MedPAC’s June Report Expands on Proposed Ratings System of Rewards and Penalties

The Medicare Payment Advisory Commission (MedPAC) in its June report to Congress unveiled new details about its proposal to revamp the current system of awarding highly rated Medicare Advantage plans with quality bonuses. MedPAC presented two possible ways the proposed MA value incentive program (MA-VIP) introduced in last year’s report would reward — and penalize — plans based on a stripped-down set of population-based performance measures.

Similar to the way Medicare-Medicaid Plans are paid in the CMS Financial Alignment Initiative, the MA-VIP could involve a payment withhold of 2% of plans’ total payments to fund a shared pool. Payments would be reduced for the year in which plan performance is assessed, and the withheld funding would be redistributed based on quality scores and sent to plans in a lump sum. Plans that received less than the original percent withheld would essentially be paying a penalty, while those receiving payments that are larger would be rewarded, MedPAC explained.

© 2021 MMIT

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues, including drug benefits and specialty pharmacy, for more than a decade. She served as editor of Drug Benefit News (the predecessor to Radar on Drug Benefits) from 2004 to 2005 and again from 2011 to 2016, and now manages Radar on Medicare Advantage. Lauren graduated from Vassar College with a B.A. in English.

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