MedPAC releases Medicare payment policy recommendations

The Medicare Payment Advisory Committee (MedCAP) has released its March 2021 Report to the Congress: Medicare Payment Policy containing analyses and recommendations for lawmakers.

According to a news release, the report details recommendations for fee-for-service (FFS), Medicare Advantage (MA), Part D, and telehealth. It also includes a discussion of the preliminary effects of the COVID-19 coronavirus pandemic on access to care and the financial impact on physicians. A fuller accounting of those issues will require data which is still being collected.

Most of the report is based on data from 2019, but MedPAC attempted to consider the effects of the COVID-19 pandemic on their indicators, the release says.

The report’s recommendations include:

• FFS – MedPAC recommends a 2 percent increase for both inpatient and outpatient acute hospital care in addition to revising Medicare’s hospital quality incentive program. The committee also recommends the payments be updated by the amount specified by law for physicians and other health professionals. The committee further recommends no increase for 2022 for four FFS systems: ambulatory surgical centers, outpatient dialysis facilities, skilled nursing facilities, and hospice services.
• MA – The committee estimates that MA payments will average 104 percent of FFS spending in 2021, including intensive coding practices which result in excess payments. In previous years MedPAC has recommended that the Centers for Medicare & Medicaid Services (CMS) reduce payments stemming from coding practices and replacing the MA quality bonus program with one that more accurately characterized the quality of care in MA. The committee is also assessing an alternative MA benchmark policy.
• Part D – MedPAC sees Part D as a success but reiterates a 2020 recommendation to substantially change the benefit design to limit out-of-pocket spending, realign incentives to restore risk-based capitated payments, and eliminate features which distort market incentives.
• Telehealth after the pandemic – The committee presents a policy option for expanded Medicare coverage for telehealth after the pandemic is over which would see policymakers temporarily continue some of the expanded coverage implemented during the public health emergency for one or two years to gather more information on access to care, quality of care, and spending to inform any permanent changes. The policy option would call for Medicare to return to paying the physician fee schedule’s facility rate for telehealth services and collect data on the cost of providing them.

In an emailed statement Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association (MGMA), expressed dismay with the report’s recommendations for increases in physician services payment and the long-term effects of the COVID-19 pandemic.

“MedPAC also states it does not anticipate any long-term effects related to the public health emergency that would warrant changing the annual update to Medicare’s fee schedule for 2022,” Gilberg says in the statement. “At this point, it is too early to assume that medical practices will not continue to experience financial challenges stemming from the COVID-19 pandemic next year or an acceleration in post-pandemic practice-cost inflation. Without congressional intervention, group practices will also face payment cuts in 2022 attributed to sequestration and a likely lower physician fee schedule conversion factor due to evaluation and management service revaluations.”