By Remy Kerr, MPH, AMRPA Health Policy and Research Manager
On March 15, the Medicare Payment Advisory Commission (MedPAC) released its March 2021 Report to Congress. In the report MedPAC included its standard chapters addressing each of the nine payment systems in the Medicare program, the current status of the Medicare program from which the Commission bases its payment update recommendations, and a status report on the Medicare Advantage and Medicare Part D prescription drug program. MedPAC also included an additional chapter on expansion of telehealth in the Medicare program resulting from the COVID-19 public health emergency (PHE).
As expected, MedPAC recommended a 5% payment reduction for inpatient rehabilitation hospitals and units (IRFs), and reiterated the Commission’s 2016 recommendation that the high-cost outlier pool be expanded and that the HHS Secretary conduct focused medical record reviews of IRFs. As in its public meetings, MedPAC asserted that the PHE was considered when “relevant” and that it viewed targeted temporary relief to be the appropriate approach rather than across the board annual payment updates. Within the IRF-specific chapter, MedPAC included much of the analysis discussed in the December public meeting (a summary is available here), including the new cost-to-payment analysis. Expected payment update recommendations that were formally approved in January 2021 were also made for other post-acute care (PAC) settings. It was recommended that long-term care hospitals receive a 2% payment increase, skilled nursing facilities (SNFs) receive no update, and home health agencies (HHAs) a 5% payment reduction.
In addition to the payment update chapters, MedPAC included a new chapter on telehealth expansion within the Medicare program following the PHE. The commission recommended that telehealth be expanded for a set period (e.g., one to two years) after the PHE declaration ends in order to collect more data on the services. In the one- to two-year time period, MedPAC recommended that Medicare: 1) pay for telehealth services to all beneficiaries regardless of location; 2) cover certain telehealth services in addition to pre-PHE covered services if there is a “potential for clinical benefit;” and 3) cover certain audio-only telehealth services if there is a “potential for clinical benefit.” In the one- to two-year period after the PHE declaration ends, MedPAC recommended that Medicare pay the lower Physician Fee Schedule facility rate, and that providers no longer be able to waiver or reduce beneficiary cost-sharing for the services. MedPAC also acknowledged the fraud concerns related to telehealth expansion. To address these, the Commission recommended: 1) applying additional scrutiny to outlier clinicians; 2) requiring a face-to-face/in-person visits prior to high-cost durable medical equipment or laboratory test orders; and 3) prohibit the use of “incident to” billing if a clinician is able to bill Medicare directly.
In addition to the release of the March 2021 Report to Congress, MedPAC held its second to last meeting of the 2020 – 2021 cycle on March 4 and 5. Several of the sessions were follow-ups and intended for discussion on draft recommendations that will be formally voted on in April for inclusion in the June 2021 Report to Congress. MedPAC also considered updates to reports that will be included in the June report. In sessions most relevant to AMRPA members, MedPAC discussed a Congressionally requested update to a 2012 report on Medicare beneficiaries’ access to care, a replacement to the SNF value-based purchasing (VBP) program, and consolidating the number of CMS alternative payment models (APMs). Meeting materials and a transcript of the sessions are available here.
In a follow-up to the November 2020 meeting, MedPAC staff presented additional data requested by commissioners related to Medicare beneficiaries’ access to care. Following the November meeting, MedPAC staff added frontier beneficiaries as a data stratification and conducted an analysis on beneficiary access to home health agencies (HHAs) and SNFs (note: access to other PAC settings, including IRFs, were not included in the analysis). According to MedPAC analysis, frontier beneficiaries – much like rural beneficiaries – had to travel further to access specialists compared to urban beneficiaries. Differences in accessing primary care were much smaller between urban, rural and frontier areas. MedPAC staff also reported that E&M encounters increased in rural areas where hospital closures had recently occurred compared to rural markets without a hospital closure. In terms of PAC, MedPAC analysis found access to HHAs and SNFs to be similar among urban and rural beneficiaries, with rural beneficiaries having slightly higher access in some cases. Commissioners were supportive of the revisions to MedPAC staff’s analysis thus far and recommended additional research into quality and value of care in rural hospitals, staffing challenges and the impact of larger health systems in rural areas. Some commissioners also requested more granular data on the specific services or specialties that rural and frontier beneficiaries have most challenge accessing. MedPAC will include an interim report on the topic in its June 2021 Report to Congress and a final report in June 2022. The final report will include data stratification of beneficiaries with dual-eligible status, medically underserved areas and beneficiaries with chronic conditions.
In the session dedicated to the SNF VBP replacement, MedPAC staff presented rationale for the session, including a Congressional mandate. Following meetings in September and October 2020 and January 2021 in which the Commission discussed alternatives to the current VBP program, MedPAC staff presented draft recommendations for consideration, and next month commissioners will formally vote on the recommendations for inclusion in the June report. To address previously identified flaws with the current SNF VBP program, MedPAC presented two draft recommendations. The recommendations were: 1) The Congress should eliminate Medicare’s current SNF VBP program and establish a new value incentive program that: scores a small set of performance measures; incorporates strategies to ensure reliable measure results; establishes a system for distributing rewards that minimize cliff effects; accounts for differences in patient social risk factors using a peer grouping mechanism; and completely distributes a provider-funded pool of dollars as rewards and penalties; and 2) The Secretary should finalize development of and begin to report patient experience measures for SNFs. Commissioners were generally supportive of the recommendations but expressed ongoing concerns related to properly accounting for social risk factors.
Like others, the session on APMs was a follow-up to the January 2021 meeting, with the March session dedicated to discussion of the draft recommendation and a formal vote to follow in April. MedPAC staff reiterated information from a prior analysis on the high number of APMs and limited amount of savings accountable care organizations, episode-based payment models and primary care transformation models have had on the Medicare program. According to MedPAC literature review, APMs also have mixed results on improving quality. MedPAC staff highlighted challenges that could make achieving spending and quality improvements with APMs more difficult, including several unintended consequences of operating a high number of coinciding models. To rectify this, MedPAC presented a draft recommendation that read as follows: The Secretary should implement a more coordinated portfolio of fewer alternative payment models that support the strategic objectives of reducing spending and improving quality. Commissioners were supportive of the draft recommendation, but many urged for inclusion of additional language in the MedPAC report highlighting ways in which APMs are effective. Some commissioners also recognized challenges in determining which models should be eliminated. Commissioners will formally vote next month, and the formal recommendation will be included in the June 2021 Report to Congress.
AMRPA staff will conduct deeper analysis of the MedPAC report and post any relevant updates on AMRPA Access
. Memorandums summarizing 2020 – 2021 MedPAC meetings are available to AMRPA members here
. Direct questions related to Med
 CMMI has seven categories of models, three of which are considered alternative payment models – accountable care organizations (ACOs), episode-based payment models, and primary care transformation models.