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Why Does MedPAC Matter?

Interview · February 5, 2018

Mark Miller and Melinda Buntin headshots

Part 1 of our interview with Mark E. Miller, PhD, Vice President of Health Care at the Laura and John Arnold Foundation, and former Executive Director of the Medicare Payment Advisory Commission. For more, read part 2, MedPAC’s Role in Curtailing Drug Prices.


Melinda Buntin:  This is Melinda Buntin, Professor and Chair of Health Policy at Vanderbilt School of Medicine on behalf of NEJM Catalyst. I’m interviewing Mark Miller, the new Vice President of Health Care at the Laura and John Arnold Foundation, and former Executive Director of the Medicare Payment Advisory Commission, otherwise known as MedPAC. Mark, thanks for agreeing to talk with me and NEJM Catalyst today. Can I start by asking you to tell us, in your own words, what physicians and other health care professionals need to know about MedPAC, and why it matters?

Mark Miller:  I think probably to talk about the structure first. It’s a legislative branch agency, although it is structured to be independent and give independent advice to Congress. It was created in ’97. There were a couple of predecessor agencies that had similar tasks given to us by Congress. It’s required by law to provide analysis and ideas to make changes to Medicare. Just to be clear, it makes recommendations to Congress. Congress is not required to follow them, so when Congress does follow them, the ideas and the analysis have to be compelling enough to move Congress along.

[One of the] reasons it matters to physicians and other health care providers is [that] MedPAC has a lot of credibility that it’s built up over the years. Its influence translates into changes in laws and regulation that affect changes in Medicare, and so it can have a large impact on physicians and other providers.

The other thing I wanted to say is that I do think that physicians and health care providers should understand MedPAC’s mission because by law, it’s required to make these recommendations to Congress, and those recommendations in turn can have an effect. The other way to interpret your question is that often the organized interests that represent physicians and other health care providers don’t understand that MedPAC looks at the issues in Medicare from three perspectives. The first is from the perspective of the beneficiary, who the actual Medicare entitlement attaches to, and the notion there is to be sure that the beneficiary gets quality, necessary care. The second perspective is the provider and the idea of bringing physicians and other health care providers to the table in order to provide that care. The third perspective is the taxpayer and the beneficiary who pay for the program.

The commission is always trying to think about any Medicare issue from all three of those perspectives. Sometimes providers can end up getting frustrated because they’ll come to MedPAC to make a case, often to increase their payments or something like that, and they aren’t necessarily thinking of all three perspectives. So I think it is helpful for physicians and other health care providers to understand that MedPAC is always thinking of any issue from all three of those perspectives.

Buntin:  You certainly have a lot of perspective on that. You were at MedPAC for more than 10 years, right?

Miller:  Fifteen.

Buntin:  One of those issues that might have caught providers’ attention and would be very important from that provider perspective is that MedPAC recently recommended that CMS scrap the MIPS [Merit-Based Incentive Payment System] program. From your perspective, as Executive Director, what did you see as the problem with MIPS, and what do you think MedPAC might recommend replacing the MIPS program with?

Miller:  There are probably a couple things here, just to set the stage a little bit. The recommendation that MedPAC is considering right at this point is to replace MIPS with a different program. As you know, and others know, MIPS is the part of the macro legislation that focuses on fee-for-service, physicians who remain in fee-for-service, and rewarding or penalizing their payments on the basis of their quality. The MedPAC recommendation comes from a couple of places. First, in general, the commission believes that the quality measurement process has become highly overbuilt. We’re collecting too many measures, and we’re collecting measures that have little to do with actual outcome — a lot of process measures.

We think that that results in a burden to providers and particularly physicians in small physician practices. In fact, CMS [Centers for Medicare and Medicaid Services] has estimated that the MIPS data collection process results in about $1 billion in practice costs across the country. We also think that the data that’s being collected, bluntly, is not going to lead to higher quality.

