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Washington Highlights

MedPAC Discusses ACOs, Risk Adjustment, Patient Engagement and Health Care Disparities

September 13, 2013—The Medicare Payment Advisory Commission (MedPAC) Sept. 12 and 13 meeting covered a broad spectrum of issues: the overall context of Medicare payment policy, policy issues related to Medicare Accountable Care Organizations (ACOs) and other alternative payment models, risk adjustment in Medicare Advantage plans, and the potential relationship of patient engagement and activation with health care disparities.

The meeting began with a session on the context for Medicare payment policy, which highlighted that Medicare spending will continue to outpace economic growth, and this combined with accelerating enrollment will continue to put pressure on Congress to reduce Medicare spending.

Staff then presented long- and short-term adjustments that could be made to ACOs.  Short-term adjustments include analyzing differences between Pioneer and Medicare Shared Savings Program (MSSP) ACOs, including the size requirements and attribution methodology. Longer-term issues included the potential alignment of ACOs and Medicare Advantage plansand ensuring payment equity across programs. 

The commission’s discussion emphasized the need to focus on requirements for CMS’s next contract cycle, determining whether ACOs are achieving their intended policy purpose, and anticipating whether institutions will continue to be interested in becoming ACOs. One issue that emerged fromthis discussion is the need to determine whether all ACOs eventually should have to take on downside risk, how much control the ACOs have to modify patient behavior, and to what degree this will cause stress points for providers and beneficiaries.

The focus on new payment and delivery models continued into the second day of the commission’s meeting, which opened with an update on Medicare's ability to innovate on payment and delivery system reforms.  This led to dialogue about how CMS should evaluate innovation demonstrations, the extent to which state initiatives should be translated to the national Medicare program versus maintaining local flexibility, and which innovations should be prioritized for dissemination due to their effectiveness or because they could be implemented in a more expedient manner. 

AAMC Chief Health Care Officer Joanne Conroy, M.D., made a public comment that the academic medical center community agrees with the urgency of implementing payment and delivery innovations.  Dr. Conroy reminded the commission that the shift of care from inpatient to ambulatory settings could have an effect on the amount of support Medicare provides for graduate medical education because of ties between Medicare GME payments and inpatient admissions. She urged the commission to monitor how the new payment models affect GME payments to ensure an adequate number of physicians and sufficient access to care for a growing Medicare population.

Other topics discussed included the need for accurate and consistent risk adjustment for Medicare Advantage and the new payment models, such as ACOs and bundling. 

The MedPAC staff also presented on patient engagement and activation, and how these could potentially improve health care disparities.


Allison M. Cohen, J.D., LL.M.
Senior Policy and Regulatory Specialist
Telephone: 202-862-6085

Mary Patton Wheatley, M.S.
Director, Health Care Affairs
Telephone: 202-862-6297


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806