News: MedPAC releases annual report to Congress, pushes for quality-based reimbursement
The Medicare Payment Advisory Commission (MedPAC) recently released its annual report to Congress. Each June, MedPAC reports on issues affecting the Medicare program and broader changes in healthcare delivery as part of its mandate from the Congress. This year’s report includes seven chapters:
- Realizing the promise of value-based payment in Medicare: An agenda for change
- Challenges in maintaining and increasing savings from accountable care organizations (ACOs)
- Replacing the Medicare Advantage quality bonus program
- The impact of changes in the 21st Century Cares Act to risk adjustment for Medicare Advantage enrollees: A mandated report
- Realigning incentives in Medicare Part D
- Separately payable drugs in the hospital outpatient prospective payment system
- Improving Medicare’s end-state renal disease prospective payment system
The report says that in particular, it would like to draw attention to the first chapter on value-based payments, which is the result of a year-long discussion about the future of the Medicare program. “The Commission believes that unless substantial changes are made to the way Medicare pays for services and to how beneficiary care is organized and delivered, the cost of the Medicare program will remain on an unsuitable trajectory.”
According to the report, MedPAC stresses that the use of fee-for-service payment for Medicare services should be replaced over time by payment to accountable systems of care that have incentives to:
- Provide preventative services and early disease detection
- Improve the quality and beneficiary experience of care
- Avoid delivering unnecessary or inappropriate services
- Control the cost of providing necessary services in the most appropriate care setting
- Deliver chronic care services through care coordination among providers
- Coordinate both the medical and nonmedical needs of beneficiaries
- Enhance the use of technologies that improve quality and reduce program costs
An improved Medicare program with the above changes would allow most beneficiaries to opt to receive their care through accountable entities.
“Medicare could design incentives that encourage beneficiaries to choose one of these entities and give providers incentives to participate in them,” the report states.
MedPAC said that while it understands the extent of effort making such changes would entail, making improvements in various payment or delivery system innovations currently in place can be a starting point. It also acknowledges that the Congress and CMS are currently focusing their efforts on dealing with the challenges in the healthcare system due to the COVID-19 pandemic.
Editor’s note: The full MedPAC report can be found here. To read about other MedPAC recommendations, click here.