MedPAC Considers 2021 Payment Updates for Doctors and Hospitals and Discusses MA

The Medicare Payment Advisory Commission (MedPAC) met on December 5, 2019, to discuss 2021 payment updates for physicians, inpatient and outpatient hospital services and the annual update on the status of Medicare Advantage (MA) as they prepare their annual March Report to Congress.

Physician and other health professional services

MedPAC staff presented findings on beneficiary access to care, the quality of care and Medicare payments and providers’ costs as measures to assess the adequacy of Medicare’s fee schedule payments for physician services. Survey data indicated good access to care and multiple quality indicators were also positive. As in previous years, MedPAC expressed concern regarding the adequacy of payments for primary care physicians.

Commissioners discussed a draft recommendation that Congress should update the 2020 Medicare payment rates in calendar year 2021 for physicians and other health professional services by the amount determined under current law. Currently, there is no update authorized for physician services in 2021. There was general consensus around this draft recommendation that will be formally voted on during the January 2020 meeting. Slides from this presentation are available here.

Inpatient and outpatient hospital services

MedPAC evaluated beneficiary access to care, the quality of care, hospitals’ access to capital and Medicare payments and hospitals’ costs. In 2018, Medicare fee-for-service payments increased 3.6% from 2017, totaling $201 billion. MedPAC found key indicators of quality of care in hospitals, risk-adjusted mortality, readmissions and patient experience remained stable from 2016 to 2018.

MedPAC considered recommendations for the 2021 hospital payment update. Outpatient and inpatient rates are currently set to increase 2.8% in 2021. MedPAC staff presented a recommendation to the commission to increase payments by 2% in 2021 and provide an additional 0.8% through the Commission’s proposed Hospital Value Incentive Program (HVIP). The HVIP, an alternative consolidated hospital quality program was recommended by MedPAC in their March 2019 Report to Congress. MedPAC also considered a recommendation to update hospital rates by the full 2.8% in 2021 with an additional increase for HVIP or “efficient” providers.

The general consensus was not reached on a recommendation. It will be discussed further in January, followed by a formal vote. Slides from this presentation can be found here.

Annual Medicare Advantage Update

MedPAC evaluates the Medicare Advantage (MA) program annually to assess enrollment, payment, and quality. Currently, enrollment is at an all-time high with 34% of Medicare beneficiaries enrolled in a MA plan. However, MedPAC identified a potential area of concern in discrepancies in coding practices between MA and fee-for-service (FFS) which led to $6 billion in excess payments in 2018.

The Commission considered additional measures MedPAC should consider to evaluate the MA program. Other investments made by MA plans, such as whole health models of care, was a recommended measure to evaluate the true impact of plans on beneficiary care and health. Additionally, it was recommended that MedPAC evaluate differences in beneficiaries that switch into the MA program from FFS, as analyzing differences between groups will provide additional information on the adequacy of payment even with present differences in coding.

As this was not a comprehensive discussion of the MA program, MedPAC will continue discussing the status of the program during future public meetings. Slides from this presentation can be found here.

The next MedPAC public meeting is scheduled for January 16 to 17, 2020.

MedPAC is an independent congressional agency established by the Balanced Budget Act of 1997 (P.L. 105-33) to advise the US Congress on issues affecting the Medicare program. More information on MedPAC is available on their website.

 

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For more information visit the McDermottPlus Payment Innovation Resource Center or contact Kelsey Haag at 202-204-1464/khaag@mcdermottplus.com or Sheila Madhani at 202-204-1459/smadhani@mcdermottplus.com.