Published June 18, 2014

MedPAC Recommendations: New Approach to Quality Measurement, Per-Beneficiary Payments for Primary Care

The Medicare Payment Advisory Commission (MedPAC) is an independent congressional agency established by the Balanced Budget Act of 1997 to advise Congress on issues affecting the Medicare program.  Its 17 Commissioners meet publicly to discuss policy issues and formulate recommendations based on staff research, presentations by policy experts, and comments from interested parties.

Twice each year – in March and June – MedPAC delivers its report to Congress.  Over the years, many recommendations made in these reports have been the basis for significant program initiatives including, for example, EHR meaningful use incentive payments and the Medicare Shared Savings Program.  Thus, each semi-annual MedPAC report offers a glimpse into the future of the Medicare program.

Of the many recommendations in MedPAC’s June 2014 report, there are two in particular that deserve a close study.  First, MedPAC offers a new approach to quality measurement in the Medicare program.  Today, there are dozens of process measures on which providers report (e.g., tobacco use assessment and cessation counseling, vaccinations, cancer and depression screening), all of which focus on detecting underuse of clinically appropriate services.  For the future, MedPAC envisions reporting on a small set of population-based outcome measures to assess the quality of care provided under each of Medicare’s three payment models – fee-for-service (FFS), accountable care organizations (ACOs), and Medicare Advantage (MA) plans – within a local area.  Specifically, MedPAC proposes the following measures:

MedPAC contemplates these population-based outcome measures would be used for public reporting and payment policy for ACOs and MA plans, but acknowledges these measures are ill-suited for FFS Medicare in both regards.  Instead, individual provider quality measures, with all of their shortcomings, would remain the dominant evaluative tool for FFS Medicare providers.  Despite a host of technical challenges, MedPAC concludes the benefits to be realized from population-based outcome measures are well worth the effort involved in developing, deploying, and reporting on these measures.

MedPAC’s second recommendation of note is the development of a per-beneficiary payment for primary care, or PBPC.  Recognizing that the Affordable Care Act’s 10% primary care bonus payment expires at the end of 2015, MedPAC emphasizes the need for a new incentive structure to support primary care.  According to the report, “a per-beneficiary payment could help move away from a fee-for-service, volume-oriented approach toward a beneficiary-centered approach that encourages care coordination, including the non-face-to-face activities that are a critical component of care coordination.”

Unlike reimbursement for transitional and chronic care management, which is limited to services for a specific population, PBPC would cover all Medicare beneficiaries.  MedPAC addresses several design issues relating to PBPC—requirements that practices must meet to receive the payment, mechanisms for attributing beneficiaries, and funding sources—none of which appear to be deal-breakers.  Like population-based outcome measures, PBPC would support providers – as well as beneficiaries – through the transition from volume-based to value-based reimbursement.

For more information about how quality reporting and new payment models will impact your organization, contact David McMillan or Martie Ross at PYA, (800) 270-9629.

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