What Will Medicare Look Like in the Future?


Efforts to wring out more value from Medicare will continue, the leading staff member on an influential congressional advisory panel predicted recently.

For example, provider consolidation may encourage further adoption of site-neutral Medicare payments, Mark Miller, the Medicare Payment Advisory Commission’s (MedPAC) executive director, said Wednesday.

Site-neutral payment policies are a way for the Centers for Medicare & Medicaid Services to pay providers an equal amount for an identical service, regardless of the care setting or Medicare payment system. Adopting site-neutral payments across Medicare would reduce reimbursements for some providers.

The various rates Medicare pays for identical services in different settings are a historical construct, Miller explained. However, in the future, there may be a push to expand site-neutral payments, Miller told attendees of a Bloomberg Government discussion on the future of Medicare.

The CMS is required by law to begin site-neutral payments for some hospital outpatient departments in 2017. The policy, which the CMS outlined in a Nov. 14 final rule, is an attempt to address the practice of hospitals acquiring physician offices, then billing patients under the outpatient prospective payment system, which has higher reimbursement rates than the Medicare physician fee schedule.

In addition to site-neutral payments, policy makers are likely to further study the expansion of bundled payments in fee-for-service Medicare, Miller told those at the discussion. Bundled payment models are another way the CMS is trying to reduce variations in treatment costs among hospitals while improving outcomes. With bundled payments, hospitals receive one payment for an entire episode of care that spans acute and post-acute care instead of receiving separate pay for individual services under the fee-for-service schedule. Hospitals could face a financial downside for not coordinating care.

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