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Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

MedPAC Discusses Telehealth, Pharmacy Benefit Managers, Quality of Post-Acute Care Providers

September 8, 2017—The Medicare Payment Advisory Commission (MedPAC) Sept. 7-8 met to discuss a wide range of issues, including telehealth services in the Medicare program, pharmacy benefit managers (PBMs) and specialty drugs, and beneficiary use of higher quality post-acute care providers.

MedPAC staff discussed the current state of the Medicare program, including program solvency. While the growth rate of health care spending slowed in 2009 for all payers, it increased in 2014 due to new treatments for Hepatitis C and the expansion of insurance coverage. Commission staff noted that there continues to be growth in hospital outpatient departments reflecting a general shift of services to the outpatient setting, increasing prices of oncology drugs, and more observation services.

Commission staff presented a mandated report on telehealth, noting that about 70 percent of telehealth services under the Medicare program occur outside of the physician fee schedule, where coverage is most constrained, instead being reimbursed through other fee-for-service payment systems, the Medicare Advantage program, and Center for Medicare and Medicaid Innovation (CMMI) initiatives, where coverage is more flexible. Staff also discussed the challenges with payment under the physician fee schedule, in determining the distant and originating site fee, as well as cost sharing amounts (which could vary based on the facility).

Additionally, MedPAC staff presented an overview of PBMs and specialty pharmacies. The PBM industry is evolving but the top three PBMs service 70 percent of claims; these PBMs also have their own specialty pharmacy. While generally a high-level discussion, there was debate whether specialty drugs should be managed under the medical or pharmacy benefit. Commissioners ultimately agreed that this is a complicated issue and requested that MedPAC staff consider ways to simplify the discussion. 

Commission staff presented ways to encourage beneficiaries to seek higher-quality post-acute care (PAC) providers. Staff noted that most beneficiaries have multiple PAC providers to choose from, but the quality of these providers varies drastically within each type of provider. Commissioners and staff noted that challenges exist for beneficiaries in choosing their PAC providers. While quality information is publicly available, it covers a wide range of quality measures, many beneficiaries do not know what to look for, and many hospitals are not permitted to provide recommendations. An exception to this occurs in the Comprehensive Care for Joint Replacement program, which allows hospitals to make PAC provider recommendations.

Contact:

Mary Mullaney
Director, Hospital Payment Policies
Telephone: 202-909-2084
Email: mmullaney@aamc.org

Kate Ogden
Policy & Regulatory Analyst
Telephone: 202-540-5413
Email: kogden@aamc.org

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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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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org