Insights

On March 7, 2025, the Medicare Payment Advisory Commission (MedPAC) held the second day of the March 2025 meeting. The first session focused on examining home health care use by Medicare Advantage (MA) enrollees. The second session discussed institutional special needs plans (I-SNPs). Findings from these sessions will be reported to Congress as part of MedPAC’s June 2025 report.

EXAMINING HOME HEALTH CARE ON MA ENROLLEES

MedPAC staff examined home health care use among MA enrollees, comparing it to Fee-for-Service (FFS) beneficiaries. A key focus was assessing data completeness and identifying patterns of home health care utilization. Researchers combined MA encounter data with the Outcome and Assessment Information Set (OASIS) records with the goal to obtain a more comprehensive picture of usage. MedPAC staff reported that they did get a more comprehensive picture of usage; however, reporting remains incomplete. The study found that 8.5% of MA enrollees used home health care in 2021, with higher utilization among older adults, low-income individuals, and those with prior hospital stays.

On average, MA enrollees who received home health care had 18.2 visits per user. The study also found that plan characteristics influenced usage patterns, with those in preferred provider organization (PPO) plans receiving more visits per user than those in health maintenance organization (HMO) plans, while provider-sponsored plans were associated with fewer visits. Additionally, cost-sharing played a role—MA plans requiring out-of-pocket payments for home health care saw lower utilization rates. When compared to FFS, MA enrollees were less likely to use home health care following hospitalization and, on average, received fewer visits. Even when controlling for provider differences, these trends remained unchanged. MedPAC staff acknowledged that the study had some limitations, including variations in data completeness across counties and the exclusion of in-home services provided outside the Medicare home health benefit. Moreover, they noted it was not possible to determine the appropriate level of home health use for beneficiaries. Moving forward, MedPAC staff noted these findings will provide insights into post-acute care trends within MA. MedPAC Commissioners raised several key points regarding the analysis of home health care use in MA. Commissioners highlighted the challenge of determining an optimal level of care, noting the common quality issues in home health. Others inquired about the availability of more recent data beyond 2021 and whether the study could explore reasons for home health use. Commissioner Lynn Barr questioned whether costs were being shifted to beneficiaries and whether rural and urban areas were analyzed separately, given the higher costs of care delivery in rural regions. MedPAC staff indicated some uncertainty about whether it was reflected in claims. However, rural and urban areas were examined separately. Others addressed concerns about data completeness, particularly regarding claims records and prior authorization requirements, asking if denials were documented.

Commissioners emphasized the importance of clearly distinguishing the differences between MA and FFS home health use. Commissioner Gina Upchurch built on this by seeking insights into the types of providers delivering home care and the perceived quality of care among MA beneficiaries. Others raised concerns regarding discrepancies in OASIS data and variations at the county level, while others highlighted the distinction between post-acute and home health services, questioning why some required OASIS submissions were missing.

Commissioner Kenny Kan suggested expanding research into long-term care and site neutrality, noting that encounter data remains the least complete. Commissioner Robert Cherry highlighted that MA patients had a 6% higher utilization rate, and findings suggested that those without prior hospital stays might experience greater equity in access to care. Commissioner Scott Sarran said he saw no evidence that MA plans were inappropriately reducing care but acknowledged the complexities of decision-making in the system. Finally, Commissioners expressed support for continuing this research, reinforcing its importance in understanding MA’s role in home health services.

INSTITUTIONAL SPECIAL NEEDS PLANS

The second presentation from MedPAC staff focused on I-SNPs, and how these specialized MA plans for beneficiaries requiring nursing home-level care compare and contrast with other plans. MedPAC Staff noted that Commissioners previously expressed interest in examining the experiences of long-stay nursing home residents and evaluating whether private health plans, like I-SNPs, could provide better care than traditional Medicare. I-SNPs serve a relatively small market, with about 125,000 enrollees in 2024, covering roughly 12% of long-stay nursing home residents.

The presentation highlighted that only 26% of nursing homes participated in an I-SNP in 2023, with participation more common among larger, for-profit, and urban facilities. Payment structures for these plans typically include capitated payments and performance-based incentives. Demographically, I-SNP enrollees tend to have longer stays and have lower mortality rates than residents who did not enroll. Additionally, I-SNP enrollees are more likely to be black, live in urban areas, and be Medicaid-eligible compared with other long-stay residents. MedPAC Staff noted that data on quality suggested that nursing homes with I-SNPs performed better in reducing acute discharges, readmissions, and emergency department visits. However, these findings were subject to limitations in risk adjustment and data exclusions.

