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  • Washington Highlights

    MedPAC Meets to Discuss Add-On Payment to Safety-Net Providers and Telehealth

    Mary Mullaney, Director, Hospital Payment Policies
    For Media Inquiries

    The Medicare Payment and Advisory Commission (MedPAC) met on Sep. 29 and 30 to discuss, among other items, a payment add-on to support providers that care for a disproportionate share of low-income beneficiaries as well as a mandated report on the expansion of telehealth.

    Add-on Payment

    MedPAC staff continued its discussion on identifying safety-net providers based on the volume of low-income beneficiaries they serve. Low-income beneficiaries are defined here as individuals eligible for full or partial Medicaid benefits and those eligible for the Medicare Part D low-income subsidy. MedPAC staff expressed that providers who treat a disproportionate share of low-income beneficiaries could be financially challenged, which could negatively impact such things as beneficiary access to care and health outcomes. Providers treating these beneficiaries often do not receive the full allowed payment amount because they cannot collect cost sharing from these beneficiaries and some state Medicaid programs do not pay the cost sharing.

    Under the proposal, safety-net providers that bill under the Medicare physician fee schedule and meet the definition of safety-net provider would receive an add-on payment when furnishing care to identified low-income beneficiaries. The add-on payments would be new Medicare dollars and not implemented in a budget-neutral manner. Staff presented four options to implement the add-on payments for commissioners’ feedback. All commissioners supported the add-on payment, but favored different options, particularly whether there should be different add-on payments for primary care and nonprimary care clinicians.

    Staff also asked whether add-on payments should be made for beneficiaries enrolled in Medicare Advantage (MA) plans. Some commissioners supported an add-on payment for beneficiaries enrolled in MA plans and the proposal that the payment would be sent directly to the provider, not the plan. Lastly, under the proposal, some providers eligible for the add-on payment could receive a total payment that exceeds the allowed payment amount. Commissioners did not oppose this scenario.

    Expansion of Telehealth

    MedPAC staff presented findings in preparation for a congressionally mandated report focused on determining the future of telehealth after the end of the public health emergency (PHE). The report is due June 2023 and is intended to outline potential policy options for expanding payment for telehealth. Options discussed included recommending the following:

    • Medicare continue certain telehealth expansions for a limited duration to allow policymakers additional time to gather information
    • Medicare return to paying the physician fee schedule’s facility rate for telehealth services
    • Not allowing providers to reduce or waive cost sharing for telehealth services
    • Adding additional safeguards to protect the Medicare trust fund and beneficiaries from unnecessary spending and potential fraud.

    In the mandated report, the commission will analyze changes in telehealth and spending during the PHE, assess the impact of telehealth and access and quality, and explore using population-based outcome measures to assess the impact of telehealth expansion on access and quality. Commission staff presented several options for post-PHE payment of telehealth services, including bundling telehealth services into a larger unit of payment instead of paying separately for each service by expanding evaluation and management office and outpatient visit codes. Staff also presented the option to pay Federally Qualified Health Clinics and Rural Health Centers at the rate that is based on the physician fee schedule, which is about 50% less than standard payment rates for those facilities.

    In their discussion, commissioners acknowledged the many benefits of telehealth, including expanding access to care, promoting equity, and lowering costs. They also acknowledged that, when correctly performed, many services can be provided safely, efficiently, and effectively. However, commissioners also shared concerns regarding the potential for overuse, overpayment, misdiagnoses, and fraud. Some of the commissioners supported the use of bundled payments for telehealth services. Some suggested allowing telehealth services only when provided through accountable care organizations and advanced alternative payment models, while others were concerned that these strategies were not inclusive enough and would limit beneficiary access to telehealth services.