On January 11-12, 2018, the Medicare Payment Advisory Commission (MedPAC) held the next meeting of their current term and their first meeting of the new year. At the meeting, commissioners spent a significant portion of the meeting discussing Medicare Part D, Medicare Advantage, and the Merit-based Incentive Payment System (MIPS). Additionally, the commission conducted its annual voting on payment updates for the various sites of care covered by Medicare.

The commission began this meeting with a status report on the Medicare Advantage (MA) program. Staff presented information about the availability of MA plans and highlighted the frequent consolidation seen in MA plans. At previous meetings, commissioners expressed interested in this consolidation and its impact on the Star Ratings of plans. From that discussion, the following recommendations were presented to commissioners who voted unanimously in favor of it:

• Draft Recommendation #1: For Medicare Advantage contract consolidations involving different geographic areas, the Secretary should
  • For any consolidations effective on or after January 1, 2018, require companies to report quality measures using the geographic reporting units and definitions as they existed prior to consolidation, and
  • Determine star ratings as through the consolidations had not occurred, and maintain the pre-consolidation reporting units until new geographic reporting units are implemented per draft recommendation #2.
• Draft Recommendation #2: The Secretary should
  • Establish geographic areas for Medicare Advantage quality reporting that accurately reflect health care market areas,
  • Calculate star ratings for each contract at that geographic level for public reporting and for the determination of quality bonuses.

Next, the commission discussed Medicare Part D. While the presentation included a snapshot of the overall program, the majority of the Part D time was spent discussing the growth in drug prices and the impact for program spending. At past meetings and during this month’s meeting, commissioners expressed concern over rising drug costs and how this will impact Part D beneficiaries and the overall program. Some commissioners also highlighted possible improvement to the Plan Finder tool, the need for sound policy around the uptake of biosimilars, and expressed support for the commission continuing to explore this topic. The session concluded with a unanimous vote in favor of the following recommendation:

The Congress should change Part D’s coverage-gap discount program to:

• Require manufacturers of biosimilars products to pay the coverage-gap discount by including biosimilars in the definition of “applicable drugs,” and
• Exclude biosimilar manufacturers’ discount in the coverage gap from enrollees’ true out-of-pocket spending

As with the other meetings during this MedPAC term, the commission discussed the Merit-based Incentive Payment System (MIPS). Many of the commissioners have continually discussed their disappointment with the program and have voiced support for creating an alternative program that would replace MIPS. In response, the following recommendation was presented:

• 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 groups performance on a set of population-based measures.

While most commissioners were initially supportive, two commissioners, David Nerenz, Ph.D. and Alice Coombs, M.D., expressed reservations. These two commissioners expressed concern over the impact to physicians, particularly those in rural areas, who have begun the transition to MIPS only to have things change so suddenly. Others concerns included how voluntary groups would form, social and economic risk factors, and that no physician groups had expressed support for the recommendation. While unable to persuade the other commissioners, those who were supportive of the recommendation did note the VVP could offer a broad framework that if utilized, the commission could then dive into further, offering more specific recommendations to Congress and the Secretary of HHS. Topics specifically highlighted as areas for potential future exploration include the amount of a possible withhold in the VVP, ways to incorporate risk factors, and how to ensure rural participation. When a final vote was taken on the above recommendation, the vote passed although both Nerenz and Coombs voted against it.

Additionally, every January, the commission votes on recommendations that cover payment for the services covered under Medicare. These services include those carried out by physicians and those done in the following sites of care: hospital inpatient and outpatient departments, ambulatory surgical centers (ASC), dialysis facilities, hospices, skilled nursing facilities (SNF), home health agencies, inpatient rehabilitation facilities (IRF), and long-term care hospitals (LTCH).  The recommendations for each of these services and settings passed unanimously.

The next MedPAC meeting will be held March 1-2, 2018.