MedPAC staff also noted that existing research on I-SNPs is limited but indicates that these plans can reduce inpatient hospital use by shifting care to nursing homes. Compared to other Medicare plan options, MedPAC staff found that I-SNPs have higher costs and bid amounts due to the high medical needs of enrollees, yet they receive lower rebates. The research also reviewed alternative models such as Dual-Eligible Special Needs Plans (D-SNPs), Medicare-Medicaid Plans (MMPs), and the Program of All-Inclusive Care for the Elderly (PACE), noting that each of these plans coordinates with Medicaid, unlike I-SNPs. Looking ahead, MedPAC plans to explore additional Medicare efforts to improve care for long-stay nursing home residents and will include an informational chapter in its June 2025 report to Congress.

MedPAC Commissioners discussed several key aspects of I-SNPs, including enrollment patterns, care quality, and potential improvements to the model. Commissioners raised questions about how patients enroll in I-SNPs compared to other plans. Others highlighted the advantage of having nurse practitioners provide care in nursing homes but expressed concerns about their employment structure and overall care quality.

There was also an emphasis from some Commissioners on the need to improve care for this vulnerable population. Commissioner Stacie Dusetzina requested additional information on the economics of nursing home care, including eligibility criteria and access. Commissioner R. Tamara Konetzka also questioned how to make the I-SNP model more widely adopted. There was common support for the concept of integrated care and exploring alternative models.

Commissioners emphasized the overlap between I-SNPs and skilled nursing facilities, highlighting the need to understand better the services provided. Commissioner Betty Rambur added that while I-SNPs help reduce hospitalizations and turnover, a major challenge lies in training future professionals, as many students do not view this field as a long-term career option. She praised the PACE model, which serves 300 nursing home-eligible individuals, stressing the importance of a team-based approach with pharmacists and nurses, as successfully implemented in Vermont and Minnesota. Commissioner Lynn Barr suggested a comparative analysis of I-SNPs, D-SNPs, and PACE to assess patient experiences and financial structures. Building on this discussion, Chairman Michael Chernew pointed to a broader challenge— determining when and how to separate these programs, given their shared focus on institutionalized beneficiaries.

On March 6, 2025, the Medicare Payment Advisory Commission (MedPAC) met to discuss work for their June 2025 report and beyond. The June report contains recommendations and research on the future of Medicare and is usually filled with new ideas and innovations.

PHYSICIAN PAYMENT FORMULA

The first session of the day focused on reforming updates to and ensuring accuracy of the Medicare physician fee schedule. Staff reviewed previous recommendations that the fee schedule should be updated by MEI minus 1% and discussed the limitations of this approach. They also outlined how the payment system updates are diverging between those physicians participating in quality payment models and those who are not. Notably, those in advanced alternative payment models (A-APMs) will recieve progressively higher update over time as compared to those not in A-APMs.

Commissioners then discussed a draft recommendation for creating a new physician update formula based on “portion” of MEI. However, while Commissioners liked the draft recommendation, they were very concerned that the recommendation did not include a minimum or maximum limit on the amount of the payment update.

They stated that MEI can be volatile, especially in the economy right now, and that they would want some boundaries on the update.

Commissioners then discussed improving the accuracy of physician payment rates. Physician relative value units (RVUs) are used as weights to determine overall Medicare payments for a physician service. Staff went through analysis showing how those codes have become misvalued over time. Staff also discussed that RVUs are calculated through work done by the American Medical Association’s RVS Update Committee (RUC), but that work could lead to some inaccuracies. Staff pointed out that MedPAC has twice recommended that CMS should have a panel to review recommendations from the RUC on physician RVUs.

Staff then presented three examples of potential areas of inaccuracy in RVUs, focusing on the outdated MEI used to update RVUs; the need to update global surgical codes to truly address care practices; and inaccuracy in practice expense (PE) RVUs. In the PE RVUs, staff showed that a significant number of physicians no longer have offices outside of the hospital so indirect PE payments might need to be suspended for these types of physicians.

The draft recommendation said that, “Congress should direct the HHS secretary to improve the accuracy of relative payment rates for clinician services by updated costs data regularly, and ensuring the methodology used to determine payment rates for different services reflects the settings in which clinicians practice medicine.” While Commissioners supported this recommendation, they were concerned that it was too vague and did not focus on specific problems with the global surgical bundle and indirect PE.

These recommendations will be reworked based on Commissioner feedback and brought back for a vote in the April meeting. This will be a chapter in MedPAC’s June Report to Congress.

