MedPAC Releases March 2010 Report to Congress

The Medicare Payment Advisory Commission (MedPAC) released its March 2010 “Report to the Congress: Medicare Payment Policy” on March 1. The report contains annual rate adjustment recommendations for Medicare’s various fee-for-service (FFS) payment systems.

The following is a summary of 2011 FFS payment update recommendations contained within the report.

Ambulatory Surgical Center CASCC

Physicians

Congress should approve a physician payment update of 1 percent for fiscal year 2011. As in previous years, the Commission recommends Congress establish a budget-neutral payment adjustment for primary care services billed under the Medicare Physician Fee Schedule (MPFS) and furnished by primary care physicians.

Ambulatory Surgical Centers

Congress should increase payment for ambulatory surgical center (ASC) services in 2011 by 0.6 percent. MedPAC also, once again, recommends implementing cost and quality data reporting requirements concurrent with the update.

Dialysis

Congress should update the composite rate by the projected rate of increase in the end stage renal disease (ESRD) market basket index less the adjustment for productivity growth (a net update of about 0.7 percent).

Hospitals

Congress should increase payment rates for acute hospital Inpatient/Outpatient Prospective Payment Systems (IPPS/OPPS) by the projected increase rate in the hospital market basket index, in addition to quality incentive payments, less Medicare Severity-Diagnosis Related Groups (MS-DRG) conversion adjustments.

Skilled Nursing Facilities

Congress should eliminate the payment rate update to skilled nursing facilities (SNF), and implement other previously recommended payment changes, advises MedPAC in the report.

Hospice

Congress should update hospice 2011 payment rates by the projected increase rate in the hospital market basket index less the Commission’s adjustment for productivity growth (a net update of approximately 1.1 percent). The report also reiterates other March 2009 recommendations.

Home Health

Congress should eliminate the market basket update for 2011 and direct the Health and Human Services (HHS) Secretary to rebase rates for home health services to reflect the average cost of providing care.

MedPAC also recommends Congress direct the Secretary to “expeditiously” modify the home health payment system by including risk corridors and blended payments to prevent lower quality of care in response to rebasing, developing outcomes measures, and implementing safeguards in areas that appear to be high risk for fraud.

MedPac also recommends eliminating payment rate updates for inpatient rehabilitative facilities and long-term care hospitals.

Medicare Advantage

Although the principal focus of the report is the Commission’s recommendations for annual rate adjustments under Medicare’s various FFS payment systems, Medicare Advantage and prescription drug plans (Part D) were not forgotten.

MA plan payments, MedPAC indicates in the report, continue to exceed Medicare FFS outlays. MedPAC projects MA payments per enrollee to be 113 percent of comparable FFS spending for 2010 if physician payment rate cuts take place or 109 percent if they do not.

To contain costs, MedPAC recommends:

  • Congress sets benchmarks that CMS could use to evaluate MA plan bids at 100 percent of the FFS costs.
  • Congress redirects Medicare’s share of savings from bids below the benchmark to a fund that would redistribute the savings back to MA plans based on quality measures.
  • The Secretary calculates clinical measures for the FFS program that would permit CMS to compare it with MA plans.

This news did not bode well with health insurance advocates.

“Significant cuts to the Medicare Advantage program will result in higher premiums, reduced benefits and fewer health care choices for millions of seniors,” said Robert Zirkelback, a spokesman for American Health Insurance Plans. (Reuters)

You can read MedPAC’s full report on their website.

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One Response to “MedPAC Releases March 2010 Report to Congress”

  1. Keith says:

    M.A. plans cost significantly more (to the taxpayer) than the traditional Fee-for-service plan. How is that fair?

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