Medicare Payment Advisory Commission Launches Meeting Cycle with Full Docket

Remy Kerr, MPH, AMRPA Health Policy and Research Manager

The Medicare Payment Advisory Commission (MedPAC) began their 2020 – 2021 meeting cycle virtually in September, and focused primarily on the impact of COVID-19 on the Medicare program, the ongoing transition to value-based care, rural health care issues and telehealth expansion. It is likely that discussion of these issues will continue throughout the remainder of the meeting cycle. In addition, a discussion of payment update recommendations will be included in the December meeting. The following highlights are from the September, October and November MedPAC meetings.

September – The Coronavirus Pandemic and Medicare, Context for Medicare Payment Policy and Expansion of Telehealth in Medicare MedPAC initiated their 2020 – 2021 meeting cycle on Sept. 3 by addressing the profound effect the COVID-19 public health emergency (PHE) has on the Medicare program, Medicare insolvency projections, and permanent expansion of telehealth in Medicare.

The Coronavirus Pandemic and Medicare session addressed the impact of COVID-19 on Medicare from beneficiary and provider standpoints. MedPAC reported that 80% of COVID-19 deaths are among ages 65 and older, with 40% among nursing home and assisted living residents. COVID-19 impacts beneficiary access to care and utilization, with many delaying or foregoing care due to fear of infection or because of temporary provider closures. The overall effect on patient outcomes is yet unknown. For provider impact, MedPAC shared an overview of: (1) volume changes during Q2 2020 for acute and post-acute care providers; (2) acute hospital margins and the impact of PHErelated policy changes; and (3) CARES Act funding distributions, based on an unnamed sample of non- and for-profit acute care hospital systems. Much discussion focused on the need for greater data on disbursement of relief funds in COVID-19 impacted areas. Commissioners expressed specific concerns with how Medicare funds are dispersed, and with the number of COVID-19 Medicare patients who receive treatment at funded hospitals. There was agreement that the impact of COVID-19 on utilization and margins across settings be considered when making future payment update recommendations.

The Context for Medicare Payment Policy session focused on the outlook for the Medicare Trust Fund and recommendations to prevent insolvency. Estimates show Medicare spending doubling within the next decade, with the Hospital Insurance Trust Fund (Part A) projected to be insolvent by 2026. However, the Congressional Budget Office projects that Part A will be insolvent by 2024 due to COVID-19. MedPAC provided data related to Medicare Advantage (Part C), and reported that spending per beneficiary in Medicare Advantage is growing faster than original Medicare or

Medicare Part D. To address shortfalls, MedPAC recommended a 0.8% increase in payroll tax, or decrease Part A spending through a decrease of $1,000 per beneficiary per year, which Commission Chair Michael Chernew cautioned might exceed MedPAC’s scope. During the discussion, commissioners suggested that bold action is required to solve the Medicare program financial crisis. They also expressed interest in examining the impact of disparities on spending in the Medicare program and evaluating how beneficiary health status influences spending.

The Expansion of Telehealth in Medicare session covered temporary telehealth policy changes granted due to the pandemic, and recommendations for permanent implementation of the changes at the conclusion of the PHE. MedPAC recommended maintaining many of the temporary telehealth flexibilities within the advanced Alternative Payment Model (A-APM) program, and also recommended that expanded fee-for-service (FFS) telehealth would need several safeguards against potential fraud, waste and abuse. Additionally, MedPAC proposed that reimbursement for telehealth services should not remain at the same level as in-person visits at the conclusion of the PHE, and that all telehealth services continue to meet HIPAA requirements (penalties for HIPAA compliance have been waived during the PHE). Many commissioners supported expanding telehealth services related to mental health in the FFS space, with several supporting telehealth for chronic disease management. To manage fraud, waste and abuse concerns, commissioners suggested that protections present for in-person services be utilized for telehealth, and that standard cost sharing rules in place prior to the PHE be continued after (clinicians are permitted to waive cost sharing during the PHE). Some commissioners also asserted that certain services, such as those for durable medical equipment, require in-person visits.

October – The Evolution of Medicare’s Advanced Alternative Payment Models The October 2 MedPAC meeting focused on the Advanced Alternative Payment Model (A-APM) program. MedPAC asserted that A-APMs have not yielded the desired results since their development, based upon testing by the Center for Medicare and Medicaid Innovation, and that even the most successful programs provide only modest savings for the Medicare program. MedPAC recommended areas for improvement, including: strengthening financial incentives for providers through increased shared savings/loss percentages, lowering or slowing growth benchmarks, limiting risk score influence and increasing episode target prices and withholds. It also recommended that more models have mandatory participation and provide beneficiaries with information on “high-value” providers, and acknowledged the need for improved evaluation of payment models.

