The Medicare Payment Advisory Commission (MedPAC), Washington, has released its June 2009 Report to the Congress: Improving Incentives in the Medicare Program.

The report focuses on how incentives in the Medicare payment systems could be changed to strengthen the Medicare program and promote quality care for Medicare beneficiaries, according to a statement issued by MedPAC.

Medicare must change the way it pays health care providers to achieve better care coordination and efficiency, Glenn Hackbarth, the Commission’s chair, says in the statement. Incentives in effect today reward volume instead of value, and costly care instead of efficient, effective care, he added.

The Commission report notes opportunities for modifying incentives to change the way care is delivered in the Medicare program:

• Graduate medical education: Medicare is the largest financial supporter of graduate medical education. The report reviews medical education and residency training programs and reflects the Commission’s discussions of possible ways to use graduate medical education to better support the future needs of the Medicare program by promoting coordinated care, quality improvement, and judicious use of resources.

• Accountable care organizations: Current incentives in traditional Medicare reward volume and discourage coordination among providers. The report explores how accountable care organizations (ACOs) could promote care coordination and potentially increase quality and
lower cost growth.

The report also fulfills two of the Commission’s mandated reports to the Congress, both required by the Medicare Improvement for Patients and Providers Act of 2008:

• Medicare Advantage payments: MedPAC reports on different approaches to reforming Medicare Advantage payment. Under the current system, in 2009 Medicare is paying about $12 billion more for the beneficiaries enrolled in MA plans than it would have spent if they were in
FFS Medicare. The report discusses options that encourage efficient plans and reward quality.

• Chronic care management: The report describes the current the state of Medicare’s demonstration research on care management for beneficiaries with chronic conditions, including the impacts of these care management programs on quality and costs in Medicare. MedPAC
found that although managing chronic conditions is crucial to constraining costs, and that many such programs have shown improvements in quality, attempts to produce cost savings have been less successful. The report discusses strategies that may enable the Medicare program to accomplish this cost saving goal more effectively.

The 17-member Medicare Payment Advisory Commission is an independent Congressional advisory body charged with providing policy analysis and advice concerning the Medicare program and other aspects of the health care system.

[Source: Medicare Payment Advisory Commission]