According to the report, had CMS aligned payment across settings according to MedPACs recommendations, it would have saved $6.6 billion in 2019 and reduced Medicare beneficiary out of pocket expenditures by $1.7 billion.

Streamlining Medicare’s APMs
The Commission recommends that the Centers for Medicare and Medicaid Services (CMS) reduce the number of Medicare alternative payment models (APMs), particularly population-based accountable care organization (ACO) type concepts. As an example, MedPAC recommends that the current seven track Medicare Shared Savings Program be reduced to a smaller number of tracks that are targeted toward provider groups of different sizes and involve different levels of risk. The report recognizes that ACOs are not necessarily appropriate for distinct specialty services. MedPAC recommends that CMS implement a national episode-based payment model for certain clinical episodes to improve savings and/or outcomes related to services that encompass a distinct period of time, such as cancer care. Additionally, MedPAC believes some providers should be required to participate in this national episode-based payment model for all their fee-for-service Medicare patients. The goal of these recommendations is to reduce the complexity and uncertainty around deciding to participate in an APM and increase participation in these models.

Recommendations for Reducing Medicare Part B Drug Expenditures
The June MedPAC report also acknowledged the challenges associated with growing Part B drug expenditures, particularly for cancer treatment. According to the report, between 2009 and 2019 Part B drug expenditures grew 10% on average every year. While acknowledging that Medicare has a limited ability to influence how Part B drugs are priced, MedPAC did offer three pathways that require Congressional action to address the exponential growth in drug prices.

The recommendations include giving CMS the authority to use coverage with evidence development or CED to collect clinical evidence relevant to Medicare beneficiary use of first-in-class new drugs, which are usually introduced with high launch prices. It was also recommended that payment caps be established that are tied to the new drug’s estimated clinical impact. A second recommendation involved use of internal reference pricing or consolidated billing to establish a single reference price for drugs that have similar health effects. According to the report, this would create market competition and encourage manufacturers to lower their prices to expand market share. A final recommendation involved revising the existing Average Sales Price + 6% Part B drug payment formula by fixing all or a portion of the add on payment; i.e., replacing the 6% add on with a set rate or combing a set rate with a percentage less than 6%.

Final Report on Vulnerable Medicare Beneficiaries’ Access to Care
The June Report contains MedPAC’s final report in response to the July 2020 request from the House Ways and Means Committee for an update on rural beneficiaries’ access to care and for information on access to care for those who live in a medically underserved area (MUA), are dually eligible for Medicare and Medicaid, or have multiple chronic conditions.

Their report used data from before the COVID-19 pandemic, and they found that those who live in MUAs generally received the same volume of services as those who did not live in an MUA (they looked at E&M encounters, hospital inpatient and outpatient visits, skilled nursing facility days and home health episodes). Additionally, Medicare beneficiaries who are eligible for full Medicaid benefits had substantially higher service use, but they note that they could not rule out the possibility that these dual-eligible patients needed more care than they received or faced difficulties in accessing it. Finally, those with chronic conditions had substantially higher service use. They note that additional research is needed and that they are looking into how to better identify vulnerable Medicare populations.

As the push for Medicare payment reform moves forward, it is important to keep in mind that the contents of the MedPAC report are, at this time, just recommendations. However, the report is influential with members of Congress and can provide some insight into where the debate will head. Meanwhile, ASTRO continues to advocate with legislators and regulators for meaningful reforms to the Fee Schedule.