News: MedPAC offers suggestions on how to simplify Medicare APMs

Following up on their June 2021 report calling for fewer Medicare alternative payment models (APM), the Medicare Payment Advisory Commission (MedPAC) offered strategies in their recent 2022 report to streamline Medicare APMs. They recommended that CMS move away from testing a large number of model tracks and instead operate on a small number permanently, so that efforts could shift to a larger scale. Most importantly, they suggested that APMs could be centered around a single population-based model, MedPage Today reported.

CMS oversees many APMs which each have many tracks, and MedPAC suggested that this can potentially “dilute incentives” from one APM to the next. Instead, they advised there only be one model with three tracks, which would be based on the size of provider groups and providers’ willingness to accept financial risk. Another option was to create a single-track model that was population-based, and shared saving and loss rates would differ based on the Accountable Care Organization (ACO). Benchmarks would be based on administrative updates, not actual spending, so ACO participants would have a clearer, more predictable yearly target to shoot for, MedPAC explained in the report.

MedPAC wanted to avoid models working against each other with conflicting incentives, however, and suggested that CMS continue testing episode-based payment models to identify types that could be added to model at a future time. Also, they “would allocate any bonus payments so that episode participants would have a strong incentive to deliver care efficiently, that ACO participants would have an incentive to use low-cost, high-quality episode providers,” James Mathews, PhD, executive director of MedPAC, explained during a press call. “And then lastly, [they] would assert that the total bonus payments made to each of the sets of participants should not result in increased Medicare spending."

Editor’s Note: To read MedPage Today’s article on this topic, click here. To read MedPAC’s June 2021 report, click here.