Understanding the Role of MedPAC

In this episode of the Advancing Surgical Care Podcast, ASCA Chief Executive Officer Bill Prentice is joined by ASCA Regulatory Counsel and Director of Government Affairs Kara Newbury for a discussion about MedPAC, the Medicare Payment Advisory Commission. Prentice and Newbury look at the role of the 17-member commission in providing advice and recommendations to Congress regarding payments to Medicare-approved providers, including ASCs.

Transcript

Narrator:   0:06
Welcome to the Advancing Surgical Care Podcast brought to you by ASCA, the Ambulatory Surgery Center Association. ASCA represents the interests of outpatient surgery centers of every specialty and provides advocacy and resources to assist them in delivering safe, high-quality, cost-effective patient care. As with all of ASCA’s communications, please check to make sure you are listening to or viewing our most up-to-date podcasts and announcements.

Bill Prentice:   0:37
Hi, I'm Bill Prentice, ASCA's CEO. On this ASC podcast, I'm pleased to welcome back Kara Newbury, ASCA's regulatory counsel and director of government affairs. And I've invited Kara on to the podcast today to talk about the role of MedPAC, the federal advisory panel that we often reference in our government affairs communications, which may or may not be completely familiar to all ASCA members. This is the first of what we hope will be a series on some of the federal agencies that ASCA interacts with that we have a say on healthcare policy that can impact ASCs. So what is MedPAC? The term MedPAC is actually an acronym for the Medicare Payment Advisory Commission, and it was established by the Balanced Budget Act of 1997 to advise Congress on issues impacting the Medicare program. And while MedPAC was given a very broad mandate to evaluate the Medicare program, it has historically focused its attention and recommendations on payments to healthcare providers in Medicare's traditional fee-for-service program, and that includes ASCs, as well as payments to private insurance plans participating in Medicare Advantage. MedPAC is also expected to monitor and report on the level of access to care and the quality of that care received by Medicare beneficiaries. And by law, there are 17 MedPAC commissioners who are appointed by the Comptroller General, the federal government's chief fiscal watchdog and accountant. The law requires the commission to include a mix of individuals with broad geographic representation who have expertise in the financing and delivery of healthcare services. Commissioners have included physicians and other healthcare professionals, employers, third-party payers, researchers and representatives of both consumers and the elderly. Now despite that expectation that MedPAC would be made up of a diverse mix of health policy experts, however, more often than not, it's been made up of individuals who work at hospitals and universities primarily from large, urban areas. Currently, there are no representatives from the ASC community serving on MedPAC and that, obviously, is something we'd like to see changed. So with that brief background, let me welcome Kara Newbury to the Advancing Surgical Care Podcast. Kara, welcome.

Kara Newbury:   2:48
Hi, Bill. Thanks for having me.

Bill Prentice:   2:50
So Kara, in my opening remarks, I talked about the congressional mandate given to MedPAC. I think it'd be helpful if we take a few minutes to further explain what MedPAC and the MedPAC staff do over the course of the year, and how we at ASCA interact with them. Could you give us a quick take on that?

Kara Newbury:   3:06
Sure. So I also just want to point out that MedPAC was established as a nonprofit, legislative branch agency. So it wasn't tied to any particular party and there really are not supposed to be partisan affiliations associated with the commissioners on MedPAC. So every year, MedPAC puts out several different reports and documents. Probably the main one that we focus on is the March report because it includes recommendations that have been voted on by the MedPAC commissioners in terms of what should be the update for payments for every year. And so, MedPAC staff does give ASCA leadership the opportunity to provide feedback in advance of that March chapter being published. Over the years, we have typically met with MedPAC staff every year to every other year, depending on what's going on at the time, and it is very difficult to reach the commissioners themselves. MedPAC staff is somewhat protective over the commissioners; we have done some sleuthing in the past and found email addresses and actually sent a couple of letters and communications on who we are as an industry and what we think that the MedPAC commissioners should know, directly to their personal or professional email addresses that we could find.

Bill Prentice:   4:30
Yeah, and Kara let me stop you there because that is one of the things that I personally find a bit frustrating is the fact that the commission doesn't take testimony. They don't give groups like ASCA or other healthcare organizations a real opportunity to meet with them in advance of policymaking and talk about issues of concern. I know that at the end of meetings they have a public forum that allows people to briefly speak, but that's certainly not, I think, the right opportunity or the right venue for groups to be able to really talk with the commissioners and try and make them understand, for example, the ASC marketplace. Do you agree with that?

Kara Newbury:   5:08
I completely agree and, you know, pre-COVID times, I recall being in MedPAC meetings and just seeing a line of industry stakeholders from various entities, hospitals, hospices, skilled nursing, and really it didn't seem as if, it's like right before lunch and the commissioners just want to get out of there, so it didn't really seem as if there was a lot of attention paid to those remarks that were being given.

