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MedPAC Releases June 2021 Report to Congress

For CFOs, finance & reimbursement staff, post-acute care staff, labs

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The Medicare Payment Advisory Commission (MedPAC) has released its June 2021 Report to the Congress, a mandated report that details analysis and recommendations about the Medicare program and health care delivery system.  

In the report, MedPAC outlines shortcomings of the current skilled-nursing facility (SNF) value-based purchasing (VBP) program design and recommends the program be eliminated as soon as possible. 

Identified shortcomings include the scoring, lack of consideration of social risk factors, and using a portion of the incentive pool to achieve program savings. The commission recommended that Congress replace the SNF VBP program with a SNF value incentive program that includes the five key design elements: 

  • Score a small set of performance measures 
  • Incorporate strategies to ensure reliable measure results  
  • Establish a system for distributing rewards with minimal “cliff” effects that awards points for every performance achieved with minimal use of thresholds, or cliffs   
  • Account for differences in patients’ social risk factors using a peer-grouping mechanism  
  • Distribute the entire provider-funded pool of dollars. All withheld funds would be distributed back to providers based on their performance. 

The commission also examined the impact of the changes to the clinical laboratory fee schedule (CLFS) and explored possible modifications to the processes of collecting private payer data from laboratories.  MedPAC worked with a third-party contractor, RTI International, to examine less burdensome methods for setting CLFS rates than the current private payer data reporting requirements mandated by the Protecting Access to Medicare Act of 2014 (PAMA).  

The analysis found that collecting private payer data through a survey instead of the current data collection method could produce accurate estimates of payment rates for independent laboratories, hospital laboratories, and physician-office laboratories and reduce the number of laboratories that would be required to report private-payer data. However, further analysis would be needed to fully explore this alternative to the Centers for Medicare & Medicaid Services’ current rate-setting process. 

MedPAC recommended that the current Medicare Advantage (MA) benchmark policy should be replaced with a new policy that applies a relatively equal blend of per capita local area fee-for-service (FFS) spending with price-standardized per capita national FFS spending, a rebate of at least 75%, and a discount rate of at least 2%. The new policy should also include the commission’s prior MA benchmark recommendations of using geographic markets as payment areas, FFS population with both Part A and Part B in benchmarks, and eliminating the current pre–Affordable Care Act cap on benchmarks. 

Additionally, the commission suggested that to improve Medicare’s payment for drugs under the outpatient prospective payment system, the pass-through policy should include only drugs and biologics that are supplied to a service and require drugs and biologics to be clinically superior to other therapeutically similar drugs to be eligible for pass-through status. MedPAC also recommended the separately payable non-pass-through policy be modified to explicitly apply only to drugs and biologics that are the reason for a visit and meet a defined cost threshold.  

The report also covers additional topics, including indirect medical education payments, vaccine coverage and payment, and beneficiaries’ access to care in rural areas.