MedPAC and MACPAC Release June Reports to Congress

The Medicare Payment Advisory Commission(MedPAC) has released its June 2023 report to the Congress on Medicare and the Health Care Delivery System. The report covers a number of different issues, including the following topics:

• Aligning Payments Across Sites of Service. In an important update, the report includes a recommendation that Congress more closely align Medicare payment rates for selected services provided across different ambulatory settings, including Hospital Outpatient Departments (HOPDs) and Ambulatory Surgery Centers (ASCs). Specifically, the MedPAC recommendation states,  
  
  The Congress should more closely align payment rates across ambulatory settings for selected services that are safe and appropriate to provide in all settings and when doing so does not pose a risk to access. 
  
  In discussing how to operationalize such a policy, the Commission report continues,  
  
  If freestanding offices had the highest volume for a service, it would arguably be safe to provide that service in freestanding offices for most beneficiaries. Therefore, our model aligns the payment rates in the outpatient prospective payment system (OPPS) (the payment system for most services provided in HOPDs) and the ASC payment system with the payment rates from the fee schedule for physicians and other health professionals, also known as the physician fee schedule (PFS).  
  
  If ASCs had the highest volume for a service, we aligned the OPPS payment rate with the ASC payment rate and left the PFS payment rate unchanged. 
  
  If HOPDs had the highest volume for a service, we determined that it likely was not safe to provide that service outside the HOPD setting for a majority of beneficiaries. Moreover, for these services, aligning OPPS payment rates with those from a lower-cost setting could adversely affect beneficiaries'access to those services. Hence, for these services, we left the payment rates unchanged 
  
  The full chapter is available for review here.
• Telehealth. In a congressionally mandated chapter on telehealth in Medicare, MedPAC presents data on the use of telehealth services during the COVID-19 public health emergency and an analysis of the relationship between expanded telehealth coverage and quality, access, and costs.
• Medicare Advantage Benchmarks. Also in the report, the Commission discusses the effects of favorable selection on payments to Medicare Advantage (MA) plans and alternative approaches to setting MA benchmarks that would be less reliant on fee-for-service spending than the current system is.
• Reducing Health Disparities. The report also includes an analysis of outcome measures for Medicare beneficiaries stratified by race/ethnicity and low-income status, with a discussion of approaches to account for differences in patients' social risk factors and to encourage providers to focus on reducing health disparities.

On June 15th, the Medicaid and CHIP Payment and Access Commission (MACPAC) also released its June 2023 report. The MACPAC report includes a chapter on payment policy for safety net hospitals, recommending the creation of automatic adjustments to disproportionate share hospital (DSH) payments.

The Commission recommends that this new system should (1) improve the relationship between total DSH funding and measures of need for DSH payments, (2) change the basis of DSH allotments from federal funding to total funding, (3) include DSH allotments in a countercyclical financing mechanism for Medicaid to preserve DSH funding when there is an economic recession, and (4) remove the requirement for CMS to compare DSH allotments to Medicaid spending so that allotments can be finalized in a timelier manner.