REDUCING BENEFICIARY COST SHARING FOR OUTPATIENT SERVICES AT CRITICAL ACCESS HOSPITALS (CAHS)

In the second session, staff reviewed work from the September 2024 and January 2025 meetings on this subject, highlighting the disproportionate share of costs beneficiaries bear if they go to CAHs for outpatient services. Staff updated their analysis showing that over half of CAHs FFS Medicare total outpatient payments are from beneficiary copayments.

Staff proposed a final recommendation stating, “For Medicare HHS beneficiaries, the Congress should:

• Set coinsurance for outpatient services at critical access hospitals equal to 20 percent of the payment amount for services that require cost sharing; and
• Place a cap on critical access hospital outpatient coinsurance equal to the inpatient deductible.”

Discussion was minimal as this was the third time Commissioners had seen the data and had seen the draft recommendation in January 2025. The recommendation passed unanimously on a 17-0 vote.

MEDICARE INSURANCE AGENTS

In the third session of the day, Commissioners heard findings from preliminary work being done on insurance agents/brokers for Medicare Advantage and Medigap plans. Staff outlined their findings on how beneficiaries enroll in Medicare, how agents market to beneficiaries, how agents are compensated, and outlines from concerns regarding agent practices and staff data limitations in this area.

Staff also reviewed the methods for marketing to beneficiaries, from referrals to purchasing lead lists to contracting with marketing organizations to create lead generation. Staff also outlined that agents are not required to present all plan choices to beneficiaries and reviewed agent compensation based on beneficiary enrollment. While CMS has safeguards in place like ceilings like the fair market value and lower compensation levels set for reenrollment, it was still found that agents have a financial incentive to enroll beneficiaries in MAPD plans over stand-alone PDP plans, and higher-premium Medigap plans vs. lower premium.

Staff then outlined next steps on analytics for the future including focus groups, interviews with SHIP counselors, data analytics, and review of the Medicare Plan Finder website. Commissioner Brian Miller expressed frustration with the tone of the discussion, stating that beneficiaries are smart and do not need help enrolling in Medicare. Commissioner Gina Upchurch summarized most other Commissioner’s opinions well – saying that everyone created a Medicare system that was way too complex, so enrolling in Medicare is harder for beneficiaries than enrolling in any employer group health plan. Commissioners also stressed the need for more transparency in the plan data, broker compensation, and choices for beneficiaries. Commissioners all said they loved these initial findings and were excited to continue the work.

Staff said this is their first foray in this area, and that this work would continue into the 2025-2026 cycle next year.

PRELIMINARY WORK ON MEDIGAP

In the fourth session, staff reviewed initial work on Medigap plans. Medigap plans are supplemental insurance plans that wrap around traditional Medicare FFS and provide out-of-pocket protection for beneficiaries. Beneficiaries have many avenues of supplemental coverage from Medigap to Medicare Advantage or employer-sponsored insurance.

Staff then reviewed the characteristics of Medigap enrollees, their geography dispersion, plan types, enrollment, premiums, and consumer protection. They also presented a breakdown of Medigap premium variation across states. Staff then outlined future work on beneficiary focus groups, market trends and the role of state guaranteed-issue policies on the Medigap market.

Commissioners had a lot of questions about Medigap – asking why there are no enrollment files, why is there such variation in pricing, why do we have no consumer data, etc. Chairman Michael Chernew summarized everything by saying that the Commission needed to look further into benefit design, price variation, consumer choice, and MA competition.

PAYMENT FOR GROUND AMBULANCE SERVICES

In the last session of the day, staff reported out preliminary findings on a Congressionally mandated report on ground ambulances. The Congressional mandate requires that MedPAC look at:

• Ground Ambulance Data Collection System (GADCS) data
• Analyze the burden on ambulance organizations from this data collection
• Provider recommendations to determine whether ambulance organizations should continue to have to submit this data.

Staff provided background on the Medicare ambulance fee schedule (AFS), payment for mileage, payments for services, the GADCS. Staff also provided a preliminary read out of the data within the GADCS. Staff also broke out the cost per response based on ownership and service area location.

Staff then broke down their future workplan and asked for Commissioner input.

Commissioners discussed the cost difference between rural and urban, with Commissioner Lynn Barr saying she was struck by the cost difference, especially considering that rural response is so much more expensive but it is only paid about 1% more than urban. Commissioners asked for additional analysis based on ownership, what happens for those responses that do not require transport, and responder proportion between BLS (Basic life support), ALS (Advanced Life Support), and ACLS (Advanced Cardiac Life Support).

Staff will be digging into these and other questions in the 2025-2026 MedPAC work cycle.

