Archive for Medicare


Government More Effective Than Private Sector at Controlling Health Care Costs

For the past dozen years, Medicare and Medicaid have done a better job of controlling rising health care costs than private insurers.

Since 2016, according to a new report from the Urban Institute, private insurers’ costs per enrolled member have risen an average of 4.4 percent a year.  By contrast, Medicare costs have risen an average of 2.4 percent per enrollee and Medicaid costs have risen just 1.6 percent per enrollee.

The primary driver of Medicare cost increases has been prescription drug spending.  For Medicaid the primary driver has been physician services and administrative costs.  For private insurers, the main reason for increasing costs has been spending for hospital care.

Learn more about the differences in cost containment in these different sectors and the implications of those differences in the Urban Institute report “Slow Growth in Medicare and Medicaid Spending Per Enrollee Has Implications for Policy Debates.”

Hospitals Sue Over Site-Neutral Outpatient Payment Policy

Nearly 40 hospitals have filed a joint lawsuit in opposition to the Centers for Medicare & Medicaid Services’ site-neutral payment policy for Medicare-covered outpatient services.

In the suit, the hospitals charge the federal government with overstepping its authority in implementing such a change through regulation in the face of past congressional action to limit the use of site-neutral payments.

Under its site-neutral payment policy, Medicare pays the same for some outpatient services regardless of where those services are provided.  Under Medicare’s previous policy, Medicare paid more for services provided in hospital-run outpatient facilities.

Hospitals argue that their outpatient facilities are more resource-intensive than ordinary doctors’ offices and that larger payments are justified.  CMS maintains that its site-neutral payment policies will save Medicare beneficiaries $150 million through reduced co-payments and increase competition among providers.

Learn more about the lawsuit, the issue, and the arguments for and against site-neutral Medicare outpatients payments in the Fierce Healthcare article “38 hospitals sue HHS over site-neutral payment policy.”…

Hospitals Flee Downside Risk in Medicare Bundled Programs

More than half of the hospitals that voluntary participate in Medicare bundled payment model programs leave those programs when faced with the possibility of financial penalties based on their performance.

So concludes a new report by the U.S. Government Accountability Office.

Some of these models feature both “upside” and “downside” risk.  Upside risk offers financial incentives to participants that keep their costs below targeted amounts; they share those savings with Medicare.  Downside risk occurs when hospitals are penalized when their costs exceed agreed-upon targets.  Some of the model programs begin with only upside risk and later move into both upside and downside risks, but when the downside risk begins, the GAO found, more than half choose to leave the voluntary programs rather than incur downside risk.

Some observers believe this behavior speaks to the need to require participation in the models rather than make participation voluntary.

Learn more about the GAO’s look at the behavior of hospitals that participate in Medicare bundled payment programs in its report “Medicare: Voluntary and Mandatory Episode-Based Payment Models and Their Participants.”


MedPAC: Overhaul Medicare Quality Programs

Medicare would implement major changes in its hospital quality programs under a proposal approved by the Medicare Payment Advisory Commission.

Fierce Healthcare reports that the proposal adopted by MedPAC for recommendation to Congress and the Centers for Medicare & Medicaid Services

…would essentially lump together several existing programs that measure quality—the Hospital Readmissions Reduction Program, the Hospital Value-Based Purchasing Program and the Hospital-Acquired Condition Reduction Program—into the Hospital Value Incentive Program (HVIP). 

It would also eliminate the existing Inpatient Quality Reporting Program.

Under the MedPAC proposal,

Performance across five domains—readmissions, mortality, spending, patient experience and hospital-acquired conditions—would be converted to HVIP “points.” Those points would be used to distribute the pool of funds instead of penalizing hospitals as the current system does. 

MedPAC estimates that hospitals might experience a 3.3 percent net increase in Medicare payments under its proposal; the current, multi-program approach would yield as much as a 2.8 percent increase.

MedPAC will encourage Congress and CMS to act quickly and implement its proposal in 2020.

MedPAC is an independent congressional agency that advises Congress on issues involving the Medicare program.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their …

MedPAC Meets

Last week the Medicare Payment Advisory Commission met in Washington, D.C. to discuss a number of Medicare payment issues.

The issues on MedPAC’s December agenda were:

  • The Medicare prescription drug program (Part D)
  • Opioids and alternatives in hospital settings: payments, incentives, and Medicare data
  • Hospital inpatient and outpatient services payments
  • Redesigning Medicare’s hospital quality incentive programs
  • Physicians and other health professional services payments
  • Medicare payment policies for advanced practice registered nurses and physician assistants
  • Ambulatory surgical centers and hospice payments
  • Skilled nursing facilities, home health agency, and inpatient rehabilitation facilities payments
  • Long-term care hospital services payments
  • Outpatient dialysis payments
  • Future policy directions to address Medicare prescription drug spending
  • Analysis of Medicare Shared Savings Program (MSSP) performance

MedPAC is an independent congressional agency that advises Congress on issues involving the Medicare program.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy.

Go here for links to the policy briefs and presentations that supported MedPAC’s discussion of these issues.…