The Medicare Payment Advisory Commission's June 2010 Report to Congress, released Monday, emphasizes the need for the Centers for Medicare & Medicaid Services to be a more "innovative purchaser of healthcare."
MedPAC's report focuses on how incentives in the Medicare program can be leveraged to promote quality of care and efficient use of resources. MedPAC is a Congressional agency that provides independent, non-partisan policy and technical advice to Congress on issues affecting the Medicare program.
The commission found that Medicare's ability to use policies such as reference pricing – under which a new item or service is paid at the same payment rate as clinically comparable items of services – has been limited due to lack of clear legal authority.
MedPAC also said CMS lacks the resources to test and implement new methods of healthcare delivery.
The report examines Medicare's benefit design and shared decision-making and discusses reforms that could protect beneficiaries with the greatest need for services and who face very high cost-sharing. It also discusses changes to out-of-pocket spending that would create incentives for beneficiaries to access high-value healthcare services.
In previous reports, MedPAC has proposed changing healthcare providers' incentives to drive improvements in Medicare, such as providing a payment bonus to physicians who practice primary care, reducing payments to hospitals with high preventable readmissions rates and testing the feasibility of a bundled payment for an episode of care.
The current report also explores how beneficiaries and providers in Medicare might use shared decision making – a tool for improving beneficiaries' ability to make informed choices about preference-sensitive healthcare services consistent with their values and available medical evidence.
Also included in the report are recommendations to Congress on how to change Medicare's financing of graduate medical education to align it with the commission's broader goal of delivery system reform.
MedPAC recommends making a significant portion of Medicare's graduate medical education payments contingent on residency programs meeting key educational criteria, such as teaching team-based care, training in ambulatory settings and measuring quality.
Other chapters of the report address payment accuracy, the need to move away from volume incentives in fee-for-service Medicare and systemic changes to better align provider incentives with a reformed delivery system.
The MedPAC report also discusses Medicare's role in supporting and motivating quality improvement, current approaches to offering integrated care for dual-eligible beneficiaries, inpatient psychiatric care in Medicare and the growth of ancillary services in physician offices.