In the discussion, Commissioners recognized that the A-APM topic is wide-ranging and will likely take place over many meeting cycles. However, there were areas of consensus, including the number of models with significant overlap. Many suggested that a smaller number of models would improve testing capabilities. Commissioners also raised concerns that overlap between models could create conflicting incentives, that social determinants of health disparities be a major focus of A-APMs, and that A-APM benchmarks align with Medicare Advantage. There was agreement for increased mandatory participation in models, and that model durations should be longer.

November – Expansion of Telehealth in Medicare and Congressional Request: Medicare Beneficiaries’ Access to Care in Rural Areas (Interim Report) MedPAC’s public meeting on November 9-10 covered permanent telehealth expansion within Medicare and rural health care access issues. It was the second MedPAC session on telehealth this year, and the issue will likely be addressed in subsequent meetings. The session on rural health care was requested by the House of Representatives Ways and Means Committee to update MedPAC’s 2012 report on the issue. An interim report is due in June 2021 with a final report due by June 2022.

In the telehealth-focused session, there was substantial dialogue on areas of telehealth expansion, particularly audioonly services (building on the September meeting discussion). Commissioners suggested that continuing reimbursements for audio-only services creates opportunities for significant abuse and overutilization. Others urged that audio-only telehealth services reimbursements continue after the conclusion of the PHE to prevent disparities, and to ensure that beneficiaries without broadband internet access or video-capable devices continue receiving telehealth services. There was additional discussion of whether “high-touch services” continue to be reimbursed after the PHE, with some supporting the proposal and others opposed. During a focus group on the issue, participants expressed concerns that in telehealth therapy, a patient could sustain a fall and a therapist would be unable to assist. However, one commissioner asserted that telehealth therapy could improve access for beneficiaries in need of highly specialized care. Lastly, the role cost sharing in telehealth services was discussed, and if “incident to” billing should be prohibited in certain circumstances. It was cautioned that cost sharing could become burdensome for providers, and that if cost sharing were implemented the amount would need to balance, not reduce, access for beneficiaries and not create burdens for providers.

The Access to Care in Rural Areas session centered on recommendations for data to include in the interim report due to Congress in June 2021. MedPAC compared 2010 data to 2018 data in evaluating clinician service use between rural and urban beneficiaries. In its determination, MedPAC used Evaluation and Management (E/M) encounter data from the Physician Fee Schedule, rural health clinics, federally qualified health centers (FQHC) and critical access hospitals. In both 2010 and 2018, urban beneficiaries had more E/M encounters with clinicians than did rural beneficiaries. 2018 data suggests that fewer rural E/M encounters are the result of fewer encounters with specialists. According to MedPAC, a greater number of rural beneficiaries are dependent upon hospitals to receive health care services (between 2010 and 2018), than are urban beneficiaries. MedPAC stressed that this increasing dependence is occurring due to an increase in rural hospital closures.

To address these concerns, MedPAC recommended implementing global budgets or increasing stand-alone emergency departments and FQHCs. Commissioners generally

supported further consideration of global budgets, and expressed concern that MedPAC’s data was not risk-adjusted despite known differences in health status between urban and rural beneficiaries that impact utilization. Commissioners stated that ongoing workforce challenges need to be addressed in any recommendations related to rural health care access. Of particular interest to AMRPA, Commissioner David Grabowski urged exploration of rural access issues related to post-acute care (PAC), specifically mentioning that skilled nursing facilities have faced closures and that such closures may be further exacerbated by the PHE.

All presentation slides and transcripts from the aforementioned meetings can be found here. Looking ahead, AMRPA expects COVID-19 and associated impacts will continue to be a major point of discussion for MedPAC, and will telehealth expansion and Medicare’s impending insolvency. MedPAC’s next public meeting is scheduled for December 3 and 4, when the Commission will discuss payment update recommendations, including those for IRFs. AMPRA will continue to update its members on relevant updates through the AMRPA Access blog, and its weekly newsletter, Off the Record. Additionally, full MedPAC memorandums summarizing monthly meetings are now available to AMRPA members here.

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