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MedPAC’s Medicare Advantage Comments.

By January 17, 2011Commentary

The Medicare Payment Advisory Commission has weighed in on CMS’ proposed changes to the Medicare Advantage benefit scheme and its quality payment plan.  CMS has proposed to prohibit the MA plans from imposing cost-sharing on home health care and to not allow plans to tier cost-sharing on benefits.  MedPAC’s objections center on the notion that inhibiting the plans’ ability to innovate in benefit design may lead to higher costs and less effective care.  The commission noted that home health care has been rife with abuse and misuse, and is difficult to monitor, so that cost-sharing might encourage beneficiaries to be more thoughtful in using the benefit.  (MedPAC Letter)

In regard to the proposal to prohibit variance of cost-sharing by provider network selected or utilization of services; which CMS rationalizes by concerns about transparency or deception; MedPAC suggested that it might support not discriminating by use of services, although in some cases like value-based insurance design, that might actually help higher-utilizing patients; but the prohibition of provider tiering would limit plans’ ability to reward beneficiaries for seeking providers with high-quality, low-cost attributes.  CMS appears to be unduly paternalistic in this proposal.

In regard to the proposal to implement a system-wide bonus plan for MA plans, MedPAC reiterated its general objection to using “demonstration” projects to in fact make a wholesale change in the program, in this case substantially raising total costs.   The commission also believed the bonus plan design was too generous and would not give adequate incentives for plans to really improve quality.  It will be interesting to see if CMS pays any attention to these recommendations; in general the agency doesn’t seem too interested in outsider perspectives these days; often implementing rules without any, or very short, comment periods.

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