MedPAC releases report on Medicare payment policy on changing incentives to reward value, not volume

Today the Medicare Payment Advisory Commission (MedPAC) releases its June 2009 Report to the Congress: Improving Incentives in the Medicare Program. MedPAC’s report focuses on how incentives in the Medicare payment systems could be changed to strengthen the Medicare program and promote quality care for Medicare beneficiaries.

In the report, the Commission discusses several opportunities for modifying incentives to change the way care is delivered in the Medicare program:

• Graduate medical education: The report reviews medical education and residency training programs and reflects the Commission’s discussions of possible ways to use graduate medical education to better support the future needs of the Medicare program by promoting coordinated care, quality improvement, and judicious use of resources.

• Accountable care organizations: The report explores how accountable care organizations (ACOs) could promote care coordination and potentially increase quality and lower cost growth.

• Physician resource use measurement: This report describes principles that should guide CMS as it implements this legislation. The report also presents findings on three additional areas that shed light on the role of incentives—both for providers and beneficiaries—in the Medicare payment system.

The report also presents findings on three additional areas that shed light on the role of incentives—both for providers and beneficiaries—in the Medicare payment system. These include:

• Self-referral in imaging: Findings presented in this report show that when physicians have a financial interest in imaging equipment, they are more likely to order imaging tests and incur higher overall spending on their patients’ care.

• Follow-on biologics: A regulatory pathway for follow-on biologics (FOBs) will be necessary to create price competition among biologic products and the report discusses the policy issues that need to be addressed to establish such a pathway. The report also presents the Commission’s perspective on how, as a large payer for pharmaceuticals, Medicare may need to change in order to extract greater value from its spending on biologics, while ensuring appropriate clinical use and patient safety.

• Benefit design in traditional Medicare: The report reflects the Commission’s discussion of traditional Medicare benefit design, and whether cost sharing can be used as a tool

Click here for the Press Release.

(SOURCES: The Advisory Board Daily Briefing, http://advisory.com, June 16, 2009; MedPAC, http://medpac.gov, accessed June 16, 2009)