MedPAC offers tips to improve Medicare payments

While the Medicare program continues to change and evolve, the Medicare Payment Advisory Commission (MedPAC) recommends the following considerations in its annual report to enhance Medicare payment systems:

1. Synchronize Medicare policy across payment models

The three payment methods--fee-for-service, Medicare Advantage and accountable care organizations--have some major inconsistencies. FFS pays for individual services, Medicare pays private plans under MA and the ACO model holds providers accountable for the group's spending.

To synchronize the payment models, MedPAC suggests adjusting spending benchmarks for various factors. For example, beneficiaries in poor health may have higher spending due to their increased need of care. Therefore, payments should reflect spending based on an individual's health status. MedPAC also proposes improving risk adjustment so it's consistent between MA plans and ACOs.

2. Measure quality of care

Currently, FFS relies on clinical process measures to determine the quality of care issued by providers. Oftentimes, there are too many measures and they do not ensure better health outcomes.

To improve quality of care measurements in Medicare, MedPAC suggests using population-based measures to publicly report on quality of care across the three payment methods, all within a local area. MedPAC also is exploring applying overuse measures to Medicare to avoid wasteful spending (Part B spending on electrodiagnostic testing jumped 74 percent from 2002 to 2011, outdistancing overall Medicare spending growth, FierceHealthPayer: Anti-Fraud previously reported).

3. Offer financial assistance for low-income beneficiaries

To ensure low-income individuals can afford out-of-pocket costs, MedPAC recommends altering income eligibility for the Medicare Savings Program. In 2008, the Part B premium subsidy grew to accommodate individuals who received incomes up to 150 percent of the federal poverty level.

In 2012, MedPAC recommended a redesign of the FFS benefit package to protect individuals against out-of-pocket costs, while also creating financial incentives to better maintain cost sharing. This year's report expands on the importance of these suggestions and how they can improve Medicare affordability for low-income beneficiaries.

For more:
- here's the report (.pdf)