MedPAC Offers 7 Ways to Adjust Medicare Payments

Cheryl Clark, June 17, 2014

The Medicare Payment Advisory Commission identifies in its June report seven areas it believes are in need of policy change in order to "provide sufficient payment for efficient providers."

How should Medicare fix Medicare?

Options for improving the federal risk adjustment formula to account for variations in patient severity and how patient medication adherence impacts federal healthcare spending are two of seven issues highlighted in the latest report from the Medicare Payment Advisory Commission.

MedPAC, an independent Congressional agency, is mandated by Congress to report on payment issues and make recommendations, and does so twice a year, with reports published in March and June. It issues these reports to air problems and discuss possible solutions or avenues of approach and whether they would accomplish the intended result.

In the latest report, released Friday, MedPAC identified seven areas in need of policy change in order to fairly adjust provider reimbursement:

1. Synchronizing Medicare policy across payment models

Medicare's three payment models—fee-for-service (FFS), Medicare Advantage (MA), and the accountable care organization (ACO)—each have inconsistent payment rules and incentives that warrant synchronization.

The commission also wants to involve the beneficiary in the equation. "We also need to consider what the payment models look like from the beneficiary's perspective," given the complexity of choosing between fee for service plans and MA plans.

"The commission recognizes that Medicare should make beneficiaries' decision making simpler and easier," MedPAC said. "Consistent presentation of information across channels may create choices that are easier to compare and could mitigate some of the costs in decision making."


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