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  • Washington Highlights

    MedPAC Holds First Meeting in 2015-2016 Season

    Ivy Baer, Senior Director and Regulatory Counsel

    The Medicare Payment Advisory Commission (MedPAC) Sept. 10-11 held its first meeting of the 2015-2016 session. MedPAC Chair Francis J. Crosson, M.D, opened the meeting by stressing the importance of beneficiary access to quality care and reiterated previous concerns regarding Medicare expenditures on graduate medical education (GME) and the lack of both accountability and a connection to workforce needs.

    A staff report on setting the context for the upcoming year examined projections on per beneficiary spending growth for inpatient and outpatient services generated a discussion about the challenges presented to the Medicare program.

    The meeting continued with a session on the development of a prototype for a post-acute care (PAC) prospective payment system, as required by the Improving Medicare Post-Acute Care Transformation Act (IMPACT Act, P.L. 113-185). As directed by Congress, the system is to focus on patient characteristics and medical complexity, rather than site of service, and is to align payment with care. Commission staff are looking at skilled nursing facilities (SNFs), long-term care facilities (LTCHs), inpatient rehabilitation facilities (IRFs), and home health agencies (HHAs). The commission’s report is due to Congress by June 2016.

    Commissioners discussed what features should be included in such a payment system and reiterated their desire not to create a system that replicates what is already in place. Much of the discussion focused on the fact that the only available data is from the Post-Acute Care Payment Reform Demonstration (PAC-PRD) project, which contains a very limited data set.

    Once the commission develops recommendations on the new payment system, the Centers for Medicare and Medicaid Services (CMS) must transition the prototype to an operational model and finally engage in rulemaking before the PAC PPS is finalized.

    The commissioners also discussed variation in Medicare Advantage (MA) plan star ratings. MA plans are evaluated on 44 quality measures, which are translated into a 5 star rating; plans with 4 stars or higher are eligible for a financial bonus. The commission delved into concerns that MA plans serving low socioeconomic status enrollees may be achieving lower quality performance due to the complexity of the care provided.

    To alleviate concerns, commission staff proposed two alternative scoring approaches: peer grouping based on socioeconomic composition of enrollees (similar to MedPAC’s previous work on the hospital readmissions reduction program) and star thresholds determined by population groups.

    Many commissioners stated their support for adjusting plans serving low income enrollees, while others raised concerns that adding socioeconomic status factors could over complicate such ratings.

    The commission additionally analyzed and discussed emergency department (ED) services at different settings, including hospital outpatient ED department, off-campus ED (OCED), and independent freestanding emergency centers. MedPAC's analysis shows that hospital ED visits have increased by 20 percent between 2008 and 2013, and most of the increase is attributable to increasing use of high-level ED visits (level 4 & 5).

    The commissioners discussed future analysis on the topic and potential policy directions. Commissioner Warner Thomas suggested MedPAC explore solutions in the context of continuity of care, such as policies to encourage use of telemedicine and urgent care centers as means to divert patients away from the emergency department. Chairman Crosson echoed similar sentiments and pointed out the challenges of making policy recommendations on individual issues that can serve the long term goal of integrated services.

    Commission staff presented 2014 data from the CMS Open Payments System on payments from drug and device manufacturers to physicians and teaching hospitals. The report suggests improvements to the Open Payments System and recommends further exploration of trends as more data is released in the coming years. The report also recommends that the relationship between physician prescribing behaviors and payments from manufacturers be further examined.

    Commissioners expressed general support for further analysis of physician prescribing trends, including the association to Medicare payments, and the need to reinforce transparency and ensure patient awareness.