WASHINGTON -- In its , the Medicare Payment Advisory Commission (MedPAC) explored giving the barely begun Quality Payment Program (QPP) a makeover, suggested a new market mechanism to tame the rising costs of certain specialty drugs and recommended that Congress jumpstart its timeline on equalizing payments across sites in the post-acute care space.
MedPAC, a nonpartisan body of health policy experts and providers charged with advising Congress on Medicare payment and policy matters, issues two reports each year.
The Commission has been highly critical of the Centers for Medicare and Medicaid Services (CMS) Quality Payment Program, the new way of paying physicians and certain other clinicians, which replaces the deeply unpopular Sustainable Growth Rate system.
Physician Payment
This latest report continues on that theme, saying that "as presently designed, [the Merit-based Incentive Payment System (MIPS)] is unlikely to help beneficiaries choose clinicians, help clinicians change practice patterns to improve value, or help the Medicare program reward clinicians based on value."
Of the two available pathways under the new QPP system, MIPS is the default. It scores physicians on four core categories: quality, cost, advanced care information, and improvement activities.
The report continues: "Although MIPS will mechanically identify clinicians as being high or low 'value,' that distinction may not reflect any true differences among clinicians."
The second pathway is the advanced alternative payment model track. This is arguably a more challenging pathway that requires physician practices to assume some risk based on patient outcomes, and may provide more rewards, including a 5% incentive payment.
Regarding MIPS, the chapter explored a potential substitute involving a "quality withhold," reducing payments by a certain percentage and then releasing that money to providers if pre-defined requirements are met. This new model spikes the broad bucket of measures providers are allowed to choose from and replaces it with population outcome measures, including:
- potentially preventable admissions and emergency department visits
- mortality and readmission rates
- patient experience
- healthy days at home
- rates of low value care
- relative resource use
The measures would free clinicians of "burdensome" reporting requirements, as they could be pulled from claims data and surveys, noted the report.
Also, since these are population measures, individual assessment would cease. Clinicians would need to either join a "virtual group" -- a way for a solo provider or small practice to link up with other providers (this idea has yet to be defined through regulation) -- or join an advanced alternative payment model (A-APM), or choose not to be assessed at all, the report suggested.
Those who choose not to be measured would lose the withheld monies. Those who join A-APMs would get their withhold back. Those in the other two groups would receive a portion or all of the withheld dollars depending on the group's performance. High performers could also receive a quality bonus greater than the withheld amount.
The report also looks at ways to encourage more clinicians to leave the MIPs program and enter into A-APMS.
In the current program, a clinician must receive 25-50% of payments through an A-APM in order to receive a 5% bonus each year, and that 5% payment is tied to a clinician's total payment.
The Commission also discussed replacing the current "payment cliff" of 25% -- where a practice receiving 24.9% of payments would be ineligible for the 5% bonus -- with a policy where practices in A-APMS receive a bonus "proportional to the A-APM generated revenue."
The report noted that such a change would erase the payment cliff and "increase certainty for clinicians that their work through an A-APM entity would be rewarded."
On a phone call Wednesday, Mark Miller, PhD, executive director of MedPAC, stressed that this chapter should be viewed as a "discussion document" and not a firm recommendation.
Medicare Part B
In addition, the Commission recommended strategies it believes will improve the Medicare Part B drug program.
In 2015, the Medicare Part B program spent $26 billion on Part B drugs -- drugs administered by physicians in their office or in a hospital outpatient setting (e.g., infusion drugs for cancer or rheumatoid arthritis). Part B drug costs are increasing by about 9% annually, said Miller.
Eight of the 10 products accounting for the greatest portion of the Medicare Part B spend cost from $10,000 to $30,000 per beneficiary per year, the report noted. This is a problem not only for the program but also for Medicare beneficiaries, who shoulder roughly 20% of such payments, Miller noted.
Concerned with these rising costs and what the Commission sees as a scarcity of competition, the report recommended several payment adjustments:
- Give the Health and Human Services Secretary the power to fine manufacturers who don't report their sales data for the purpose of calculating average sales price (ASP)
- Reduce payment rates for drugs currently reimbursed at 106% of wholesale acquisition cost (WAC) when ASP data isn't accessible to 103% of WAC to "reduce excessive payments"
- Introduce an ASP inflation rebate policy to safeguard against drastic price hikes from drug companies for individual products
- Develop a common billing code for reference biologics and biosimilars to spur competition between products within the ASP payment system
The way the ASP inflation rebate mechanism would function, explained Miller, is that if drug prices were to exceed an inflator (e.g. Consumer Price Index [CPI]), then the manufacturer would have to refund a payment equal to the difference between the CPI growth rate and the actual growth rate for the drug costs.
For a longer-term fix, the Commission recommended a "Drug Value Program," characterized as a "voluntary, market-based alternative" to the current ASP payment system. In this program, a cluster of providers would join together, working alongside pharmaceutical benefit managers to negotiate the price of Part B drugs. Those providers who manage to obtain a price below the ASP can share in savings, Miller explained.
Additional Discussions
In addition to examining clinician payment and overhauling the Part B drug system, the Commission also discussed:
- Unifying the payment system for services across different Post-Acute Care settings (skilled nursing facilities, home health agencies, inpatient rehabilitation facilities, and long-term care hospitals) with a goal of "paying on the basis of patient need rather than where the patient ends up," said Miller. The commission recommended beginning to put a new Post-Acute Care preferred payment system in place by 2021 -- accelerating the timeline of the . The commission also recommended a 5% reduction in payments if Congress has not enacted other payment reduction strategies
- Using a premium support model to make the Medicare payments more predictable and sustainable (the report emphasized that this was not a firm recommendation but rather a discussion)
- Potentially linking payment at the growing number of stand-alone emergency departments with patient acuity
- The benefits and risks of provider and insurer consolidation within the healthcare industry. One way the commission continues to encourage curbing increased costs (without an associated increase in quality) tied to provider consolidation has been to implement site-neutral pricing. Here the Commission also explores "synchronizing payment rates" among Accountable Care Organizations, Medicare Advantage plans, and traditional Fee for Service Medicare
In addition, the Commission also discussed expanding the Open Payments database, which reports to CMS the payments from drug and device manufacturers to physician and teaching hospitals, to also include other clinicians.
The report reminds Congress that in its original recommendation it asked to include physician assistants and nurse practitioners, Miller said.
While the chapter does not include a "hard" voted-on recommendation, "the net should be cast broader than it currently is," and physician-owned distributorships "should also be identified and reported."