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Advising the Congress on Medicare issues
MedPAC > Meetings > April 7-8, 2022

April 7-8, 2022

PUBLIC MEETING

MedPAC’s April 2022 public meeting was held virtually via video conference on the GoToWebinar platform.

Agenda

04/07/2022 . 10:00 am - 11:25 am

Addressing high prices of drugs covered under Medicare Part B

Staff Contacts:

ISSUE: An important driver of growth in Medicare Part B drug spending is the price Medicare pays for drugs. Generally, Medicare has had only an indirect influence on how new drugs are priced. Medicare lacks tools to balance rewarding manufacturer innovation with affordability of care for beneficiaries and taxpayers, and the program has limited tools to promote price competition among Part B drugs with therapeutic alternatives. Concern also exists about financial incentives associated with Medicare Part B’s percentage add-on payment.

KEY POINTS: Staff will present approaches for Medicare to address (1) high prices for new “first-in-class” drugs with limited clinical evidence, and (2) high and growing prices for drugs or new products with therapeutic alternatives. We will also discuss options to modify Medicare’s current six percent add-on payment to the Part B drug payment rate.

ACTION: Commissioners will provide feedback on potential policy approaches.

04/07/2022 . 11:30 am - 1:00 pm

Initial findings from MedPAC's analysis of Part D data on drug rebates and discounts

Staff Contacts:

ISSUE:  The Consolidated Appropriations Act, 2021, granted the Commission access to direct and indirect renumeration (DIR) data collected by CMS to administer Medicare Part D and to pricing information relevant primarily for provider-administered drugs under Medicare Part B.

KEY POINTS:  Staff will describe initial steps taken to validate and analyze the DIR data.

ACTION:  Commissioners will provide feedback on the material and the direction of future analytical work.

04/07/2022 . 2:00 pm - 3:25 pm

Segmentation in the stand-alone Part D prescription drug plan market

Staff Contacts:

ISSUE:  CMS allows insurers to offer up to three PDPs in each Part D region—one that provides the basic Part D benefit and two “enhanced” plans that provide the basic benefit plus supplemental benefits. Most major insurers that offer PDPs have three plans and follow the same basic strategy of using (1) their basic PDP to target beneficiaries who receive the Part D low-income subsidy, (2) one enhanced PDP to target non-LIS beneficiaries with low drug costs, and (3) the other enhanced PDP to target non-LIS beneficiaries with high drug costs. This strategy probably makes PDPs more profitable for insurers.

KEY POINTS:  We examine some potential reforms that would reduce segmentation but involve tradeoffs for insurers, beneficiaries, and the Medicare program.

ACTION:  Commissioners will discuss the material and provide guidance on future work.

04/07/2022 . 3:30 pm - 5:00 pm

Leveraging Medicare policies to address social determinants of health

Staff Contacts:

ISSUE: Widespread recognition of health disparities has prompted many organizations in the public and private sectors to prioritize health equity and address social determinants of health (SDOH) as key components of healthcare quality improvement.

KEY POINTS: We highlight work the Commission has done and plans to do around addressing SDOH and describe some other policy areas that the Commission could support as policymakers continue work to improve health equity.

ACTION: Commissioners will discuss the material and provide guidance on future work.

04/08/2022 . 9:00 am - 10:25 am

An approach to streamline and harmonize Medicare’s portfolio of alternative payment models

Staff Contacts:

ISSUE:  CMS concurrently operates many alternative payment models (APMs), which could dilute the strength of models’ incentives. In the June 2021 report to the Congress, the Commission therefore recommended that CMS implement a more harmonized portfolio of fewer APMs.

KEY POINTS:  In subsequent meetings in 2021 and 2022, commissioners have explored how to operationalize this recommendation, and have coalesced around some more specific suggestions for CMS to consider, which will be summarized in preparation for their inclusion in the commission’s June 2022 report to the Congress.

ACTION:  Commissioners will discuss the material and provide directions for future work.

04/08/2022 . 10:30 am - 12:00 pm

Aligning fee-for-service payment rates across ambulatory settings

Staff Contacts:

ISSUE: Medicare payment rates often differ for the same service among ambulatory settings, which include physician offices, ambulatory surgical centers (ASCs), and hospital outpatient departments (HOPDs). Such payment variations encourage arrangements among providers that result in care being provided in the settings with the highest payment rates, thereby increasing total Medicare spending and beneficiary cost sharing. In November, commissioners reviewed results from an analysis evaluating a policy that would align of payment rates more closely across the three settings.

KEY POINTS: Some ambulatory services cannot be safely provided in freestanding offices or ASCs and should be provided only in HOPDs. However, many other services can be safely provided in multiple settings, and a prudent purchaser should not pay more for those services in one setting than in another. For these services, payment rates could be aligned across the three ambulatory settings to more closely match the payment rate of the lowest cost setting without adversely affecting beneficiaries’ access to care. Budget-neutrality and stop-loss policies could mitigate the financial impact on providers.

ACTION: Commissioners will discuss the material and provide guidance on future work.