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MedPAC Meets

Last week the Medicare Payment Advisory Commission met in Washington, D.C. to discuss a number of Medicare payment issues.

The issues on MedPAC’s April agenda were:

  • Expanding the use of value-based payment in Medicare
  • Medicare Shared Savings Program performance
  • Redesigning the Medicare Advantage quality bonus program
  • Increasing the accuracy and completeness of Medicare Advantage encounter data
  • Evaluating patient functional assessment data reported by post-acute-care providers
  • Options for slowing the growth of Medicare fee-for-service spending for emergency department services
  • Options to increase the affordability of specialty drugs and biologics in Medicare Part D
  • Improving payment for low-volume and isolated outpatient dialysis facilities

Many of these issues are important to private safety-net hospitals.

MedPAC is an independent congressional agency that advises Congress on issues involving the Medicare program.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy.

Go here for links to the policy briefs and presentations that supported MedPAC’s discussion of these issues.

 

ACOs, APMs Proliferate

The number of accountable care organizations and alternative payment models is growing, as is the number of people served by such programs.

According to a new study published on the Health Affairs Blog, there are more than 900 ACOs across the country – a 10 percent increase over a year ago.

32 million Americans are served by ACOs today – 2.2 million more than a year ago.  Among them, 59 percent are served through commercial contracts, 29 percent by Medicare contracts, and 12 percent under Medicaid contracts.  ACO growth is greatest in metropolitan areas, the states with the greatest ACO penetration are Rhode Island and Maine, and the states with the least ACO penetration are Wyoming and West Virginia.

Among alternative payment models, growth is greatest among shared-savings and shared-risk ACOs, include episode-based models and partially- and fully-capitated payments for patient populations.  Today, APMs account for more than 30 percent of Medicare payments, with the greatest number, by far, participating in Medicare’s Comprehensive Primary Care Plus Model, followed by Medicare’s Comprehensive Care for Joint Replacement and Shared Savings Program models.

Learn more about the growth of ACOs and APMs, the current policy environment for such approaches, and possible future changes in these approaches in this Health Affairs Blog article.

CMS Proposes Changes in Medicare ACO Benchmarking

The Centers for Medicare & Medicaid Services has proposed a major change in how performance benchmarking is done for participants in its Medicare shared savings program.

According to a CMS news release announcing the newly proposed regulation that includes this change,

cmsKey proposals include:

  • Recognizing that health cost trends vary in communities across the country by using regional, rather than national, spending growth trends when establishing and updating an ACO’s rebased benchmark.
  • Adjusting an ACO’s rebased benchmark when it enters a second or subsequent agreement period by a percentage (increased over time) of the difference between fee-for-service
  • spending in the ACO’s regional service area and the ACO’s historical spending, which will provide a greater incentive for continued ACO participation and improvement.
  • Giving ACOs time to prepare for benchmarks that incorporate regional expenditures by using a phased-in approach to implementation.  

Other changes would include:

  • Adding a participation option to facilitate an ACO’s transition to performance-based risk arrangements by allowing eligible ACOs to elect a fourth year under their existing first agreement and defer by one year entering a second agreement period under a performance-based risk track.
  • Streamlining the methodology for adjusting an ACO’s benchmark when its composition changes.
  • Clarifying the timeline and other criteria for reopening determinations of ACO shared savings and shared losses for good cause or fraud or similar fault.

CMS hopes the changes will produce $120 million in federal savings between 2017 and 2019 and foster the creation of more ACOs to serve Medicare patients.

To learn more about what CMS is proposing to improve the Medicare shared savings program, see CMS’s news release announcing the proposal and CMS’s fact sheet describing the proposal in greater detail.

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.