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MedPAC Reports to Congress

MedPAC has submitted its annual report to Congress.

The congressionally mandated report, titled Report to Congress:  Medicare and the Health Care Delivery System, consists of 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.
  • Mandated report: Impact of changes in the 21st Century Cures Act to risk adjustment for Medicare Advantage enrollees.
  • Realigning incentives in Medicare Part D.
  • Separately payable drugs in the hospital outpatient prospective payment system (OPPS).
  • Improving Medicare’s end-state renal disease (ESRD) prospective payment system (PPS).

While MedPAC’s recommendations are not binding on Congress or the administration, they are highly respected and often find themselves worked into new law or regulations.

Go here to see MedPAC’s news release accompanying the report and here to find the report itself.

MedPAC Issues 2018 Report to Congress

The non-partisan legislative branch agency that advises Congress and the administration on Medicare payment policies has submitted its mandatory annual report to Congress.

Among the findings included in the report by the Medicare Payment Advisory Commission are:

  • Medicare’s hospital readmissions reduction program has not resulted in increases in emergency room visits or hospital observation stays.
  • Many Medicare accountable care organizations, while maintaining or improving quality, are producing more modest savings than predicted.
  • MedPAC approves of Medicare’s proposals to redesign the case-mix classification system for skilled nursing facilities.
  • MedPAC supports changes Medicare has proposed for patient assessment and therapy requirements for skilled nursing facilities.

MedPAC’s recommendations include:

  • Authorizing outpatient-only hospitals in isolated rural communities to ensure access to emergency care.
  • Reducing payments to off-campus emergency departments in certain urban areas.
  • Rebalancing Medicare’s physician fee schedule to increase payments for ambulatory evaluation and management services while reducing payments for procedures, imaging, and tests.
  • Paying for sequential stays in a unified prospective payment system for post-acute care.
  • Establishing new ways to help patients, families, and hospitals identify higher-quality post-acute care providers for their patients.
  • Establishing new principles for measuring quality that address both population-based measures and quality incentives.
  • Encouraging the development of managed care plans that better meet the needs of the dually eligible (Medicare and Medicaid) population.
  • Eliminating Medicare payment increases for skilled nursing facilities in FY 2019 and FY 2020 because of the healthy financial condition of those facilities.
  • Urging Medicare to use a uniform set of population-based measures for different health care settings and different populations.
  • Moving forward with a unified post-acute-care payment system as quickly as possible.

Learn more about MedPAC’s thinking, research, conclusions, and recommendations by consulting the following materials:   the news release that accompanied MedPAC’s transmission of its report to Congress; a fact sheet that accompanied the report’s release; and the 407-page report itself.

MedPAC Meets

Last week the Medicare Payment Advisory Commission held two days of public meetings in Washington, D.C.

During the sessions MedPAC, a non-partisan legislative branch agency that advises Congress on Medicare payment issues, addressed the following subjects:

  • a Medicare Advantage status report
  • a Medicare prescription drug program (Part D) status report
  • hospital inpatient and outpatient payments
  • physician payments
  • ambulatory surgical center, dialysis center, and hospice payments
  • post-acute care facility payments
  • the hospital readmissions reduction program
  • telehealth
  • accountable care organizations

Go here to see the issue briefs and presentations used during the meetings.

Medicare Hits Payment Target

Medicare has achieved its goal of tying 30 percent of all Medicare payments to alternative payment models a year early, the Centers for Medicare & Medicaid Services has announced.

As of January of 2016, 30 percent of Medicare payments are tied to alternative payment models. In January of 2015, Health and Human Services Secretary Sylvia Mathews Burwell announced the target but said she hoped Medicare could achieve it by 2017.

Among the alternative care models to which Medicare payments are now tied are:

  • Medicare Shared Savings Program (MSSP)
  • Pioneer ACOs
  • Next Generation ACOs
  • Comprehensive End Stage Renal Disease (ESRD) Care Model
  • Comprehensive Primary Care Model
  • Multi-Payer Advanced Primary Care Practice
  • End Stage Renal Disease Prospective Payment System
  • Maryland All-Payer Model
  • Medicare Care Choices Model
  • Bundled Payment Care Improvement

Learn more about these alternative payment models here.

