On December 6-7, the Medicare Payment Advisory Commission (MedPAC) held a public meeting. This meeting began the annual process MedPAC conducts to review payment adequacy for physicians and the sites of care covered under the Medicare program. The meeting also included a discussion of redesigning hospital quality incentive programs and Medicare Advantage.

Draft recommendations were presented for commissioner consideration; formal votes on recommendations will be conducted at the next public meeting scheduled for January 17-18, 2019.

Commission Moving Towards Recommendation Revamping Hospital Quality Programs

MedPAC is continuing their work on developing an alternative option for hospital quality reporting programs, called the Hospital Value Incentive Program (HVIP). The commission first put this idea forward in a chapter in their June 2018 report and the program would merge existing hospital quality programs. At this meeting, the commissioners were presented with the following draft recommendation:

The Congress should replace Medicare’s current hospital quality programs with a new hospital value incentive program (HVIP) that:

• Includes a small set of population-based outcome, patient experience, and value measures;
• Scores hospitals based on absolute and prospectively set performance targets; and
• Accounts for differences in patient’s social risk factors by distributing payment adjustment through peer grouping.

Commission Chair Dr. Jay Crosson noted that this recommendation is different from those usually put forward in the December and January meetings since they usually focus strictly on payment adequacy and updates. Chair Crosson did note, however, that the commission feels strongly about this departure from usual procedure since the draft recommendation forwards a commission goal of rewarding hospitals that provide high quality care to beneficiaries and sends a signal that MedPAC is supportive of the hospital industry. The recommendation would take Congressional action to be implemented.

In discussion, commissioners were supportive of this recommendation, noting that this program is an effective way to bring together disparate programs such as the Hospital Readmissions Reduction Program and the Hospital Value-based Purchasing Program. Commissioners did express interest in continuing to discuss some of the finer details of the program as the recommendation develops.

Commissioners Consider Payment Adequacy Recommendations for Physicians, Multiple Sites of Care

The Commission began the meeting by discussing payment for physicians and other clinicians in the Medicare program. Commissioners were generally supportive of a draft recommendation that 2020 payment rates for physicians and other clinicians be the amount determined under current law. Commissioners, in discussing physician payment, noted that they hope the commission would continue to discuss physicians in the Medicare program in general, particularly in relation to workforce issues and payment across specialties.

The Commission also continued their discussion from October on Medicare payment for advanced practice registered nurses (APRNs) and physician assistants (PAs). Commissioner expressed support for the following two draft recommendations

• The Congress should require APRNs and PAs to bill the Medicare program directly, eliminating “incident to” billing for services they provide.
• The Secretary should refine Medicare’s specialty designations for APRNs and PAs.

A later session at the meeting focused on ambulatory surgical centers. Two draft recommendations were presented:

• The Congress should eliminate the calendar year 2020 update to the conversion factor for ambulatory surgical centers.
• The Secretary should require ambulatory surgical centers to report cost data.

Commissioners were supportive of both recommendations and were particularly interested in the second. Many commissioners noted that have cost data would be very valuable and provide insight into the utilization of this site of care and the implications to the Medicare program. Additionally, some commissioners expressed in interest in looking at quality measures for this space as an additional step paired with cost data that moves towards accountability.

Presentations and draft recommendations for the following sites of care were also given at the meeting: hospital inpatient and outpatient departments, inpatient rehabilitation facilities, skilled nursing facilities, long-term care hospitals, hospices, and home health agencies. These recommendations include the following:

• For 2020, the Congress should update the 2019 base payment rates for acute care hospitals by 2 percent. The difference between this update and the amount specified in current law should be used to increase payments in the hospital value incentive program.
• The Secretary should proceed to revise the skilled nursing facility prospective payment system in fiscal year 2020 and should annually recalibrate the relative weights of the case mix groups to maintain alignment of payments and costs.
• The Congress should eliminate the fiscal year 2020 update to the Medicare base payment rates for skilled nursing facilities.
• The Congress should reduce the fiscal year 2020 Medicare payment rate for inpatient rehabilitation facilities by 5 percent.
• The Secretary should eliminate the fiscal year 2020 Medicare payment update for long-term care hospitals.
• The Congress should reduce the base payment rates for hospice in 2020 by 2 percent.
• The Congress should reduce 2020 year Medicare base payment rates for home health agencies by 5 percent.