Bill Prentice:   5:35
Yeah, the example I would give is they would vote on a recommendation and then afterwards, you'd have an opportunity to tell them why you think they were wrong for having done what they've done. Hardly the best way to do policymaking. Well, before we move on Kara, we're gonna take a very short break to hear a few words from our podcast sponsor. Stand by and we'll be back shortly.

Narrator:   5:57
This episode of the Advancing Surgical Care Podcast  is brought to you by in2itive Business Solutions, a revenue cycle management company who has served the ASC community for over 10 years. in2itive Business Solutions works with existing billing systems to streamline your processes and maximize your centers reimbursements. Visit in2itive today at ascrev.com.

Bill Prentice:   6:26
So Kara, before the break, we were talking about MedPAC and its role in advising Congress on Medicare policy. Let's talk about some of those policy recommendations. As many ASCA members know, we've had some considerable disagreements with MedPAC over the years, and particularly with their comments about our payment rules. Specifically, MedPAC has urged Congress to overrule CMS' determination to provide ASCs with a modest rate increase and has urged Congress to impose a cost reporting requirement on ASCs. Well, let's talk about both those things. So, what's MedPAC's rationale for opposing even modest rate adjustments, and particularly in a year like this previous one when we've had the COVID-19 pandemic that's adversely impacted almost every ASC in the country?

Kara Newbury:   7:17
So it's interesting, Bill. Up until 2012, MedPAC would propose some sort of modest increase. The latest that year was a 0.5 percent increase and, if I recall, for hospital outpatient departments they were recommending a 3.5 percent. The interesting thing about all of this is that those recommendations have nothing to do with how our payment system is currently structured or updated. So our updates are based off of, right now they're based off of the hospital market basket due to some advocacy that we were successful with previously. But previous to that they were based on the Consumer Price Index for All Urban Consumers. So, whether MedPAC proposes a 0.5 percent update or a 0 percent update, that doesn't really matter. They're trying to send, because it doesn't have anything to do with what's actually going to happen, they're trying to send the message that until ASCs supply cost data that they just throw their hands up in the air, and they just have no way of knowing what we could or should see in terms of an update because they don't know what our true costs are.

Bill Prentice:   8:24
Let me stop you there again because I think this really bears a little bit of more discussion because, particularly for our listeners, they need to be reminded that we don't have our own payment system. Almost every other provider type in Medicare has its own payment system, whereas ASCs, as you mentioned, we're just paid a percentage off of the hospital outpatient department payment system. So the thought that we need to create our own payment system, which obviously would have its own regulatory issues and cost, and then develop our own cost reporting doesn't seem to make a lot of sense when we have something that, particularly if done properly, would provide appropriate payments for ASCs. Now, I'll argue that of course we're not there yet, and that the percentage we're paid off of the HOPD payment needs to be increased if we really want to see migration of more Medicare patients to our setting. But it doesn't seem to make sense to create a whole new structure and system when all they need to do is just adjust our payments a little bit to get the outcomes I think we all want, which is more patients going to the more efficient setting and saving the Medicare program billions of dollars and we, as taxpayers, a lot of money. Am I missing something?

Kara Newbury:   9:39
Not exactly, no. To be fair, MedPAC has also indicated that they do not believe that using the inpatient hospital market basket is appropriate for hospital outpatient departments either. So, they're talking about cost reporting for ASCs, which would help establish maybe a new outpatient payment system. But why would ASCs, who are typically the smaller providers, be on the hook for providing all of this data that would then also be used for hospital outpatient departments? And of course, hospital outpatient departments provide a much broader range of services outside of surgical. So I don't think that that is the best solution either, although that has been kind of thrown around by MedPAC in the past.

Bill Prentice:   10:22
And we've also made the point in terms of trying to use cost reporting to set a payment for ASCs that it would be very problematic because you have so many small, single-specialty ASCs and then a variety of sizes of multi-specialty ASCs that there you'd end up boiling all those numbers together and ending up with a payment that's not right for anybody. And so that's something that I think we've tried to make that point to MedPAC in the past, it seems to have fallen on deaf ears. But it really seems like they're grasping for a solution to a problem that doesn't exist.

Kara Newbury:   10:59
Absolutely. And according to MedPAC's own data, the majority of facilities are single-specialty. And so to your point, Bill, a cardiology ASC is going to be vastly different from an ophthalmic ASC, from a GI facility, from an ortho facility. And then, of course, multi-specialty—you don't know which specialties are being performed at each ASC. So yes, it's not as simple as, for instance, dialysis facilities where presumably everybody is doing the same services.

Bill Prentice:   11:31
The other thing in looking at MedPAC and its mission to try and look at the Medicare program and payments and, again, we'll just focus in on our spot, they don't seem to be alarmed at the right things. For example, and I think you know this statistic better than me, but still the great majority of Medicare payments that go to ASCs go to a handful of procedure codes. So even though we are authorized to be reimbursed for thousands of different procedures on Medicare beneficiaries, what's the percentage last year for our top 10 codes?

