September 28, 2023


Future Depends on What You Do

MedPAC recommendations on 2024 payment premiums get mixed reaction

Picture: Michael Duva/Getty Images

The Medicare Advisory Payment Commission recommends a increased-than-existing-regulation cost-for-assistance payment update in 2024 for acute treatment hospitals and beneficial payment updates for clinicians compensated under the medical professional price routine. It suggests reductions in foundation payment premiums for experienced nursing services, residence overall health organizations and inpatient rehabilitation facilities. 

MedPAC gave Congress tips on payment fees in equally regular charge-for-assistance and Medicare Edge for 2024, gratifying a legislative mandate comparing for each enrollee paying in each applications.

MedPAC estimates that Medicare spends 6% much more for MA enrollees than it would invest if all those enrollees remained in fee-for-services Medicare.

In their March 2023 Report to the Congress: Medicare Payment Policy, commissioners mentioned they were acutely conscious of how providers’ financial standing and designs of Medicare shelling out diverse in 2020 and 2021 because of to COVID-19 and were also mindful of higher and more volatile price raises.

On the other hand, they’re statutorily charged to assess readily available info to assess irrespective of whether Medicare payments are sufficient to assist the economical shipping of care and ensure obtain to care for Medicare’s beneficiaries, commissioners explained. 

Payment-FOR-Services Amount RECOMMENDATIONS 

MedPAC’s payment update suggestions are based mostly on an evaluation of payment adequacy, beneficiaries’ entry to and use of care, the good quality of the treatment, the offer of companies, and their entry to funds, the report reported. As well as bigger payments for acute treatment hospitals and clinicians, MedPAC recommends positive charges for outpatient dialysis amenities.

It recommends providing more sources to acute treatment hospitals and clinicians who furnish treatment to Medicare beneficiaries with lower incomes. It also recommends a positive payment update in 2024 for hospice providers concurrent with wage altering and minimizing the hospice aggregate Medicare payment cap by 20%.

It recommends negative updates, which are reductions in foundation payment costs, for experienced nursing facilities, house health agencies and inpatient rehabilitation facilities. 

Acute treatment

For acute treatment hospitals paid less than the inpatient possible payment program, commissioners advise introducing $2 billion to latest disproportionate share and uncompensated care payments and distributing the overall total making use of a commission-developed “Medicare SafetyNet Index” to immediate funding to individuals hospitals that deliver care to large shares of very low-cash flow Medicare beneficiaries.

This advice obtained pushback from America’s Vital Hospitals.

“We recognize the Medicare Payment Advisory Commission’s need to determine protection internet hospitals for qualified support, but the commission’s Medicare basic safety internet index (MSNI) could have the perverse result of shifting methods away from hospitals that need to have support the most,” claimed SVP of Coverage and Advocacy Beth Feldpush. “The MSNI methodology fails to account for all the nation’s safety net hospitals by overlooking uncompensated care and treatment supplied to non-Medicare, low-income sufferers – specifically Medicaid beneficiaries. Any sensible definition of a safety web provider should think about the care of Medicaid and uninsured individuals, nonetheless the MSNI misses on both of those counts.”

Feldpush urged policymakers to create a federal designation of basic safety net hospitals and to reject the MSNI.

“Even more, policymaking for these hospitals must health supplement, alternatively than redistribute, present Medicare DSH funding, which displays a congressionally sanctioned, perfectly-proven methodology,” she stated.

Doctors and clinicians

For clinicians, the commission suggests that Medicare make qualified incorporate-on payments of 15% to most important care clinicians and 5% to all other clinicians for medical doctor fee agenda products and services furnished to small-income Medicare beneficiaries. 

The American Healthcare Association recommended MedPAC, but also explained that an update tied to just 50% of the Medicare Economic Index would induce medical doctor payment to chronically drop even even further powering raises in the price of delivering care. AMA president Dr. Jack Resneck Jr. urged Congress to move legislation furnishing for an once-a-year inflation-primarily based payment update.

MedPAC has extensive championed a medical doctor payment update tied to the Medicare Financial Index, Resneck mentioned. Medical professionals have confronted the value of inflation, the COVID-19 pandemic and increasing costs to run healthcare procedures, jeopardizing accessibility to care, particularly in rural and underserved locations.

“Not only have Medicare payments failed to reply sufficiently, but doctors observed a 2% payment reduction for 2023, producing an more problem at a perilous second,” Resneck said. “As just one of the only Medicare providers without the need of an inflationary payment update, doctors have waited a long time for this alter. When altered for inflation, Medicare medical professional payment has effectively declined 26% from 2001 to 2023. These ever more slender or adverse running margins disproportionately have an affect on modest, impartial, and rural medical professional methods, as properly as all those dealing with low-profits or other historically minoritized or marginalized client communities. Our workforce is at danger just when the health and fitness of the country relies upon on preserving accessibility to care.”

