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MedPAC Discusses Payment Policy Context, Beneficiary Enrollment, Redesigning Hospital Quality Programs, and Other Topics

September 7, 2018

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PRESS CONTACTS
Andrew Amari, Hospital Policy and Regulatory Specialist
Phoebe Ramsey, Sr. Regulatory Analyst, Quality & Payment Policy

The Medicare Payment Advisory Commission (MedPAC) met Sept. 6-7 to discuss several Medicare payment issues, including the broader context of Medicare payment policy, understanding beneficiary enrollment, redesigning hospital quality measurement and incentives among other topics.

Context for Medicare Payment Policy

The meeting began with a discussion of Medicare in the context of the broader health care system, looking at MedPAC’s recommendations for Medicare payment policy within the current and projected budget and healthcare delivery landscape. Notably, the commission underscored projections of healthcare spending growth, emphasizing concerns about insolvency of the Medicare hospital insurance (HI) trust fund, which is projected to become insolvent in 2026. Additionally, the commission discussed other concerns, such as burdensome costs for beneficiaries. Cost-sharing for beneficiaries is projected to grow from 24% to 30% between now and 2035, and Medicare’s per capita cost growth has risen more than the growth in median household income.

Beneficiary Enrollment in Medicare

Commission staff presented the basics of beneficiary enrollment procedures for Medicare based upon growing concern of the link between Medicare enrollment and Social Security benefits. This is due to differences in eligibility ages between Medicare benefits (age 65) and full Social Security benefits (with Social Security already increased to age 66 and increasing to age 67 in the coming years), and the resulting information gap when the Social Security Administration (SSA) waits to provide notice to a senior until becoming eligible for Social Security benefits. The information gap becomes more problematic considering the late-enrollment penalties for delaying Medicare Part B enrollment without qualifying coverage during that delayed enrollment period.

Commissioners discussed the issues with SSA’s automatic enrollment process upon eligibility for Social Security benefits and whether the Centers for Medicare and Medicaid Services could work with SSA to improve notice to seniors about the differences in eligibility between the two programs. Staff analysis showed that the data is limited on the characteristics of the projected 1.5% of Medicare beneficiaries who paid a Part B late-enrollment penalty in 2016.

Commissioners discussed needing more information about the penalty-paying population to evaluate whether future modifications to the penalty structure should be considered due to the changes in Social Security eligibility policy.

Redesigning Medicare’s Hospital Quality and Value Programs: Next Steps

Following up on discussions held earlier this year [see Washington Highlights, April 13] and as a chapter in the June 2018 Report to Congress [see Washington Highlights, June 22], commissioners continued to discuss options for a proposed hospital value incentive program (HVIP) design that would consolidate hospital quality reporting programs into one value-based program.

Commission staff presented analysis on modifications to the original proposal presented in the spring, including:

  • Impacts of a greater withholding percentage (5% instead of the original 2%);
  • Greater weights to the clinical outcomes (hospital-wide readmissions and mortality) and lesser weights for patient experience and cost;
  • Creating a composite measure for patient experience (rather than the single Overall Patient Experience measure under the Hospital Consumer Assessment of Healthcare Providers and Systems); and
  • Additional support for the staff’s proposal to not include hospital-acquired condition (HAC) measures in the HVIP design.

On this last point, commission staff noted that analysis suggests that data on performance is not necessarily valid and is skewed by hospital behavior in response to financial incentives through current hospital quality performance programs.

Commissioners were in accord that a hospital reporting program 2.0 should retain HAC measures and that the higher 5% withhold (potentially phased in from 2%) were good modifications and that they would like to continue work on the concept towards a recommendation to Congress. Areas for further discussion include measure/domain weighting within the program and how best to measure patient experience. In regards to HAC measures, commissioners would like the opportunity to further explore and discuss measurement based upon a standard infection ratio in an effort to more appropriately measure hospital performance.

Other topics covered include additional discussion around aligning Medicare’s statutory and regulatory requirements under a unified payment system for post-acute care and mandated reports on long-term care hospitals and clinician payment.

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