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Advising the Congress on Medicare issues
MedPAC > Our Work > Ambulatory Care Settings > June 2022 Report to the Congress: Medicare and the Health Care Delivery System

June 2022 Report to the Congress: Medicare and the Health Care Delivery System

Jun 15, 2022 / Reports

Executive Summary

As part of its mandate from the Congress, each June the Commission reports on refinements to Medicare payment systems and issues affecting the Medicare program, including changes to health care delivery and the market for health care services. The seven chapters of the June 2022 report cover the following topics: 

An approach to streamline and harmonize Medicare’s portfolio of alternative payment models. The Commission provides specific suggestions to operationalize our June 2021 recommendation that CMS reduce the number of Medicare alternative payment models (APMs) and design models to work better together.

• Vulnerable Medicare beneficiaries’ access to care. In response to a congressional request, the Commission presents an analysis of the service utilization of beneficiaries who reside in a medically underserved area (MUA), are dually eligible for Medicare and Medicaid, or have multiple chronic conditions.

• Supporting safety-net providers. The Commission provides a general framework to identify safety-net providers and evaluate whether new Medicare safety-net funding might be warranted in a health care sector. We apply our framework to identify safety-net hospitals, evaluate the financial performance of safety-net hospitals, and model the redistribution of current disproportionate share hospital (DSH) and uncompensated care payments using our safety-net hospital metric.

• Addressing high prices of drugs covered under Medicare Part B. The Commission discusses approaches for Medicare Part B to address high launch prices for new “first-in-class” drugs with limited clinical evidence, high and growing prices among products with therapeutic alternatives, and financial incentives associated with the percentage add-on to Medicare Part B’s payment rate.

• Improving the accuracy of Medicare Advantage payments by limiting the influence of outliers in CMS’s risk-adjustment model. The Commission presents an option to address the influence of outliers in the CMS hierarchical condition category (HCC) risk-adjustment model used to adjust payments to Medicare Advantage (MA) plans.

• Aligning fee-for-service payment rates across ambulatory settings. The Commission presents an analysis of an approach to align the payment rates across ambulatory settings—hospital outpatient departments (HOPDs), ambulatory surgical centers (ASCs), and freestanding physician offices—that currently have different Medicare payment rates for the same services.

• Segmentation in the stand-alone Part D plan market. The Commission discusses segmentation in the market for stand-alone prescription drug plans (PDPs) based on beneficiaries’ eligibility for Part D’s low-income subsidy (LIS) and drug spending, its effects on Medicare spending, and potential policies to address segmentation and its effects. 

Chapters