On March 6, 2025, the Senate Committee on Health, Education, Labor, and Pensions (HELP) held a confirmation hearing to consider the nomination of Dr. Martin Makary to be the Commissioner of the Food and Drug Administration (FDA). The hearing touched on several topics, including the FDA’s advisory committee on vaccines, the regulation of Mifepristone, prescription drugs/medical devices, and the impact of layoffs within the agency. The HELP Committee has scheduled an Executive Session on March 13 to consider Dr. Makary’s nomination.

WITNESS TESTIMONY

• Dr. Martin Makary

OPENING STATEMENTS

• Senate HELP Committee Chair Bill Cassidy (R-LA)
• Senate HELP Committee Ranking Member Sanders (I-VT)

MEMBER DISCUSSION

Vaccines and Related Biological Products Advisory Committee (VRBPAC)

ne of the most frequently mentioned topics during member questioning was the decision by the Trump administration to cancel a March 13 meeting of the VRBPAC to discuss which strains of influenza to include in the vaccine ahead of the next flu season. Senators who questioned Dr. Makary on this topic wanted to know his thoughts about the decision and whether he would reschedule the meeting. Dr. Makary said he was not involved in the decision to cancel the meeting but would look into it if confirmed. In response to a question from Sen. Patty Murray (D-WA), Dr. Makary said he would reevaluate the topics of those meetings. In response to a question from Sen. Susan Collins (R-ME), Dr. Makary said VRBPAC will be meeting if he is confirmed. Sen. Tammy Baldwin (D-WI) expressed her concerns that Health and Human Services (HHS) Sec. Kennedy may be planning to replace current experts on VRBPAC with vaccine skeptics. Dr. Makary said he was unsure what she was referring to but had no preconceived plans to rearrange any advisory committees. Additionally, he committed to maintaining scientific integrity on committees and receiving independent input from outside experts.

Mifepristone

The subject of how the FDA regulates Mifepristone, which is used to end early pregnancies, was another topic featured in the hearing. Republicans who mentioned it expressed concerns that changes made during the Biden administration to ensure easier access to the drug did not take women’s safety into account, and Sen. Josh Hawley (R-MO) accused the Biden administration of making these changes because of its pro-choice stance. Democrats such as Sen. Maggie Hassan (D-NH) countered by saying there was overwhelming evidence that the drug is safe and effective. Ultimately. Dr. Makary expressed his views that he was not coming in with any preconceived ideas about the drug but that he intended to follow the data and that he would be submitting the drug to the requirements under the risk evaluation and mitigation strategies program.

Prescription Drugs and Medical Devices

Unsurprisingly, topics surrounding the regulation of prescription drugs and medical devices came up a lot during the hearing. Regarding prescription drugs, Senators Collins, Hassan, and others brought up their interest in working with the FDA to increase the availability of generic medications. Dr. Makary expressed his support for working with Senators on this point. Dr. Makary also noted on several occasions his desire to find ways to speed up the timeline in terms of access to both therapeutics and medical devices in a safe way. For example, in response to a question from Sen. Lisa Murkowski (R-AK) about the FDA’s approval process for ALS treatments, Dr. Makary expressed his views that regulatory decisions about the approval of treatments at the FDA should be tailored to account for the specific disease. Sen. Lisa Blunt Rochester (D-DE) also raised her concerns about drug shortages, especially how they affect children’s hospitals. She asked Dr. Makary if he thought the FDA should take a leading role in addressing drug shortages. He said they should take a role but it’s bigger than the FDA. Regarding medical devices, Sen. Tim Kaine (D-VA) asked about using user fees from the medical device industry to fund post-approval surveillance. Sen. Jim Banks (R-IN) also asked about giving patients the option for non-paper instructions for medical devices. In his response to both questions, Dr. Makary noted that those were decisions that Congress would have to make but that he would be happy to work with Congress on these policy questions.

FDA Layoffs

Several Senators also expressed concerns about the impact of FDA staff layoffs on the agency’s ability to f ulfill it s mission. Senators raised specific concerns about how layoffs could impact food safety inspections, drug approvals, and tobacco product regulation. Additionally, there were questions about the logic of cutting FDA staff to save taxpayer money for positions funded by user fees. Dr. Makary was also asked by Senators on both sides of the aisle if he would be responsible for staffing decisions if confirmed as FDA Commissioner. He said he would but would be happy to accept feedback from members of Congress and the administration. He also committed to initial and ongoing reviews of the staffing needs of the FDA.

On March 5, 2025, the Senate Help, Education, Labor, and Pensions (HELP) Committee held a hearing on the nomination of Dr. Jayanta Bhattacharya to serve as Director of the National Institutes of Health (NIH).