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MedPAC Releases June 2021 Report to Congress

June 17, 2021

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CONTACTS
Andrew Amari, Hospital Policy and Regulatory Specialist

The Medicare Payment Advisory Commission (MedPAC) released its June 2021 Report to Congress on June 15. In its report, the commission makes recommendations on Medicare’s indirect medical education (IME) adjustment, separately payable drugs in the hospital outpatient prospective payment system (OPPS), and vaccine coverage and payment. Additionally, the report contains recommendations on replacing the skilled nursing facility (SNF) value-based purchasing (VBP) program, and the Centers for Medicare & Medicaid Services (CMS) portfolio of alternative payment models (APMs).

The report contains a recommendation to Congress that it “should require CMS to transition to empirically justified indirect medical education adjustments to both inpatient and outpatient Medicare payments” [refer to Washington Highlights, April 2]. Additionally, the commission outlines several “principles for IME reform”, which include providing the IME adjustment for both inpatient and outpatient services, basing the IME adjustment on a hospital’s ratio of residents to patients (rather than beds), and transitioning to empirically justified levels of IME payments. The AAMC submitted a letter detailing its concerns with the commission’s recommendations in advance of the June 2021 report being published [refer to Washington Highlights, April 23].

Regarding separately payable drugs, MedPAC recommends that Congress should direct the Department of Health and Human Services (HHS) Secretary to modify the current OPPS separately payable pass-through drug policy so that only drugs and biologics that are clinically superior to their packaged alternatives would be paid separately. Moreover, the commission recommends that the HHS Secretary specify that the policy applies only to drugs and biologics that are the reason for a visit and meet a defined cost threshold.

Additionally, MedPAC’s chapter on vaccine coverage and payment policy contains two recommendations that direct Congress to cover preventative vaccines and their administration under Medicare Part B instead of Part D, as well as provide 103% of wholesale acquisition cost for preventative vaccines covered under Part B.

In the report, commissioners recommend replacing the current SNF VBP program with a new SNF value incentive program, which would be based on a small set of quality measures and use a peer grouping approach to stratify performance to account for differences in patient social risk factors, and also recommends finalizing the development of and reporting on patient experience measures for SNFs.

Finally, in its chapter on APMs, the commission recommends that the CMS should “implement a more harmonized portfolio of fewer alternative payment models that are designed to work together to support the strategic objectives of reducing spending and improving quality” [refer to Washington Highlights, April 2].

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