MedPAC Discusses Issues and
Workplans
October 17, 2003 - At its Oct. 9-10 meeting,
the Medicare Payment Advisory Commission (MedPAC) discussed
work plans and provided some preliminary information on a
variety of Medicare issues that the Commission will be considering
this winter and spring for purposes of possible inclusion
in MedPAC's 2004 March and June Reports.
MedPAC staff presented a preliminary work plan for a study
on bundling of physician payments that will be included in
the June 2004 report. MedPAC staff will be examining the possibility
of bundling payments two ways: (1) one illness over a longer
period of time as is currently done with surgery, treating
the pre-op and post-op visits as part of the surgical procedure;
and (2) related services during a single visit such as an
office visit that includes lab tests. MedPAC commissioners
discussed the overall concept of bundling of physician payments
in the context of efficiency and as a method to curtail increased
volume that occurred in 2002, which led in part to the proposed
4.2 percent reduction in the physician fee schedule. There
were also concerns about how a payment for multiple providers
could be broken down and whether Evaluation and Management
visits could be billed as bundled services.
Commissioners briefly discussed the role of margins in making
payment policy recommendations. MedPAC staff calculate three
types of margins: Medicare inpatient, overall Medicare (includes
outpatient, skilled nursing and several other services), and
hospital total margins (which reflect revenues and costs from
all payers, as well as non-patient services). MedPAC staff
noted that the inpatient and overall margins are used more
directly in helping to guide payment policy decisions, while
total margins do not play a direct role in these decisions,
but help to provide a context for the Medicare decisions.
The Commission also discussed the role of an outlier policy
under the Medicare outpatient prospective payment system (OPPS).
Outlier payments are made when the costs of a service are
disproportionately higher than the corresponding Medicare
payment. Because the outpatient PPS generally pays for individual
services (rather than an entire episode of care like the Medicare
inpatient PPS per case payments), there was some concern that
outlier payments were being made for discrete and inexpensive
services. Commissioners generally agreed that an outlier policy
was needed under the OPPS but suggested that it might be limited
to only higher cost services.
Other issues discussed at the meeting included:
- A panel discussion on disease management and coordinated
care;
- The Medicare+Choice program;
- Inpatient rehabilitation facilities; and
- Ambulatory surgical centers, skilled nursing facilities,
and home health agencies.
MedPAC will move into high gear at its December meeting when
Commissioners will focus their attention on specific issues
and areas that could be the subject of MedPAC recommendations
in their 2003 March Report. Official votes on recommendations
will occur at the January 2004 meeting.
Information:
Karen Fisher, Senior Associate Vice President
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
Denise Dodero, Associate Vice President
AAMC Health Care Affairs
ddodero@aamc.org
(202) 828-0493
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