ADVI Analysis: MedPAC Meeting April 2023

The Medicare Payment Advisory Commission (MedPAC) held its latest meeting on April 13-14, 2023 (link). The following relevant topics were discussed. 

• Addressing the high prices of drugs covered under Medicare Part B 
• Aligning fee-for-service payment rates across ambulatory settings 
• Mandated report: Evaluation of a prototype design for a post-acute care prospective payment system 
• Assessing postsale rebates for prescription drugs in Medicare Part D
• Assessing the need for Medicare safety net payments for skilled nursing facilities and home health agencies 
• Mandated report: Telehealth in Medicare 

ADVI Angle

The following are key takeaways from the April meeting:

• Addressing the high prices of drugs covered under Medicare Part B
  • MedPAC staff reviewed the package of Part B policies and draft recommendations to address (1) high prices and uncertain clinical evidence for Part B accelerated approval drugs, (2) lack of price competition for drugs with similar health effects, and (3) financial incentives associated with the percentage add-on to Medicare Part B’s payment rate. 
  • Commissioners voted unanimously yes on all three draft recommendations. This will be included in the June 2023 report.
• Aligning fee-for-service payment rates across ambulatory settings 
  • MedPAC staff presented the issue of payment rate variation for ambulatory services in different settings and how it increases Medicare spending. Some services can be safely provided in multiple settings, and payment rates should be aligned to match the lowest cost setting without affecting access to care. The recommendation is to align payment rates for select services across the three ambulatory settings, and the commissioners will review and vote on it.
  • All Commissioners voted in support of the draft recommendation.
• Mandated report: Evaluation of a prototype design for a post-acute care prospective system 
  • MedPAC staff presented the Congress required that the Commission and the Secretary of HHS to develop prototypes for a unified PAC payment system that set payments based on characteristics rather than setting for all PAC providers. Commissioners have reviewed findings showing a PAC PPS is feasible, and considered the policies that should accompany it.
  • All Commissioners voted in support of the draft recommendation.
• Assessing post sale rebates for prescription drugs in Medicare Part D
  • MedPAC staff reviewed and discussed findings from an ongoing analysis of the “Direct or Indirect Renumeration” DIR data. These findings will serve as a baseline for comparison as the Inflation Reduction Act (IRA) mandated challenges are implemented. 
  • A draft recommendation was not presented in this session.
• Assessing the need for Medicare safety net payments for skilled nursing facilities and home health agencies 
  • MedPAC staff reviewed the Commission’s approach to identify and support safety-net providers that serve low-income Medicare beneficiaries. This continues the application of the safety net framework that was applied in the June 2022 Report to Congress.  
  • A draft recommendation was not presented in this session. 
• Mandated report: Telehealth in Medicare
  • MedPAC staff presented the expansion of Medicare’s coverage of telehealth services during the COVID-19 pandemic and the requirement for the Commission to submit a report on the impact of this expansion on access, quality, and payment policy by June 2023. The Commission previously presented a policy option for the Congress and CMS to temporarily continue some of the telehealth expansions to gather more evidence of their impact. The Commission has continued to assess the use of telehealth services during the pandemic and discuss alternative approaches for payment.

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