Medicare's fee-for-service benefit design should be changed to provide better protection against high out-of-pocket cost sharing and to create incentives to encourage beneficiaries to make better healthcare decisions, the Medicare Payment Advisory Commission (MedPAC) said in its latest annual report on Medicare and the healthcare delivery system. The report was released on Friday.
"The design of the FFS Medicare benefit package…has remained essentially unchanged since the creation of the program in 1965," the commission said in its executive summary. "Over the years, Medicare FFS prices and the amount of services beneficiaries receive have grown dramatically; as a result, some beneficiaries many now incur a very large cost-sharing liability."
The nonpartisan MedPAC is charged with advising Congress on Medicare payment policy issues, including reimbursements to physicians, hospitals, labs and imaging centers. The focus on beneficiaries is a shift for the commission and reflects its position that "how beneficiaries view the Medicare program and how they make decisions about their health care are vital to the program's success."
The report makes recommendations in three benefit areas: benefit design, care coordination in FFS Medicare, and care coordination for dual eligibles.