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  • Washington Highlights

    MedPAC Discusses MACRA and Medicare Part B Payment Policy

    Len Marquez, Senior Director, Government Relations

    The Medicare Payment Advisory Commission (MedPAC) Mar. 2-3 met to discuss a range of Medicare issues, including Medicare Part B payment policy issues, approaches to MACRA implementation, and establishing a prospective payment system for post-acute care.

    MedPAC Chair Francis J. Crosson, MD, issued a series of draft recommendations to reform how Medicare reimburses drugs under Part B. The recommendations centered on improvements to the current average sales price (ASP) system, implementation of a Drug Value Program (DVP), and a reduction to ASP add-on payments to further encourage DVP enrollment. This was a continuation of MedPAC’s discussion on these topics from its January meeting [see Washington Highlights, January 19].

    The draft recommendations, if implemented, would make the following changes:

    • Require manufacturers to report ASP data for all Part B drugs;

    • Require manufacturers to pay Medicare a rebate when the ASP for their product exceeds an inflation benchmark;

    • Reduce the payment rate for wholesale acquisition cost (WAC) priced drugs by 3 percentage points;

    • Require a common billing code to pay for both a reference biologic and its biosimilars;

    • Implement a voluntary DVP; and

    • Reduce the ASP add-on to encourage enrollment in the DVP.

    Commission staff also discussed the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs), emphasizing the need to improve the MIPS program and support primary care. Specifically, they discussed a new potential path for the MIPS program, options for better supporting primary care, and modifying Advanced APM payment arrangements. The MedPAC staff stated that the burden of reporting some of the measures may outweigh their value to the Medicare program. The staff offered options for adjusting the MIPS program so that there is minimal reporting requirements and asked for advice from commissioners on how to design the MIPS program.

    Staff offered options for getting providers to participate in Advanced APMs. They also offered suggestions for how to better support primary care, such as encouraging clinicians to participate in two-sided accountable care organizations (ACOs) by making upfront payments for primary care physicians and paying a certain level of per beneficiary payments for all primary care physicians.

    Additionally, commissioners reviewed draft recommendations on the establishment of a prospective payment system for post-acute care.  The recommendations call for a prospective payment system (PPS) to be in place in 2021 with a three-year transition and concurrently begin to align setting specific regulatory requirements in support of the transition.

    Finally, MedPAC staff discussed standardization issues in premium support and the potential impact on beneficiaries and plan behavior.