We also think that the design of MIPS, which is largely based on fee-for-service approaches, drives continued measurement in a fee-for-service way, and that has to also be used on the advanced payment model side of the macro legislation. So in a sense, you have fee-for-service measurement driving the alternative payment model (APM) measurement of quality, which we think is not the right direction to be moving. We also think that the MIPS design is both inequitable and sends confusing signals.

Inequity refers to the fact that the physicians select their own measures and that many of the measures are topped out. You’re allocating billions of dollars, but you’re not going it on a comparable basis from physician to physician. Then the selection of measures and the topped-out nature of those measures means that you have very compressed measurement, and that means very small changes can result in very large dollar differences. We think ultimately, physicians will feel that that’s unfair.

What we’re trying to do is try to reduce the burden, make it simpler for the physician, and then also arrange the quality measures to be more oriented to population measures rather than individual physician and process measures. We do that in a couple of ways. The first is that we would create a pool of dollars from the fee-for-service side of physician payments. We would create a pool of dollars by withholding some percentage of physician payment and then give the physician three choices. If you join an APM, you get your withhold back and you participate in whatever APM rewards are available in current law. Our second choice is to select enough physicians that you could be measured on the basis of population-based measures like avoidable emergency room use or patient experience measures. The third choice is to do nothing. You don’t participate, you don’t get your withhold back.

Note that the physician in this setup doesn’t have to submit any data. All the population-based measures are computed by CMS, and the physician is either measured as part of an APM, part of a group of physicians in which there’s enough of them in order to be measured on the population-based measures, or they don’t participate but they are relieved of burden and all of the calculation of the measure would be done by CMS. This would involve both changes in the law, so Congress would have to act, and also changes on the part of CMS.

Buntin:  Picking up a thread on what you just said, Mark, what do you think CMS could do to increase the number of clinicians in those alternative payment models or APMs, and do you think the requirements for APMs should change as well?

Miller:  The commission has also done a fair amount of thinking there, and given a lot of written guidance to CMS and to Congress, and CMS has taken a lot of the commission’s ideas and put them into subsequent generations of their ACO [accountable care organization] models, for example. So, to try and answer your question more directly, again, back to macro. There are two sides of it, whether a physician stays in fee-for-service and the whole MIPS process or MedPAC’s reform process applies, but now we’re talking about the physicians who cross over into APMs.

The commission’s view here is that the signals should be stronger to move from fee-for-service to APM. This will be my last statement on the MIPS side. The notion is, don’t make the rewards extremely generous on the MIPS side and put more of the reward process on the APM side. One very direct action is to deal with the $500 million extraordinary performance bonus, which is on the MIPS side of the legislation, potentially repurpose those dollars to the APM side, and give greater reward on that side. So that’s one thought.

There are other ideas. The commission airs on the side of population-based APM models, so it tends to think in terms of total spending and the total quality outcomes for the beneficiary rather than episode-based models. The commission is oriented toward two-sided risk so that there’s truly a risk factor for the provider, because the commission believes that that will drive change more directly than bonus-only types of models.

The commission believes that the beneficiary should get and see some direct financial benefits for participating in the alternative payment model, and also the commission believes that when providers enter into those risk arrangements, Medicare should relax many of the fee-for-service regulations that govern the fee-for-service side such as the 3-day rule for skilled nursing facility services or the homebound definition for home health services.

Let me give you another example there. Say you had a risk-based alternative payment model. You might have asymmetric risk, more upside than downside. In order to finance that so the taxpayer isn’t at risk, you could take the $500 million, for example, on the MIPS side and repurpose it and send a stronger signal to participate in the APM side of the legislation.

There is one global question to think about here, and everybody has to answer it for themselves, but there’s a question of, do you want everyone in an APM, or do you want providers in good APMs? The commission is concerned that the APM models not be dumbed down to the point that they are no longer effective just to get participation, but they should still be strong enough to have an effect on spending or on quality. But there are ways to create signals that are stronger, such as the ideas that went through there.


The conversation continues in Part 2: MedPAC’s Role in Curtailing Drug Prices.

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