Kara Newbury:   12:04
So for our top 10 codes, it represented about 55 percent of the volume. For our top 100 codes, the vast majority of which, I would say over 90 percent, of which have been on our fee schedule since the beginning, that's where 88 percent of the volume is. So, even though we're seeing all of these different procedures that are added to our ASC Covered Procedures List, we're not seeing that volume shift that we would expect, and we at ASCA attribute a lot of that due to the failures of the payment system.

Bill Prentice:   12:37
I find that fascinating that MedPAC is not concerned at all that the medical directors at CMS have said that thousands of different procedures can be performed in the lower-cost setting, and very few of them are. And instead, they are focused on things like cost reports and eliminating ASC updates.

Kara Newbury:   12:57
To be fair, they do mention in one or two sentences in the report, at least for the past couple of years, how a large percentage of our volume falls within a small number of codes. But you are correct. They don't take that next step and analyze and try to make recommendations for possible solutions. There are a couple of areas that we have been in more alignment with MedPAC over the years. We've been trying to get our device-intensive threshold dropped for years and we've been successful twice. And MedPAC was fairly supportive of those efforts when we talked to them previously. And then, of course, the alignment of the quality reporting systems between the ASC Quality Reporting Program and the hospital outpatient department Quality Reporting Program. MedPAC has also submitted comments to CMS and shown an interest in better alignment in the measures that are in those programs so that we can have a better comparison across the two sites of service for quality.

Bill Prentice:   13:56
And that's certainly somewhere where we're in agreement because that's something we've been asking for, we the ASC community, for a long time of CMS is to have greater harmonization of measures across settings, particularly surgical settings. So, you know, that's a fair point. Before we close, I want to get back to a point I made in my opening remarks and namely the makeup of MedPAC and its representative shortcomings. None of the current 17 members have firsthand experience in the operation of ambulatory surgery centers. And while there are seven physicians, I think, currently on the commission, most of them are not practicing clinicians, and not one of them so far as I know is a practicing surgeon. It seems to historically be that the commission kind of slants heavily towards academia and healthcare settings. So Kara, what, if anything, do we know about the future of the MedPAC commission and our efforts to try and get an infusion of at least one representative on the commission that has an understanding of our marketplace, and then hopefully can help to drive policy in a way that I think is gonna make more sense for the Medicare beneficiary and hopefully more sense in terms of driving care to the efficient setting?

Kara Newbury:   15:07
So for those of you listening to this podcast who are not aware, ASCA has for the past, well I've been at ASCA since 2011 and so it's been at least since, I think, 2013, that ASCA has put forth a nominee. At least one nominee for MedPAC, meaning that we have kind of helped that person through the process, we have helped gather their letters of recommendation, set up meetings with members of Congress, who can then also hopefully put in a good word on their nomination. Even for big players in the healthcare space, such as the hospital associations, it is hard to get nominees through. It typically takes several years. And as we all know, those who work in the ASC space typically are busy people and may not have the time or the inclination to go through that several years in a row. And then as you mentioned, there aren't really any active, practicing clinicians on MedPAC. There is a fairly significant time commitment during non-COVID times: the commissioners have to go into DC for three days a month, there's plenty of reading, as you know, because there are a lot of different payment systems over which they're making recommendations. So it is a significant time commitment, and often takes multiple bites at the apple to get appointed to the MedPAC commission. But ASCA will continue, of course, to try to promote candidates who we believe will offer a fresh perspective.

Bill Prentice:   16:37
That's good to hear. And for the listeners, I know that Kara and I sometimes sound a little bit exasperated when we talk about the MedPAC commission and some of its recommendations. But we do truly obviously believe it is an important body in terms of how they're able to provide that outside lens on the Medicare program and offer suggestions. We know that commissioners work really hard; we just think that obviously there's a perspective that's being lost here that having somebody with an experience from the ASC marketplace could provide that I think could really help the program and help the recommendations. Well, Kara, I think that's about all the time we have today. And I hope that our discussion has provided our listeners with a little bit of a better understanding of MedPAC and its decision-making process, and why we think it's so important to try and get a commissioner with some ASC experience. So Kara, thank you for spending a few minutes with me.

Kara Newbury:   17:30
Thanks, Bill.

Bill Prentice:   17:31
Well, I wish we had better news to report about the recommendations that MedPAC makes. I generally think that the state of play is largely due to that commission's lack of understanding the ASC marketplace, and that's something that I know that Kara and her team and many of the volunteers who work with us on our Government Affairs Committee and elsewhere are going to try and address, so I thank them for that. Before we close, I'd also like to thank the sponsor of our Advancing Surgical Care Podcast, in2itive Business Solutions, a revenue cycle management company that has served the ASC community for more than 10 years. So until next time, please wear a mask, practice social distancing, wash your hands and please make sure you get vaccinated as soon as you're eligible so we can stay safe and healthy. Thanks.