The Medicare Payment Advisory Commission (MedPAC) held the second meeting of their new term on October 6, 2016 and October 7, 2016. The Commission covered a number of topics, but much attention was given Medicare Accountable Care Organizations, Medicare Part B drug payment policy, and biosimilars in Medicare Part D.
At the meeting, commissioners were given a status report by staff members that analyzed data related to ACO performance, particularly in the Shared Savings Program, the Pioneer Model, and the Next Generation Model. A significant amount of time during the first day of the meeting was devoted to discussing ACOs as commissioners noted the importance of ACOs and their continued presence in the health care landscape. The Commission generally expressed support for moving towards two-sided risk models in ACOs, believing that this type of structure would be the most financially stable as opposed to a one-sided risk model that may lose money. The data presented to the Commissioners indicated that some ACOs are performing well while others are not. The information presented to the commissioners stated that ACOs with certain characteristics were more likely to exhibit savings: ACOS in the south over ACOs in the Midwest, West, and Northeast; physician-based ACOs over hospital-based ACOs; and small ACOs (defined as fewer than 10,000 beneficiaries) over large ACOs. From this, a number of commissioners discussed the need for more information in order to better understand what it is about these types of ACOs that allow them to perform better than others.
At the meeting, MedPAC began discussions about potential drug payment reforms for Part B. A significant portion of the discussion was devoted to an updated competitive acquisition program (CAP).
While the commissioners were generally supportive of this idea, opinions differed on whether to make it voluntary or at least partially mandatory. There was interest in whether the CAP could be used with other policy solutions. These other policy solutions that were discussed include the following:
- Consolidated billing codes
- ASP inflation limit
- Restructured drug acquisition program
- Modifying ASP add-on formula to 103.5% of ASP plus $5; lesser of 103.5% of ASP plus $5 or 150% of ASP; or reduce all payment to 105% of ASP
- Modifying the payment formula for new drugs: reduce payment methodology for new drugs from WAC+6% to WAC+4% (until ASP is reported)
- Strengthening manufacturer ASP reporting requirements
The Commissioners seemed generally supportive of these possible reforms with parts of the discussion focused specifically on consolidating billing codes and modifying the ASP add-on formula. The January 2017 meeting will include further discussion of Part B drug payment reforms.
The discussion about biosimilars in Medicare Part D covered multiple issues surrounding the introduction and subsequent use of biosimilars in the Medicare population. Much of the discussion revolved around how to treat biosimilars in the coverage gap (or “donut hole”). While currently biosimilar manufacturers do not have to pay manufacturer rebates during the coverage gap, the commissioners seemed to be in agreement that MedPAC should consider a recommendation to require biosimilar manufacturers to pay these rebates. Other areas related to biosimilars that the commission is likely to discuss further are formulary rules for biosimilars, current and future CMS guidelines, and possible implications for catastrophic coverage.
Other topics that were discussed include measures of hospital use for long-stay nursing facility residents; behavioral health care and the Medicare program; and reforming quality measurement and implications for premium support. While there was less discussion on the topic of measures for long-stay nursing facility residents, the Commissioners did agree that this was the correct direction for the Commission and that more time could be spent in this area.
Behavioral health was noted as an area not always discussed in conjunction with Medicare. The Commissioners stated in their comments that this was an important area where progress could be made to help beneficiaries. Multiple commissioners discussed learning about what is done in other areas like Medicare Advantage plans and Medicaid as a way to see what types of services are being utilized. There was a general consensus to focus on mental and behavioral health in the ambulatory setting as well as looking at possible ways that MedPAC could tackle a shortage of providers.
While discussing reforming quality measurement, multiple commissioners noted the distinction between process and outcome measures as well as their use in appropriate situations. Other commissioners were interested by the use of auto-enrollment or auto-assignment. The commission intends to further explore this subject with additional reports coming at future meetings.
The next public MedPAC meeting will be held from November 3-4, 2016.