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  • Washington Highlights

    MedPAC Releases June 2019 Report to Congress

    Andrew Amari, Hospital Policy and Regulatory Specialist

    The Medicare Payment Advisory Commission (MedPAC) June 14 released its June 2019 Report to Congress. In its report, MedPAC examines the use of scholarships and loan forgiveness programs to ensure an adequate supply of primary care physicians. Additionally, MedPAC makes one recommendation on slowing the growth of Medicare fee-for-service spending for emergency department (ED) services and examines restructuring Medicare Part D for the era of specialty drugs, as well as strategies to improve price competition and value for Part B drugs.

    In its chapter on beneficiary access to primary care, MedPAC examines ways to ensure an adequate supply of primary care physicians. Despite acknowledgment of evidence showing debt is not strongly related to specialty choice, MedPAC notes that existing loan forgiveness programs are not Medicare specific and policymakers may consider establishing a program specific to recruiting physicians that provide primary care to Medicare beneficiaries. In particular, the commission explores potential design choices for a scholarship or loan repayment program to incentivize medical students and residents to enter geriatrics residency programs.

    MedPAC discussed the issue of growing Medicare spending for ED services throughout its spring meetings [see Washington Highlights, March 8, April 5]. Specifically, the commission notes that an increasing number of ED visits coded at high-acuity levels without clear explanation may be best addressed through improving coding accuracy. To that extent, MedPAC recommends that the Health and Human Services (HHS) Secretary develop and implement a set of national guidelines for coding hospital ED visits under the outpatient prospective payment system by 2022.

    Additionally, in its examination of Part B drugs in the report, MedPAC identifies two potential policies to improve price competition and value. Specifically, with Part B spending growing rapidly, the commission considers the potential impact of reference pricing, which would establish a “reference” payment amount for groups of drugs with similar effects. MedPAC also explores a policy that would allow the HHS Secretary to enter into binding, “final-offer” arbitration with manufacturers in limited circumstances. Although binding arbitration is discussed in the context of Part B drugs, MedPAC acknowledges that it may be beneficial to extend prices achieved through binding arbitration to Part A providers as well.

    Finally, the commission evaluates new policy approaches to address rapidly increasing Part D spending for specialty drugs and therapies in its report. Notably, MedPAC examines how a new approach would modify Part D’s defined standard benefit to apply to Medicare beneficiaries both with and without Medicare’s low-income subsidy and would make plan sponsors responsible for 75% of benefits between the deductible and out-of-pocket threshold. The new approach also would require brand name drug manufacturers to provide a discount in the catastrophic phase of the benefit, as opposed to the current policy to provide the discount in the gap phase.