Another new alternative payment model, which mandates bundled payments for hip and knee replacements, begins in about 25 percent of the country on April 1.

To learn more about how Medicare achieved this goal and why federal officials believe moving in this direction is so important, see the CMS fact sheet “Better Care. Smarter Spending. Healthier People: Improving Quality and Paying for What Works.”

Medicare Expands ACO Participation

121 new organizations will be participating in Medicare accountable care organization programs, the Centers for Medicare & Medicaid Services announced this week.

100 new ACOs will join the 150 already participating in the Medicare Shared Savings Program, which rewards organizations that reduce their growth in health care costs while meeting quality performance standards. Of the 250 overall participants, 39 will also participate in a new ACO Investment Model that will provide pre-paid shared savings to encourage the formation of new ACOs in rural and underserved areas.

cmsAnother 21 ACOs will participate in the Next Generation ACO Model, a new initiative that features prospectively set benchmarks and enables participating providers to take on greater financial risk, with the opportunity for greater shared rewards as an incentive for doing so. Nearly half of these new ACOs will be led by doctors.

Once these new programs are launched, nearly nine million Medicare beneficiaries will be served through ACOs.

For further information about CMS’s expansion of ACO programs, see this New York Times article and this CMS news release.

Are Medicare ACOs Living Up to the Hype?

Not yet.

At least that’s the conclusion to be drawn based on a report recently released by the Centers for Medicare & Medicaid Services (CMS).

cmsAccording to a CMS fact sheet,

…the 20 ACOs [accountable care organizations]in the Pioneer ACO Model and 333 Medicare Shared Shavings Program ACOs generated more than $411 million in total savings in 2014, which includes all ACOs’ savings and losses. At the same time, 97 ACOs qualified for shared savings payments of more than $422 million by meeting quality standards and their savings threshold. The results also show that ACOs with more experience in the program tend to perform better over time.

Kaiser Health News, however, took the analysis a step further:

In August, Medicare officials released 2014 financial details showing that the so far the ACOs have not saved the government money. The 20 ACOs in the Pioneer program and the 333 in the shared savings program reported total savings of $411 million. But after paying bonuses, the ACOs recorded a net loss of $2.6 million to the Medicare trust fund, a fraction of the half a trillion dollars Medicare spends on the elderly and disabled each year.

Find the CMS fact sheet and a link to the financial reports here.

In addition to reporting on ACOs’ financial performance, Kaiser Health News solicited the views of several experts on ACOs. Find that article and commentaries by those experts here.

Medicare Unveils New ACO Program

The federal Center for Medicare and Medicaid Innovation is launching a new accountable care organization (ACO) model through which providers can join together to serve Medicare patients.

The “Next Generation ACO” seeks to build on the experience, insight, and feedback gained through the Medicare Shared Savings Program and the Pioneer ACO model and give providers more tools for managing care and resources while also enabling them to take on more financial risk and earn greater financial rewards for doing so successfully.

A broader objective is to move Medicare closer to its stated goal of paying most providers based on the quality of care they deliver rather than on the quantity of services they provide.

The new model will have two risk tracks, one of which will be close to 100 percent risk, and a choice of four payment methodologies that will seek to facilitate a transition from fee-for-service to capitated reimbursement.  Those four payment systems are fee-for-service, fee-for-service with a monthly infrastructure payment, population-based payments, and capitated payments.

The Center for Medicare and Medicaid Innovation has created a number of resources through which interested parties can learn more about the new model:  a news release, a post on the blog of the Centers for Medicare & Medicaid Services (CMS), and a new web page devoted to the Next Generation ACO.

Parties interested in applying to become a Next Generation ACO must submit a letter of intent to the innovation center by May 1.