The December MedPAC Meeting

The Medicare Payment Advisory Commission holds regular meetings at which issues of current pertinence to the program are discussed and policy recommendations made to Congress and CMS.  The presentations and transcripts of these meetings are available to the public.  At the December meeting the Commission reviewed reimbursement for several provider types.  (MedPAC Meeting)   In general adequacy of payment is assessed by using beneficiary access measures, financial performance of the provider class, volume growth and quality.  MedPAC strives to balance access and quality with minimizing provider profits.  Access to physicians and other outpatient providers remains very high and beneficiaries very satisfied with their access, in both cases Medicare beneficiaries outperform commercial insurance members.  Quality measures were stable.  Volume growth in number of services delivered to beneficiaries was very low.  The Commission strongly recommended, as it has repeatedly in the past, that the SGR formula for physician payment be repealed and replaced.  The Commission urged no increase in payments for outpatient surgery centers and noted again its concern about the possible shift in services to hospital outpatient departments where they are more highly reimbursed and the need to equalize payments across settings.  Hospitals in general have negative margins on inpatient Medicare business, although some make money, but concern was expressed that scheduled reimbursement reductions will cause all hospitals to lose money on Medicare patients.  Hospital inpatient volume is declining slightly.  The Commission recommended a net increase to hospital inpatient and outpatient payments for 2015, after a complex set of changes to payment policies, to avoid potential negative financial and access issues that could be caused by current reimbursement policy.  The Commission continued to express concern also about the design of the SNF and home health benefits and the extent to which payment policy needed to be adjusted to avoid undue profit margins.  A home health readmissions reduction program was also recommended and the Commission  would like to see some sort of bundled episode payments that cover both inpatient care and the following nursing and home health care.  Finally, the Commission proposed adding the Medicare hospice benefit into the Medicare Advantage package, which it is currently separate from.