MedPAC issues June report to Congress: 6 takeaways

The Medicare Payment Advisory Commission has released its June 2017 report on Medicare payment policy to Congress, which includes a recommendation to establish a new payment system for post-acute providers.

Here are six takeaways from MedPAC's June report.

1. MedPAC recommends moving to a unified post-acute care provider prospective payment system across the four main post-acute settings: skilled nursing facilities, home health agencies, inpatient rehabilitation facilities and long-term care hospitals. The commission recommends the payments under the new system be based on patient characteristics rather than site of service.

2. The commission made several recommendations for reforms to improve Medicare payment for Part B drugs. In the short term, MedPAC recommends improving drug manufacturers' reporting of average sales price data, modifying payment rates for drugs paid at 106 percent of wholesale acquisition cost, establishing an average sales price inflation rebate and using consolidated billing codes.

3. Over the longer term, MedPAC recommends developing a new program called the Part B Drug Value Program. This program would allow providers to use private vendors to negotiate drug prices with manufacturers. "The intent of the DVP would be to obtain lower prices for Part B drugs by permitting private vendors to use tools … to negotiate prices with manufacturers and by improving incentives for provider efficiency through shared savings opportunities," according to MedPAC.  

4. The commission made several recommendations to address the effects of provider consolidation on the Medicare program. To address vertical provider consolidation, MedPAC recommends imposing site-neutral pricing. "By creating true 'site-neutral' payments, the Medicare program could be further insulated from the cost of physician-hospital consolidation," according to MedPAC. "Integration that improves care and generates efficiencies would still occur, but consolidation that is driven primarily by capturing new facility fees would not."

5. MedPAC discussed multiple ways to redesign the Medicare Access and CHIP Reauthorization Act's Merit-based Incentive Payment System. "MIPS as presently designed is unlikely to help beneficiaries choose clinicians, help clinicians change practice patterns to improve value, or help the Medicare program reward clinicians based on value," according to MedPAC.

6. To improve MIPS, the commission recommends eliminating the current set of MIPS measures and replacing them with population-based outcome measures. MedPAC also recommends allowing clinicians to choose to join an Advanced Alternative Payment Model, be measured by a group of clinicians that they define, be measured in a group of clinicians that Medicare defines or choose to not be measured at all. Clinicians who choose to not be measured would lose a "quality withhold," a set percentage reduction for all services under the physician fee schedule.

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