Medicare payment advisory commission releases report to Congress

March 21, 2018

The Medicare Payment Advisory Commission (MedPAC) released its March 2018 Report to the Congress: Medicare Payment Policy. The report includes MedPAC’s analyses of payment adequacy in fee-for-service (FFS) Medicare and reviews the status of Medicare Advantage (MA) and the prescription drug benefit, Part D. MedPAC also recommends changing the way Medicare pays for clinician services in FFS by moving beyond the Merit-based Incentive Payment System (MIPS), recommends changes to MA and Part D to improve the equity and efficiency of those programs, and responds to a Congressional mandate on telehealth in Medicare. In the Bipartisan Budget Act of 2018, Congress enacted several policies that are similar to recommendations contained in this report.

Moving beyond MIPS. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) established a new framework for how traditional FFS Medicare pays for clinician services. The Commission supports the elements of MACRA that repealed the SGR and encouraged comprehensive, patient-centered care delivery models such as advanced alternative payment models (A–APMs). MACRA also created MIPS, which measures individual clinicians in traditional Medicare on a set of measures that the clinicians choose. MedPAC shares the goal, expressed in MIPS, of having a value component for clinician services in traditional Medicare that promotes high-quality care.

However, the Commission believes that MIPS will not fulfill this goal and therefore should be eliminated. Clinicians have already incurred over $1.3 billion in reporting costs, and they should be relieved of future burdens.

Fee-for-service payment rate recommendations. The report presents MedPAC’s recommendations for how Congress should update payment rates in FFS Medicare for 2019. These “update” recommendations—which MedPAC is required by law to submit each year—are based on an assessment of payment adequacy that examines beneficiaries’ access to and use of care, the quality of the care they receive, supply of providers, and providers’ costs and Medicare’s payments.

Overall, these recommendations are expected to reduce spending in the Medicare program while preserving beneficiaries’ access to high-quality care. MedPAC recommends that payments be increased by the amount specified in current law for hospitals, dialysis facilities, and for physicians and other health professionals. MedPAC recommends no payment increase for 2019 for three FFS payment systems: Ambulatory surgical centers, long-term care hospitals, and hospice. MedPAC recommends no payment increase for both 2019 and 2020 for skilled nursing facilities.

For home health agencies and inpatient rehabilitation facilities, MedPAC recommends reducing payments by 5%. For skilled nursing facilities and home health agencies, MedPAC recommends reforming the prospective payment systems to more equitably distribute payments among providers and better maintain access for all beneficiaries.

Lastly, MedPAC recommends that the Congress direct the Secretary to begin to base Medicare payments to post-acute care (PAC) providers in fiscal year 2019 on a blend of each sector’s setting-specific relative weights and the relative weights that would be used under a unified PAC prospective payment system.

Mandated report: Telehealth. The 21st Century Cures Act of 2016 mandated that the Commission report to the Congress on information about (1) coverage of telehealth services under the Medicare FFS program, (2) coverage of telehealth services under commercial insurance plans, and (3) ways in which the coverage policies of commercial insurance plans might be incorporated into the Medicare FFS program.

The Commission fulfills this mandate in the March report. MedPAC finds that Medicare coverage of telehealth services is broad and flexible under payment systems in which providers or payers bear some degree of financial risk, but more limited under the physician fee schedule (PFS). The use of telehealth under the PFS has grown rapidly in recent years but remains low (0.3% of FFS beneficiaries).

MedPAC has the full release

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