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MedPAC Discusses Physician and Hospital Medicare Payment Adequacy

January 12, 2017

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Len Marquez, Senior Director, Government Relations

The Medicare Payment Advisory Commission (MedPAC) Jan. 12-13 held a meeting to discuss a range of Medicare issues, including payment adequacy of various payment systems, approaches to MACRA implementation, and Medicare Part B payment policy issues.

MedPAC revisited the payment adequacy for a range of payments systems that cover physician and other health professional services, inpatient and outpatient services, and outpatient dialysis services.

Commissioners voted unanimously in favor of the following draft recommendations:

  • Add a modifier on claims for all services provided at off-campus stand-alone emergency departments (EDs), which would allow CMS to monitor the growth of off-campus stand-alone EDs;

  • Update the inpatient and outpatient payments by the 1.85 percent specified in current law;

  • Increase payment rates for physician and other health professional services by the 0.5 percent specified in current law for 2018;

  • Eliminate the update to the payment rates for ambulatory surgical centers for 2018; and

  • Increase the outpatient dialysis base payment rate by the 1 percent update specified in current law for 2018.

MedPAC discussed various approaches to implementing MACRA, such as redesigning the Merit-based Incentive Payment System (MIPS) to eliminate or greatly reduce clinician-reported measures and focusing on clinicians with high rates of poor outcomes or extreme utilization.

Additionally, MedPAC staff discussed a package of potential reforms for Medicare Part B drug payment policy to address increases in Part B drug spending. For example, MedPAC staff proposed improving the current average sales price (ASP) system by requiring drug manufacturers to report ASP data for all Part B drugs. Commissioners will discuss reforms to Medicare Part B payment policies in the future.

MedPAC’s next meeting will be March 2-3, 2017.

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