Dive Brief:
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The Medicare Payment Advisory Commission (MedPAC)'s annual report to Congress on Medicare and the healthcare system, which is mandated to provide every June, focused heavily on Medicare payment for drugs under Part B and Part D as well as paying clinicians under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).
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The report concluded the creation of a unified Post-Acute Care (PAC) payment system that could replace the four separate systems currently used by Medicare is "feasible and within reach."
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The report was anticipated previous to its release based on early analysis of MedPAC's proposals following its April meeting.
Dive Insight:
MedPAC's proposals regarding Medicare payment for drugs under Part B and Part D have taken center stage in the 2016 report's discussion, with three chapters in the report looking at issues around prescription drugs and the rapid increase in drug prices -- which it notes will impact the financial sustainability of the Medicare program.
It specifically looks to address issues around Medicare's lack of direct influence over drug prices due to its indirect purchasing; ways to restrain the costs of oncology care, which is responsible for more than half of Medicare Part B's drug spending; and recommendations aimed at strengthening Medicare Part D through strategies including increased financial incentives for enrollees to manage their benefits.
Among other notable points from MedPAC's report: It projects 2016 Medicare Advantage (MA) payments will be 102% of fee-for-service (FFS) spending, and estimates that HMOs bid an average of 90% the cost of FFS spending, compared to average bids of 98% from other plan types--which suggests HMOs are able to provide services for less than FFS in the markets where they bid.
As noted earlier by Avalere analysts, it is unlikely Congress will act on the recommendations, particularly until after this year's election.