The Medicare Payments Advisory Commission (MedPAC) is once again calling on federal policymakers to streamline alternative Medicare payment models.

Released late Wednesday night, the June MedPAC report details how this could theoretically be done.

The attention to alternative payment models should come as no surprise to those who follow developments closely. In June 2021, MedPAC recommended that the U.S. Centers for Medicare and Medicaid Services (CMS) reduce the number of alternative Medicare payment models and instead develop models that work more harmoniously together.

“[Alternative payment models] typically provide healthcare providers with a financial incentive to provide a more efficient range of services and improve the care they provide,” the MedPAC report says. “However, the presence of many [alternative payment models] concurrent work can create unnecessary complexity and reduce incentives when Medicare beneficiaries are in more than one model at the same time and/or when providers are in more than one model. [alternative payment model] in the same time.”

In general, alternative payment models that home healthcare providers are considering or work with include direct contract forms, accountable healthcare organizations (ACOs), bundled payments, and more.

In general, MedPAC proposes to reduce the number of population-based payment models available to providers.

“With a smaller number of tracks, each track could target different sized vendor organizations and carry different levels of financial risk,” the report says.

In MedPAC’s view, in order to increase vendor incentives, ACO benchmarks should be updated using external administrative growth factors that will be known to the ACO in advance.

“Rebasing waivers ensure that ACOs that manage to reduce their costs are not penalized in subsequent years due to a ratcheting reduction in their benchmarks based on their recent actual spending,” the post reads.

MedPAC also recommended a Medicare-managed national episode-based payment model that would be mandatory for certain providers, as well as confirmed clinical episodes such as hip and knee replacements.

Access to home healthcare

The report also shows that access to home health care remains high in underserved areas (MUAs) in the US.

MedPAC examined the access of rural beneficiaries and persons living in MUAs to health care. Specifically, beneficiaries who are dual eligible for Medicare and Medicaid or who have multiple chronic conditions were screened.

Overall, the use of aid by both rural and urban beneficiaries was comparable, although with some differences.

“Beneficiaries residing in MUAs generally received the same scope of services as those

who did not use the services we reviewed – evaluation and management (E&M) meetings

with clinicians, inpatient and outpatient hospital visits, skilled care days, and home care episodes,” the MedPAC report says.

MedPAC found that for home care episodes, usage rates were similar for city beneficiaries in full, partial, and non-MUA counties.

On the other hand, the average number of home health care visits per beneficiary was significantly higher in full MUAs compared to partial MUAs and no MUAs among rural communities.

“These differences were likely due to large regional differences in the use of home healthcare services rather than access issues in partial and non-MUAs,” MedPAC said in the report. “For example, in four states—Alabama, Florida, Louisiana, and Mississippi—whose rates of home health care use per beneficiary fluctuate about two to three times the national average—they account for about 16% of all beneficiaries in the surrounding rural areas who live in full MUA. counties, but only about 1% of beneficiaries living in the surrounding rural areas who live in non-MUA counties.”

The full MedPAC report can be found here.

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