The AMA and 134 other wellness businesses wrote to congressional leaders urging for a whole inflation-centered update to the Medicare Physician Price Schedule.

MGMA’s SVP of Authorities Affairs Anders Gilberg mentioned, “Modern MedPAC report endorses Congress supply an inflationary update to the Medicare base payment rate for medical doctor and other wellness experienced providers of 50% of the Medicare Financial Index (MEI), an estimated yearly boost of 1.45% for 2024. In the finest of instances such a nominal increase would not include yearly health-related practice price improves. In the present inflationary setting, it is grossly inadequate.”

MGMA urged Congress to go legislation to present an annual inflationary update centered on the full MEI.

Ambulatory surgical centers and extensive-time period treatment hospitals

Beforehand, the fee regarded an annual update suggestion for ambulatory surgical facilities (ASCs). Nevertheless, mainly because Medicare does not have to have ASCs to post facts on the price of dealing with beneficiaries, the commissioners explained they had no new sizeable info to inform an ASC update recommendation for 2024.

Commissioners also formerly regarded an annual update recommendation for lengthy-time period care hospitals (LTCHs). But as the range of conditions that qualify for payment less than Medicare’s prospective payment program for LTCHs has fallen, they said they have turn into increasingly involved about compact sample measurements in the analyses of this sector.

“As a outcome, we will no extended present an annual payment adequacy evaluation for LTCHs but will proceed to keep an eye on that sector and deliver periodic standing studies,” they explained in the report. 


Commissioners said that general, indicators stage to an more and more robust MA application. In 2022, the MA method involved above 5,200 plan possibilities, enrolled about 29 million Medicare beneficiaries (49% of suitable beneficiaries), and paid out MA ideas $403 billion (not together with Element D drug prepare payments). 

In 2023, the average Medicare beneficiary has a selection of 41 designs presented by an ordinary of eight companies. Additional, the stage of rebates that fund additional added benefits achieved a history significant of about $2,350 for every enrollee, on regular.

Medicare payments for these more rewards  which are not included for beneficiaries in FFS – have more than doubled considering the fact that 2018. For 2023, the typical MA program bid to supply Medicare Aspect A and Section B advantages was 17% less than FFS Medicare would be projected to spend for those people enrollees. 

Nevertheless, the benefits from MA’s lower price tag relative to FFS expending are shared completely by the corporations sponsoring MA ideas and MA enrollees (in the type of added rewards). The taxpayers and FFS Medicare beneficiaries (who aid fund the MA method via Aspect B rates) do not understand any financial savings from MA plan efficiencies. 

Medicare should not carry on to overpay MA programs, MedPAC claimed. Above the previous handful of yrs, the commission has built tips to handle coding intensity, exchange the high-quality reward program and create additional equitable benchmarks, which are used to established strategy payments, the report reported. All of these would stem Medicare’s excess payments to MA strategies, aiding to preserve Medicare’s solvency and sustainability whilst protecting beneficiary obtain to MA strategies and the further rewards they can offer. 

Element D

Medicare’s price-primarily based reinsurance carries on to be the major and swiftest developing part of Section D expending, totaling $52.4 billion, or about 55% of the total, in accordance to the report. 

As a result, the economic danger that options bear, as very well as their incentives to control costs, has declined markedly. The price of the common basic gain that is paid out to options by the capitated immediate subsidy has plummeted in the latest yrs. 

In 2023, immediate subsidy payments averaged significantly less than $2 for every member for every thirty day period, in contrast with payments of almost $94 per member, per month, for reinsurance. To aid handle these concerns, in 2020 the fee suggested substantial changes to Portion D’s profit style and design to limit enrollee out-of-pocket paying realign plan and company incentives to assistance restore the position of possibility-dependent, capitated payments and reduce options of the latest program that distort sector incentives.

In 2022, Congress handed the Inflation Reduction Act, which bundled many policies connected to prescription prescription drugs. One these types of provision is a redesign of the Component D benefit with quite a few similarities to the commission’s advised modifications. 

The modifications adopted in the IRA will be carried out around the subsequent numerous years, and are probably to alter the drug-pricing landscape, commissioners mentioned.

Twitter: @SusanJMorse
E-mail the writer: [email protected]

Emily Kwan will offer extra element at her HIMSS23 session “Implementing an AI NLP Resource to Handle SDOH Requirements.” It is scheduled for Tuesday, April 18, at 1:30 p.m. – 2:30 p.m. CT at the South Setting up, Stage 1, S105 C.