Two government advisory boards, the Medicare Payment Advisory Commission (MedPAC) and the Medicaid and CHIP Payment and Access Commission (MACPAC), discussed multiple ways to contain healthcare costs in meetings last week.
MedPAC discussed a draft recommendation for Congress that would change emergency department (ED) coding and implement reference pricing and binding arbitration to slow Medicare Part B drug prices. MedPAC may also recommend that HHS look at national coding by 2022, which would include correcting coding issues in the Outpatient Prospective Payment System.
Meanwhile, MACPAC looked at possible changes to the disproportionate share hospital (DSH) payments to deal with hospitals’ Medicaid shortfalls by minimizing the redistribution of payments.
Though these commissions act only in an advisory capacity, the reports suggest possible avenues for Congress and regulatory agencies to take in the coming year.
All three proposals would affect providers, but the ED coding suggestion would likely have the largest effect on most hospitals. The plan would ask Congress to direct the HHS secretary to develop and carry out national guidelines for coding hospital ED visits by 2022, to try and make up for the hospital shift in coding from lower to higher intensity services over time
Since hospitals are already faced with lower reimbursements and ED visits of late, any potential changes to coding could result in more lost revenue, sending hospitals scrambling to make up the deficit.
MedPAC also looked at ways to slow Medicare Part B drug costs, which has grown by over 9% annually since 2009. MedPAC found most drugs are paid at 106% of average sales price. In response, MedPAC offered a list of suggestions, including consolidating billing codes for biosimilars and reference products, creating an alternative drug value program and reducing sales price to get more into the alternative drug value program.
MedPAC said reference pricing will "improve price competition and value," while binding arbitration will "address high launch prices for products with limited competition."
Meanwhile, MACPAC continued its discussion from a January meeting about how Medicaid shortfalls should be counted for Medicaid patients with third-party coverage in the DSH program.
The Affordable Care Act cut DSH payments to hospitals. However, Congress has delayed those cuts since 2014. Capitol Hill will need to decide by Sept. 30 whether to go through with the DSH payment cuts for fiscal year 2020.
MACPAC explored three alternatives: counting all payments and costs for third-party coverage, not counting payments or costs for those patients or creating different rules for different types of third-party coverage situations. MACPAC expects to vote on recommendations at its April meeting.
DSH payments have been an area of focus for the body for a while now. Previously, MACPAC voted to recommended phasing in payment cuts to DSH and changing the methodology for allocating spending, saying the changes could save as much as $5 billion over a decade. MACPAC plans to make those recommendations in the committee's annual report this year.