MedPAC Discusses Rural Emergency Hospitals, MA, and Software as Medical Service

The Medicare Payment Advisory Commission (MedPAC) met Nov. 2 and 3 to discuss a number of issues including Rural Emergency Hospitals, Medicare Advantage (MA), and Medicare coverage and payment of software as a medical service.  

In response to a congressionally mandated report on Rural Emergency Hospitals (REH), commission staff presented an analysis of the 17 hospitals that had completed conversions as of mid-October. In the analysis, it was found that all 17 of the hospitals were under significant financial pressure and faced the possibility of closure had they not converted to an REH. For converting, REHs are paid a set monthly amount, which is updated annually for inflation. The program is meant to reduce rural hospital closures, which are impacting rural populations’ access to care. The final report will be published in the MedPAC March 2024 Report to Congress. 

MedPAC analyzed and discussed favorable selection, network management, and prior authorization in MA plans. In the network management discussion, the commission considered characterizing MA plan provider networks, exploring the use of narrow networks, analyzing the utilization of out-of-network services, and examining MA networks in areas with distinctive market characteristics. For prior authorization, MedPAC discussed considering information that MA plans report to the Centers for Medicare & Medicaid Services and analyzing interactions between prior authorization and claims denials.  

MedPAC staff also discussed Medicare coverage and payment of software as a medical service. Commissioners provided initial feedback as software becomes increasingly prevalent in health care.