The Medicare Payment Advisory Commission has completed work on a road map for overhauling how the program pays for post-acute care. The advisory panel voted to back a variety of changes to the Part D prescription drug program that could save as much as $10 billion over five years.
The post-acute proposal, to be included in the commission's June report to Congress, would change the way Medicare reimburses skilled-nursing facilities, home health agencies, inpatient rehabilitation facilities and long-term-care hospitals. It would establish rates according to specific patient conditions instead of the kind of specific care setting.
Congress directed MedPAC to develop a plan to pay these providers under one prospective payment system.
HHS would have until 2022 to develop an actual payment prototype, and MedPAC would need to weigh in on it by 2023.
Kathy Buto, a commissioner and independent health policy consultant in Arlington, Va., during a MedPAC meeting on Thursday called the report “a thoughtful road map.”
A provider in the room immediately expressed concern. It's unclear what impact the model will have on patients' out-of-pocket costs, since copays now vary depending on the post-acute-care setting, said Dr. John Votto, CEO of Hospital for Special Care, a private not-for-profit rehabilitation long-term acute and chronic-care hospital in Connecticut.
In 2013, about 42% of Medicare beneficiaries discharged from an inpatient hospital went to a post-acute-care facility: 20% to a skilled-nursing facility, 17% to a home health agency, 4% to an inpatient rehabilitation facility and 1% to a long-term-care hospital. Post-acute-care spending has more than doubled since 2001, from $27 billion to $59 billion in 2013.
MedPAC commissioners also unanimously passed a package of nine recommendations related to Part D. If implemented, the package of proposals could save Medicare as much as $2 billion in one year, and as much as $10 billion in in five years, according to a Congressional Budget Office assessment.
Perhaps the most controversial of MedPAC's suggestions was to limit which drugs would be a part of the protected class of Medicare Part D.
Under the policy, a Part D plan is required to cover all or substantially all drugs in six therapeutic classes: antiretrovirals, immunosuppressants when used to prevent organ rejection, antidepressants, antipsychotics, anticonvulsant agents and antineoplastics.
MedPAC suggested removing from the list antidepressants and immunosuppressants used to prevent transplant rejection. The commission argued that the move would save money without affecting medication access by switching patients to generic options. But the exact amount saved and the potential number of people who would be impacted were unknown.
Jack Hoadley, a Georgetown University health policy analyst, said he thought beneficiaries wouldn't be harmed by the proposal because there are numerous generic offerings for both drug types.
Providers and advocates, however, were furious. “Without protected class status, there is no other guarantee under Medicare that would ensure patient access to all immunosuppressive drugs,” Dr. Matthew Cooper, transplant surgeon and board member of the National Kidney Foundation, said in a statement. “In order to find the right combination for individual patients, physicians must have the full-range of approved immunosuppressive drugs at their disposal.”
Joe Baker, president of the Medicare Rights Center, said in a statement that the advocacy organization is “deeply concerned that the proposed formulary flexibilities, specifically the changes to the protected classes, could limit beneficiary access to needed medications.”
The CMS has tried twice to make this change through rule-making—once in 2012 and again in 2014. Stakeholders thwarted both efforts, arguing the change would deny patients their medications. Members of both parties in Congress also slammed the idea.
Another controversial recommendation would reduce the reinsurance subsidy for Part D plans from 80% to 20%, while increasing what plans are paid upfront.
By law, Medicare Part D subsidizes 74.5% of the expected cost of basic drug benefits, with enrollees paying the remainder through premiums. The subsidy is composed of two components: direct monthly subsidy payments and expected individual reinsurance payments to plans.
MedPAC said the change would force plans to more diligently track their spending.
Last month, Dr. Craig Samitt, a MedPAC commissioner and chief clinical officer at Anthem, said he was worried about how the proposal would affect smaller plans. On Thursday, even though he ultimately supported the proposal, he said he still had reservations.
“One of the weaknesses of the recommendation is that we haven't studied the impact on plan sponsors,” Samitt said.