MedPAC urges changes for beneficiaries

Centered primarily on the role of the beneficiary, the Medicare Payment Advisory Commission's latest report to Congress (PDF) recommends the HHS secretary develop a Medicare fee-for-service benefit design that includes a host of changes including an out-of-pocket maximum, deductibles for Parts A and B and an additional charge on supplemental insurance.

The 259-page report includes six separate chapters, three of which focus primarily on the Medicare beneficiary: one is devoted to benefit design, another on care coordination in fee-for-service Medicare, and a third on care- coordination programs for dual-eligible beneficiaries. The other chapters address issues related to risk adjustment for Medicare Advantage, serving rural beneficiaries, and coverage and payment for home infusion therapy.

According to the report, the Medicare benefit package has remained mostly unchanged since the program was established in 1965, and the MedPAC commissioners suggest ways to give beneficiaries better protection against out-of-pocket spending. They also recommend that in changing the current benefit design, HHS should replace coinsurance with copayments that may vary by type of service or provider, and give authority to the HHS secretary to eliminate cost-sharing based on the evidence of the value of services—including cost-sharing after the beneficiary has reach the out-of-pocket maximum.

For beneficiaries receiving both Medicare and Medicaid—known as “dual eligibles”—this latest report examines and makes recommendations to programs that are intended to integrate care in the two programs: the Program of All-Inclusive Care for the Elderly, or PACE, and dual-eligible special needs plans. For instance, the MedPAC commissioners suggest that Congress direct the HHS secretary to adjust the Medicare Advantage risk-adjustment system to better predict across all MA enrollees, which they say would make payments reflect the costs of the population PACE programs enroll more appropriately.

Mark Miller, MedPAC's executive director, discussed the report at a news briefing Friday and talked about the chapter related to rural beneficiaries. Under the 2010 Patient Protection and Affordable Care Act, Congress mandated that MedPAC report on rural Medicare beneficiaries' access to care, the quality of that care, and the adequacy of payments.

The report showed that beneficiaries in rural and urban areas receive similar amounts of healthcare services, even though in most rural areas, there are fewer physicians per capita. That's partly because about 30% of rural beneficiaries travel to urban areas for care, Miller said. The chapter includes certain principles that lawmakers can use to guide Medicare policy. One such principle is that Medicare payments should be targeted to low-volume, isolated providers—or those who have low patient volume and are a distance from other providers.