In public meetings held on January 11-12, 2018, Medicare Payment Advisory Commission (MedPAC) members voted to recommend that Congress maintain Medicare’s current updates for payments to providers for acute care hospital services and physician and other health professional services, eliminate the Merit-Based Incentive Payment System (MIPS), and exercise caution in further incorporating telehealth services into Medicare fee schedule. These recommendations will become part of the report MedPAC submits to Congress later this year.
Payments for Acute Care Hospital Services
By law, MedPAC is required to review Medicare payment policies and make recommendations to Congress, including whether Medicare payments to acute care hospitals are adequate and how they should be updated in 2019. For calendar year (CY) 2019, MedPAC members present at the meeting voted unanimously to recommend that Congress should update the 2018 Medicare base payment rates, inpatient and outpatient, for acute care hospitals by the amount determined under current law. MedPAC’s recommendation stated that the current law update was appropriate “given that beneficiaries maintained good access to care, outpatient volume growth remained strong, providers continued to have strong access to capital, all while quality improvement continued, despite negative Medicare margins for most providers.” MedPAC reasoned that the current law update “balances the need to have payments high enough to maintain access to care and the need to maintain fiscal pressure on hospitals to control their costs.”
Payments for Physician Services, Elimination of MIPS
For CY 2019, MedPAC members voted unanimously to recommend that Congress increase the CY 2018 payment rates for physician and other health professionals by the amount specified under current law. MedPAC’s recommendation noted the absence of change in expected spending relative to the current law baseline and did not expect the recommendation to affect beneficiaries’ access to care or providers’ willingness or ability to furnish services.
MedPAC members also voted 14-2 in favor of eliminating MIPS, which was established as part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) as an incentive-based payment system for physicians that will adjust physician Medicare fee-for-service (FFS) payments up or down based on certain quality and other measures beginning in 2019. As previously reported here, MedPAC also urged the elimination of MIPS during its October 2017 meetings. MedPAC’s recommendation is based on its overall concerns that MIPS will not succeed in helping beneficiaries choose clinicians, helping clinicians change practice patterns to improve value, or helping the Medicare program to reward clinicians based on value.
Instead of MIPS, MedPAC recommends that Congress establish a new voluntary value program in which clinicians can elect to be measured as part of a voluntary group, and clinicians could qualify for a value payment based on their group’s performance on a set of population-based measures.
Telehealth Services and the Medicare Program
MedPAC is required under the 21st Century Cures Act of 2016 to report on the extent to which the Medicare FFS program and commercial insurance plans cover telehealth services, and ways in which the telehealth coverage policies of commercial insurance plans might be incorporated into Medicare FFS. MedPAC’s report is due to Congress on March 15, 2018. In its January 2018 meeting, MedPAC reviewed its final draft report findings on telehealth services. MedPAC found that flexible coverage of telehealth existed under risk-bearing entities such as Medicare Advantage and ACOs, and that coverage is most constrained under the Physician Fee Schedule. MedPAC also sampled a large group of commercial insurance plans and found that most plans covered some telehealth services, but few did so comprehensively. MedPAC found wide variation in coverage, but basic physician visits and mental health visits were among the most common types of services covered.
In terms of how to incorporate commercial coverage into Medicare, MedPAC found that commercial plans “do not offer a clear and homogenous model for Medicare to follow.” MedPAC noted that while commercial plans have a variety of tools at their disposal to control volume incentives and potential misuse, under the Medicare fee schedule taxpayers are not indemnified against this incentive, and telehealth may be more vulnerable to misuse. In addition, while commercial plans often use pilot programs to test telehealth coverage, Medicare to date has not tested telehealth to the same degree. Therefore, MedPAC recommends that policymakers “exercise caution in further incorporating telehealth services into the fee schedule.”
In order to simultaneously exercise caution and advance the Medicare program, MedPAC recommends that policymakers use the following three principles in the evaluation of individual telehealth services for potential incorporation into the Medicare program: (1) reducing costs; (2) expanding access; and (3) improving the quality of care. MedPAC noted that while a given telehealth service may not demonstrate evidence of all three principles, a service should strike a balance between the three. MedPAC members voted unanimously in support of the report.
A copy of the January 11-12, 2018, meeting transcript is available here.
