MedPAC approves recommendations aimed at improving encounter data

MedPAC voted to approve a set of recommendations aimed at boosting the accuracy of Medicare Advantage encounter data. 

The recommendations will be included in the Medicare Payment Advisory Commission’s June report to Congress. The panel suggests a broader set of performance metrics, a payment withhold to push MA plans to comply and, if needed, mandate that noncompliant plans collect data through Medicare Administrative Contractors (MACs). 

The Centers for Medicare & Medicaid Services is looking to draw 50% of its data for MA risk adjustment from encounter data beginning in 2020. Insurers have expressed concern, saying the data are often inaccurate or incomplete

Jennifer Podulka, a senior analyst on MedPAC’s staff, said that though there have been incremental improvements to the quality of encounter data, significant improvement without policy changes is unlikely. 

“The current outlook does not suggest that the pace will pick up without intervention,” Podulka said. 

RELATED: Issues with encounter data hinder Medicare Advantage oversight, OIG says

For example, MedPAC staff reviewed 2015 encounter data, comparing them to independent provider data. For inpatient stays, the encounter data matched the independent data 90% of the time on noting which beneficiaries used such services. However, the dates of the stays only matched 78% of the time. 

Under the draft recommendations, MedPAC suggests the Congress adopt performance metrics that more effectively address the far-reaching issues with accuracy, instead of homing in on specific outlier plans. 

The commission also suggests that a portion of each plan’s monthly payments be withheld to push them to submit more—and more accurate—encounter data. The payers would get back the portion of their withheld funds that’s proportional to the amount and quality of their data. 

The perk of this policy, the commissions’ staff said, is that the amount withheld can be updated to match improvements in the data and could eventually be phased out should it improve to that degree. 

RELATED: MedPAC recommends Congress target rebate traps, biosimilars to bring down drug prices 

Finally, the recommendations suggest greater reliance on contractors, or MACs, to gather encounter data. MedPAC recommends that initially these contractors be made available to all plans that would prefer to use one, and then imposed on individual plans that fail to meet certain data quality thresholds. 

The recommendations also suggest there could be program-wide performance thresholds that, if not met, would force all MA plans use to contractors to gather encounter data. 

This element of the plan drew some concern from the commissioners. Pat Wang, CEO of HealthFirst, called it an “unusual step” and noted that Medicare does not use that approach for providers who fail to submit cost reports. 

“I think it’s a little bit out there in terms of a last hammer,” she said. 

The draft recommendations include a potential rollout timeline, should Congress adopt the policy. Beginning next spring, plans would be notified of the new metrics and withheld payments, with the latter to begin in plan year 2021. 

The earliest a program-wide MAC policy would be implemented is 2024, according to the recommendations. 

MedPAC’s staff estimates that the changes would lead to modest cost savings, saving less than $50 million in the first year and less than $1 billion over five years.