2012 MedPAC Report

In its 2012 Annual Report to Congress on the Medicare program, the Medicare Payment Advisory Commission looks at issues which it feels need to be addressed to improve the program, both from a fiscal perspective and in terms of the benefits for and experience of the Medicare enrollees.   (MedPAC Report)   As it has done in other reports or testimony to Congress, MedPAC first focuses on what it perceives as necessary changes to the fee-for-service benefit package.  In particular, they recommend an out-of-pocket maximum, a standard feature in commercial insurance, to protect enrollees against too much expense, changing coinsurance to fixed copayments, eliminating or limiting copayments for high-value services and increasing them for low-value ones, and changing supplemental insurance so that it did not eliminate the incentive for beneficiaries to be careful users of health services.

The Commission has long felt that fee-for-service Medicare is essentially unmanaged care, with fragmented and often duplicative services that do not deliver the best quality or value for the money.   While demonstrations of coordinated and managed care in Medicare have been disappointing, the Commission believes that better option to improve care coordination should still be pursued, including potentially paying providers to render such coordination and rewarding well-coordinated care and penalizing poor care.  MedPAC emphasized the need for these programs for dual-eligibles in particular.  In regard to Medicare Advantage, the Commission found that while the risk-adjustment method has become more accurate, further improvement is needed to avoid the MA plans seeking to selectively enroll beneficiaries from whom they expect to make more money.    Rural beneficiaries have greater problems with access to quality care and the Commission devoted a chapter of the report to suggestions for ensuring that these patients have better care.