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Medicare Payment Coalition Defines Payment Reform Agenda and Shapes Next-Stage Policy Research
The Medicare Payment Coalition for Frail Beneficiaries (MPCFB) met January 30 to review
the final report on first-phase analysis of the M+C risk adjustment models being considered by
HCFA and related policy recommendations regarding payment reform. An important conclusion from
the research is that no single risk adjustment method is likely to pay adequately for the
highest-cost beneficiaries. Complementary payment methods such as carve-outs for certain
high-cost conditions and high-risk pools for plans with large concentrations of frail/disabled
must also be explored. The MPCFB adopted a three-phase strategy for improving payment that
includes:
- hold-harmless measures for Medicare frail elderly demos and specialized programs for institutionalized beneficiaries,
- transitional payment methods for specialized plans serving a disproportionate number of high-cost enrollees, and
- continued research to refine M+C payment methods for high-cost beneficiaries.
The Medicare Payment Coalition reviewed a refined legislative proposal during a follow-up
conference call, and staff have begun "vetting" this proposal with Hill staff. Next steps
on research include a white paper on concurrent risk adjustments, based on an analysis of
dually eligible data; focus groups with the risk-adjustment developers to help identify
frailty markers; and an expansion and refinement of the MPCFB database. A meeting highlight
included an update on HCFA's M+C payment research from Leslie Greenwald, director of payment
research for HCFA's Division of Research and Evaluation. HCFA continues to focus primarily
on establishing an overall payment methodology for all M+C plans, with preliminary research
begun on frail beneficiaries.
HCFA acknowledges that current payment methods underpay for the high-end frail population
and is looking for frailty markers to improve risk adjustment such as predictors of death
that explain high end-of-life costs.
Dr. Greenwald also indicated that HCFA needs data that explains higher costs for functionally
impaired, and the MPCFB has agreed to help provide supportive information through plan data
and/or focus groups. HCFA also agreed to direct its risk adjustment developers to work with
the MPCFB in refining payment methods for frail beneficiaries.
