On June 15, the Medicare Payment Advisory Commission (MedPAC) issued this report, offering recommendations for reforming Medicare’s payment system to improve quality and efficiency.  Among other recommendations, MedPAC suggests bundling payments for related health services and directly linking payments to health service quality.  The authors also offer recommendations for incentives to reduce excessive provision of health services under the current fee-for-service (FFS) reimbursement model.  Finally, MedPAC proposes improving dual eligibles’ care quality through more integrated and coordinated health services.

From the report:  

As part of its mandate from the Congress, each June the Commission reports on Medicare payment systems and on issues affecting the Medicare program, including changes in health care delivery and the market for health care services. In this report, we examine several issues within Medicare itself, including: 

• payments for physician services, with one chapter that considers alternatives to the sustainable growth rate (SGR) system and another on ways to improve payment accuracy and promote appropriate use of ancillary services;
• the design of Medicare’s traditional fee-for-service (FFS) benefit package and its impact on beneficiaries and the program overall; and 
• Medicare’s technical assistance to health care providers for quality improvement.

Full Report: Medicare and the Health Care Delivery System (PDF | 1.65 MB)

Medicare Payment Advisory Commission. (2011). Medicare and the health care delivery system.