December 17, 2021

December MedPAC Meeting Focuses on Payment Adequacy & Updating Payments

The Medicare Payment Advisory Commission (MedPAC) met Dec. 9–10 to discuss assessing payment adequacy and updating payments for hospital inpatient and outpatient services, as well as for physicians and other health professionals. MedPAC is a non-partisan, independent legislative branch commission created to advise Congress about Medicare-related issues.

MedPAC employees provided updated recommendations for acute care hospital base payment rates, which are broken into four areas: beneficiary access to care, quality of care, hospital access to capital, and Medicare payments and hospital costs. The COVID-19 public health emergency (PHE) has not only affected Medicare beneficiaries and the healthcare workforce, it has also had material effects on payment adequacy indicators, which makes them more difficult to interpret.

MedPAC employees also presented on the Bipartisan Budget Act (BBA) of 2018, which temporarily extended and modified the low-volume hospital (LVH) payment adjustment in the inpatient prospective payment system for 2019 through 2022. During the presentation, MedPAC staff presented the following considerations for the Chair’s draft recommendation:

  • To maintain payments high enough to ensure beneficiary access to care; maintain payments close to hospitals' cost of efficiently providing high-quality care; maintain fiscal pressure on hospitals to constrain costs; and minimize differences in payment rates for similar services across sites of care.
  • To the extent the COVID-19 PHE continues, separate any needed financial support from the annual update and target to affected hospitals that are necessary for access.

Another session focused on assessing payment adequacy and updating payments for physicians and other health professional services. MedPAC recommended that physician fee schedule (PFS) base payment rate in 2023 should be based on beneficiaries' access to care, quality of care, and clinicians' revenues and costs.

An additional topic discussed in the physician payments session was the lack of information about many audio-only telehealth services. MedPAC is recommending that the Centers for Medicare and Medicaid Services (CMS) should temporarily cover some telehealth services, including audio-only, after the COVID-19 PHE if there is potential for clinical benefit. Currently, there is no information on claims indicating whether a telehealth service was provided by audio or audio-video interaction, which makes the claims data unusable to CMS in assessing the impact of audio-only services on access, quality and cost.

If you have questions or would like more information, please email Kimberly Greck, American College of Radiology® Economic Policy Analyst.