MedPAC considers one-time funding boosts for Medicare in 2023 due to COVID-19 confusion

A key Medicare advisory panel is debating one-time funding boosts to providers for 2023 due to questions on how COVID-19 has permanently impacted the healthcare industry.

The Medicare Payment Advisory Commission (MedPAC), which gives Congress advice on Medicare payment issues, discussed during its Thursday meeting how the pandemic will affect payment adequacy in 2023. But members of the panel were concerned about what the healthcare industry will look like that far out, especially for providers.

“Maybe six months ago we might have thought for 2023 we can just assume that things are not back to normal but that covid won’t be a major influence, except to the degree that telehealth may become permanent,” said Paul Ginsburg, Ph.D., a commission member and Brookings Institute fellow. “But I keep thinking that we know so little, and the experience in 2020 and 2021 is not helpful in understanding what a more normal situation may be like in 2023.”

Ginsburg suggested that the commission look at one-time and temporary changes to Medicare payment rates, “because the pandemic’s effects have really been profound.”

Normally, MedPAC makes recommendations to Congress for baseline payment updates to Medicare. But the pandemic may affect indicators of payment adequacy for not just 2020 but also 2021 due to its impact on healthcare utilization, increased costs for providers and other indicators.

“We did witness the collapse of the supply chain and the collapse of our workforce,” said Brian DeBusk, Ph.D., a commission member and CEO of DeRoyal Industries. “I think there are some real lessons learned here.”

One of the suggestions was for a one-time payment increase for rural providers that have been hit hardest by the pandemic.

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Congress created a $178 billion relief fund to help providers plug any revenue shortfalls caused by postponing elective procedures and dealing with massive drops in outpatient care. The COVID-19 Public Health Emergency also offered major regulatory flexibilities for providers, including removing reimbursement barriers for telehealth.

MedPAC will look at healthcare use data from 2020 to help determine payment adequacy, but members were skeptical about what they can glean from data in 2020 and 2021 since the drops in care were temporary.

“I think it is extremely challenging to look at the data and tease out what is permanent, what is dynamic and what is temporary,” said member Amol Navathe, Ph.D., co-director of the Healthcare Transformation Institute at the University of Pennsylvania’s School of Medicine.