high medical needs of enrollees, yet they receive lower rebates. The research also reviewed alternative models such as Dual-Eligible Special Needs Plans (D-SNPs), Medicare-Medicaid Plans (MMPs), and the Program of All-Inclusive Care for the Elderly (PACE), noting that each of these plans coordinates with Medicaid, unlike I-SNPs. Looking ahead, MedPAC plans to explore additional Medicare efforts to improve care for long-stay nursing home residents and will include an informational chapter in its June 2025 report to Congress.

MedPAC Commissioners discussed several key aspects of I-SNPs, including enrollment patterns, care quality, and potential improvements to the model. Commissioners raised questions about how patients enroll in I-SNPs compared to other plans. Others highlighted the advantage of having nurse practitioners provide care in nursing homes but expressed concerns about their employment structure and overall care quality.

There was also an emphasis from some Commissioners on the need to improve care for this vulnerable population. Commissioner Stacie Dusetzina requested additional information on the economics of nursing home care, including eligibility criteria and access. Commissioner R. Tamara Konetzka also questioned how to make the I-SNP model more widely adopted. There was common support for the concept of integrated care and exploring alternative models.

Commissioners emphasized the overlap between I-SNPs and skilled nursing facilities, highlighting the need to understand better the services provided. Commissioner Betty Rambur added that while I-SNPs help reduce hospitalizations and turnover, a major challenge lies in training future professionals, as many students do not view this field as a long-term career option. She praised the PACE model, which serves 300 nursing home-eligible individuals, stressing the importance of a team-based approach with pharmacists and nurses, as successfully implemented in Vermont and Minnesota. Commissioner Lynn Barr suggested a comparative analysis of I-SNPs, D-SNPs, and PACE to assess patient experiences and financial structures. Building on this discussion, Chairman Michael Chernew pointed to a broader challenge— determining when and how to separate these programs, given their shared focus on institutionalized beneficiaries.

On March 6, 2025, the Medicare Payment Advisory Commission (MedPAC) met to discuss work for their June 2025 report and beyond. The June report contains recommendations and research on the future of Medicare and is usually filled with new ideas and innovations.

PHYSICIAN PAYMENT FORMULA

The first session of the day focused on reforming updates to and ensuring accuracy of the Medicare physician fee schedule. Staff reviewed previous recommendations that the fee schedule should be updated by MEI minus 1% and discussed the limitations of this approach. They also outlined how the payment system updates are diverging between those physicians participating in quality payment models and those who are not. Notably, those in advanced alternative payment models (A-APMs) will recieve progressively higher update over time as compared to those not in A-APMs.

Commissioners then discussed a draft recommendation for creating a new physician update formula based on “portion” of MEI. However, while Commissioners liked the draft recommendation, they were very concerned that the recommendation did not include a minimum or maximum limit on the amount of the payment update.

They stated that MEI can be volatile, especially in the economy right now, and that they would want some boundaries on the update.

Commissioners then discussed improving the accuracy of physician payment rates. Physician relative value units (RVUs) are used as weights to determine overall Medicare payments for a physician service. Staff went through analysis showing how those codes have become misvalued over time. Staff also discussed that RVUs are calculated through work done by the American Medical Association’s RVS Update Committee (RUC), but that work could lead to some inaccuracies. Staff pointed out that MedPAC has twice recommended that CMS should have a panel to review recommendations from the RUC on physician RVUs.

Staff then presented three examples of potential areas of inaccuracy in RVUs, focusing on the outdated MEI used to update RVUs; the need to update global surgical codes to truly address care practices; and inaccuracy in practice expense (PE) RVUs. In the PE RVUs, staff showed that a significant number of physicians no longer have offices outside of the hospital so indirect PE payments might need to be suspended for these types of physicians.

The draft recommendation said that, “Congress should direct the HHS secretary to improve the accuracy of relative payment rates for clinician services by updated costs data regularly, and ensuring the methodology used to determine payment rates for different services reflects the settings in which clinicians practice medicine.” While Commissioners supported this recommendation, they were concerned that it was too vague and did not focus on specific problems with the global surgical bundle and indirect PE.

These recommendations will be reworked based on Commissioner feedback and brought back for a vote in the April meeting. This will be a chapter in MedPAC’s June Report to Congress.

