On December 7-8, 2017, the Medicare Payment Advisory Commission (MedPAC) held a public meeting that focused on payment adequacy in multiple health care. MedPAC annually looks at these payment adequacy issues and presents recommendations for each care setting. In addition, the meeting continued a prior discussion about developing an alternative to the Merit-based Incentive Payment System (MIPS) and included a status report on Medicare Advantage (MA).

The draft recommendations presented during this December meeting will be put to a vote at the next meeting, which will take place on January 11-12, 2018.

MedPAC Continues Towards Recommending an Alternative to MIPS

The first session at the meeting continued a topic discussed throughout this term: an alternative to the Merit-based Incentive Payment System (MIPS). Many commissioners have expressed concerns with MIPS and are in favor of developing an alternative. At this month’s meeting, commissioners were presented with a draft recommendation:

• The Congress should eliminate the current Merit-based Incentive Payment System; and
• Establish a new voluntary value program in fee-for-service Medicare in which:
  • Clinicians can elect to be measured as part of a voluntary group, and
  • Clinicians in voluntary groups can qualify for a value payment based on their group’s performance on a set of population-based measures.

A number of commissioners have expressed support for this draft recommendation and the voluntary value program (VVP) that it creates, but a few have expressed reservations. The goals of the VPP would be to maintain a value component in fee-for-service payment and encourage movement to Advanced Alternative Payment Models (A-APMs) while eliminating clinician measure reporting. Instead, the VVP would use a uniform, population-based claims-calculated, and patient-surveyed set of measures important to beneficiaries and the program. A vote is expected on this draft recommendation at an upcoming meeting.

MedPAC Takes Annual Look at Payment Adequacy, Presents Draft Recommendations

Almost all of the remaining sessions at the meeting covered payment adequacy and updating payments. Draft recommendations were multiple care settings and final recommendations will be presented and voted on at the next meeting.

First, commissioners heard about physician payments. In their presentation, MedPAC staff stated that the number of providers billing Medicare per beneficiary in 2016 was similar to that of 2015, but that 2016 saw a higher annual volume growth. Commissioners were presented the following draft recommendation:

The Congress should increase the calendar year 2019 Medicare payment rates for physician and other health professional services by the amount specified in current law. The Congress should increase the calendar year 2019 Medicare payment rates for physician and other health professional services by the amount specified in current law.

Staff noted that current law is 0.5 percent. During the discussion, commissioners expressed an interest in further understanding payment, including possible underpayment, for primary care services.

The next session focused on payment for hospital inpatient and outpatient services. Staff noted that Medicare fee-for-service hospital spending increased in 2016 while occupancy rates remain low. Commissioners were again presented a draft recommendation, which they were supportive of:

The Congress should increase the 2019 payment rates for acute care hospitals by 1.25 percent.

Commissioners Consider Two Draft Recommendations for Medicare Advantage

The second day also included a discussion of Medicare Advantage. The presentation given to commissioners included a status report on items such as enrollment and availability as well as an update on coding intensity. Two recommendations were presented:

• For Medicare Advantage contract consolidations involving different geographic areas, the Secretary should:
  • Require contracts to report pre-consolidation quality measures, and
  • Determine star ratings as though the consolidation had not occurred, until such time as quality is reported at the local geographic area level
• The Secretary should:
  • Establish geographic areas for Medicare Advantage quality reporting that are accurate reflections of health care market areas, and
  • Calculate star ratings for each contract at the geographic level

Like previous recommendations, commissioners were supportive. Additionally, the commissioners discussed spending more time on Medicare Advantage in the future. In particular, commissioners hoped to examine the star ratings system and explore ways to potentially modernize the system. Others discussed examining the use of encounter data and quartiles within the MA space.

Other sessions included draft recommendations for additional care settings including, ambulatory surgical centers, inpatient rehabilitation facility (IRF) services, skilled nursing facility (SNF) services, long-term care hospital (LTCH) services, home health (HH) care services. Again, commissioners were generally supportive of the recommendations. Votes will be conducted for all recommendations at the January meeting.