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MedPAC Suggestions

The Congress established Medicare Payment Advisory Commission (MedPAC) as a self-governing agency for advices on Medical reimbursement policy issues. Doing its part, MedPAC sent a report to Congress last month, highlighting the issues involving Medicare program along with some suggestions to improve health care services delivery and the market.

The June report contains a chapter dedicated to the recently proposed clinician payment systems in Medicare by MACRA. The proposed systems, Merit-based Incentive Payment System (MIPS) and Alternative Payment Model (APM), are created by MACRA to divert Medicare reimbursement towards value and quality based healthcare service from the volume-based fee for service (FFS) structure.

MedPAC believes that Medicare payment shouldn’t be stated by the status of provider as MIPS or APMs, but instead by the value of service offered to beneficiary. The report by MedPAC discusses about the drawbacks of the MIPS program to analyze clinician performance via process measures in contrast to outcomes measures, and finds mistakes in some outcome measures as well.

According to the report, the process measures that are completely within clinician’s control, though useful, are often considered as poor indicants of a patient’s health outcomes. Furthermore, the clinician-reported process measure obstructs the capability to distinguish between different providers’ performance.

According to MedPAC, outcome measures will have a stronger impact on physician’s improvement when compared to the process measures. However, the report also says that the outcome measures are statically unreliable and they should be risk adjusted for proper analyzing.

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MACRA Implementation

The key recommendation in the report regarding MIPS revolves around improvement in quality measure set, and eliminating measure with collection burdens outweighing their benefits. The report also calls for more focus on improving quality programs value, and suggests CMS to increase the use of claims data instead of quality reporting to simplify MIPS administration. MedPAC further recommends CMS to consider providing a better change between APMs and MIPS as clinicians move between them.

With regards to APM, the MedPAC report suggests that the incentives for clinicians should only be given if they are successful in improving quality, controlling cost, or both, in the participated alternative payment entity. At present, healthcare providers receive 5% incentive payment, regardless of their performance within APM.

The report further recommends that the eligible alternative payment entity must be at risk financially, for Medicare Part A and B spending. This would make the APMs answerable for the patient outcomes and total spending, and the program will move from being volume based to value-based. MedPAC also believes that that will encourage better care coordination and health care delivery.