507 SLP MOD 4: MedPAC Recommendations

507 SLP MOD 4 Student’s Name Institution 507 SLP MOD 4: MedPAC Recommendations In June 2017, the Medicare Payment Advisory Commission (MedPAC) offered recommendations to Congress that would ensure the continued viability of the Medicare program. The commission is tasked with advising the Congress on the challenges and issues affecting the program. Three of the main recommendations offered in the report include implementation of a unified payment system for post-acute care (PAC), modification of the average sales price (ASP) system in 2018, and the creation of a voluntary Drug Value Program (DVP) by 2022 (MedPAC, 2017). This paper examines in detail the key recommendations of the commission. First, the commission recommends that the Congress should implement a prospective payment system (PPS) for PAC from 2021. While there may be an overlap in the types of cases treated in the main PAC settings, there can be substantial differences in Medicare payments for patients with similar characteristics, partly because of the separate systems used by the program when paying for stays in each setting. As a result of the overlap in the PAC settings, the commission recommends that a unified payment system be set up to cover the four PAC settings. The proposed payment system would be based on patient characteristics and not the service site. The system would allow redistribution of payments depending on the conditions of patients. For rehabilitation care, the report notes that the payments would reduce. For medically complex care, the report points out that payments would increase. There would an increase in equity in payments and as a result, there will be a reduced incentive by providers to prioritize the admission of specific types of patients. According to Kroll and Fisher (2018), PAC settings were characterized by a 7% annual increase in Medicare spending. The report by MedPAC (2017) recommends that payments to providers be reduced by 5% for close alignment with costs of care. It is deducible that the new payment system would address the rising Medicare expenditure. Second, MedPAC (2017) recommends a modification of the ASP system. Medicare covers the price of Part B drugs through the average sales price + 6% system. As informed by the report, the drugs administered in physician offices, supplier furnished drugs, as well as drugs administered in hospital outpatient departments, are covered under Medicare Part B. in 2015, a total of $26 billion was paid by the program and its beneficiaries to biologics and drugs covered under Medicare part B. Furthermore, the report notes that the spending on Part B drugs by Medicare has been increasing by 9% annual...