The Medicare Payment Advisory Commission in its June report to Congress today outlined options for bringing Medicare Advantage payment levels more in line with those of traditional Medicare fee-for-service expenditures.
The current Medicare Advantage payment system doesnt promote efficiency mainly because inflated, administratively set county benchmarks, the basis of payment for Medicare Advantage plans, exceed fee-for-service levels, according to a report summary. Several approaches could be used to remedy this, such as freezing all county benchmarks rates at their current levels until each countys rate is at the fee-for-service level, or using a blend of fee-for-service and Medicare Advantage rates that would apply to a particular county, increasing the weight of the fee-for-service portion over time, MedPAC stated. Congress could freeze the benchmarks until traditional fee-for-service catches up to that level.
At a news conference, MedPAC Executive Director Mark Miller and other MedPAC officials acknowledged that changes may lead to fewer Medicare Advantage plans and fewer benefits under the plans.
The June report made several other recommendations to improve payment accuracy, such as repealing the current hospital wage index system and giving HHS authority to establish a hospital compensation index that would represent all employers and industry-specific occupational weights and adjust for geographic differences in the ratio of wages to benefits. -- by Jennifer Lubell