On June 14, 2019, the Medicare Payment Advisory Commission (MedPAC) released its June 2019 Report to the Congress: Medicare and the Health Care Delivery System. Each June, as part of its mandate from the Congress, MedPAC reports on issues affecting the Medicare program as well as broader changes in health care delivery and the market for health care services.

The report includes a number of payment innovations to address rising spending for Medicare fee-for-service clinician payment, Medicare Advantage (MA) and Part B drugs.

• MedPAC recommends eliminating “incident to” billing for advanced practice registered nurses and physician assistants to better understand which providers are furnishing care to beneficiaries. MedPAC indicates they believe this will help CMS better target resources towards primary care.
• MedPAC concludes that the MA quality bonus program is flawed and inconsistent with its principles for quality measurement. MedPAC discusses an option to replace the current quality bonus program with a budget neutral value incentive program.
• MedPAC has a series of recommendations related to improving MA encounter data which is currently found to be incomplete. MedPAC believes this encounter data would be valuable to policymakers and researchers.
• To address increased spending on Part B drugs, MedPAC explores reference pricing and binding arbitration as a means to improve price competition for Part B drugs.

The report also includes an assessment of the Medicare Shared Savings Program (MSSP) and its effects on Medicare spending.  MedPAC concludes that spending growth was slightly lower for the Accountable Care Organization (ACO) population across the country – in some markets ACOs achieved material savings and in other markets there may have been no savings.  MedPAC also highlighted potential concerns about retrospective assignment methodologies in MSSP.

Finally, the June report included a report on clinician payment in Medicare mandated by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). MACRA required Commissioners to conduct a study of the statutory payment updates to clinician services from 2015 through 2019 and their effect on the access to, supply of and quality of clinician services. MedPAC concluded that thus far statutory updates have bene sufficient. While MACRA authorized an annual 0.5 percent update beginning July 1, 2015 and through 2019, in 2020 this is reduced to a zero percent update through 2025. While a zero percent update is mandated, it could in actuality result in a negative update with various budget neutrality scalers that are often applied to the annual update for clinician services.

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

For more information visit the McDermottPlus Payment Innovation Resource Center or contact Sheila Madhani at 202-204-1459 or smadhani@mcdermottplus.com; or Mara McDermott at 202-204-1462 or mmcdermott@mcdermottplus.com.