REDUCING BENEFICIARY COST SHARING FOR OUTPATIENT SERVICES AT CRITICAL ACCESS HOSPITALS (CAHS)

In the second session, staff reviewed work from the September 2024 and January 2025 meetings on this subject, highlighting the disproportionate share of costs beneficiaries bear if they go to CAHs for outpatient services. Staff updated their analysis showing that over half of CAHs FFS Medicare total outpatient payments are from beneficiary copayments.

Staff proposed a final recommendation stating, “For Medicare HHS beneficiaries, the Congress should:

• Set coinsurance for outpatient services at critical access hospitals equal to 20 percent of the payment amount for services that require cost sharing; and
• Place a cap on critical access hospital outpatient coinsurance equal to the inpatient deductible.”

Discussion was minimal as this was the third time Commissioners had seen the data and had seen the draft recommendation in January 2025. The recommendation passed unanimously on a 17-0 vote.

MEDICARE INSURANCE AGENTS

In the third session of the day, Commissioners heard findings from preliminary work being done on insurance agents/brokers for Medicare Advantage and Medigap plans. Staff outlined their findings on how beneficiaries enroll in Medicare, how agents market to beneficiaries, how agents are compensated, and outlines from concerns regarding agent practices and staff data limitations in this area.

Staff also reviewed the methods for marketing to beneficiaries, from referrals to purchasing lead lists to contracting with marketing organizations to create lead generation. Staff also outlined that agents are not required to present all plan choices to beneficiaries and reviewed agent compensation based on beneficiary enrollment. While CMS has safeguards in place like ceilings like the fair market value and lower compensation levels set for reenrollment, it was still found that agents have a financial incentive to enroll beneficiaries in MAPD plans over stand-alone PDP plans, and higher-premium Medigap plans vs. lower premium.

Staff then outlined next steps on analytics for the future including focus groups, interviews with SHIP counselors, data analytics, and review of the Medicare Plan Finder website. Commissioner Brian Miller expressed frustration with the tone of the discussion, stating that beneficiaries are smart and do not need help enrolling in Medicare. Commissioner Gina Upchurch summarized most other Commissioner’s opinions well – saying that everyone created a Medicare system that was way too complex, so enrolling in Medicare is harder for beneficiaries than enrolling in any employer group health plan. Commissioners also stressed the need for more transparency in the plan data, broker compensation, and choices for beneficiaries. Commissioners all said they loved these initial findings and were excited to continue the work.

Staff said this is their first foray in this area, and that this work would continue into the 2025-2026 cycle next year.

PRELIMINARY WORK ON MEDIGAP

In the fourth session, staff reviewed initial work on Medigap plans. Medigap plans are supplemental insurance plans that wrap around traditional Medicare FFS and provide out-of-pocket protection for beneficiaries. Beneficiaries have many avenues of supplemental coverage from Medigap to Medicare Advantage or employer-sponsored insurance.

Staff then reviewed the characteristics of Medigap enrollees, their geography dispersion, plan types, enrollment, premiums, and consumer protection. They also presented a breakdown of Medigap premium variation across states. Staff then outlined future work on beneficiary focus groups, market trends and the role of state guaranteed-issue policies on the Medigap market.

Commissioners had a lot of questions about Medigap – asking why there are no enrollment files, why is there such variation in pricing, why do we have no consumer data, etc. Chairman Michael Chernew summarized everything by saying that the Commission needed to look further into benefit design, price variation, consumer choice, and MA competition.

PAYMENT FOR GROUND AMBULANCE SERVICES

In the last session of the day, staff reported out preliminary findings on a Congressionally mandated report on ground ambulances. The Congressional mandate requires that MedPAC look at:

• Ground Ambulance Data Collection System (GADCS) data
• Analyze the burden on ambulance organizations from this data collection
• Provider recommendations to determine whether ambulance organizations should continue to have to submit this data.

Staff provided background on the Medicare ambulance fee schedule (AFS), payment for mileage, payments for services, the GADCS. Staff also provided a preliminary read out of the data within the GADCS. Staff also broke out the cost per response based on ownership and service area location.

Staff then broke down their future workplan and asked for Commissioner input.

Commissioners discussed the cost difference between rural and urban, with Commissioner Lynn Barr saying she was struck by the cost difference, especially considering that rural response is so much more expensive but it is only paid about 1% more than urban. Commissioners asked for additional analysis based on ownership, what happens for those responses that do not require transport, and responder proportion between BLS (Basic life support), ALS (Advanced Life Support), and ACLS (Advanced Cardiac Life Support).

Staff will be digging into these and other questions in the 2025-2026 MedPAC work cycle.