MedPAC suggests fee-for-service reform
Article Thumbnail ImageJune 19, 2012 -- The Medicare Payment Advisory Commission (MedPAC) has recommended reforms to Medicare's fee-for-service benefit package in its June 2012 report to Congress on the Medicare and health delivery system.
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In the report, the commission suggests changes to Medicare's benefit design to give beneficiaries better protection against high out-of-pocket spending and to create incentives for them to make better decisions about their use of discretionary care, MedPAC said. The package of reforms would include a cap on beneficiary out-of-pocket spending, a deductible, and a schedule of co-payments for services to allow beneficiaries to anticipate their costs for the medical care they receive.

MedPAC is recommending that Congress develop and implement a fee-for-service design that would replace the current one and would include, among other items:

  • An out-of-pocket maximum
  • Deductibles for Part A and Part B services
  • Replacing co-insurance with co-payments that may vary by type of service and provider
  • No change in beneficiaries' aggregate cost-sharing liability
  • An additional charge on supplemental insurance

MedPAC is also recommending reforms in the program's care coordination for fee-for-service, stressing models to improve care coordination that create incentives for doctors to provide better rather than more care, and using payment reforms such as bundling and accountable care organizations (ACOs), according to the report.