Obama may use MedPAC to fast-track Medicare changes

President Obama is looking at making the recommendations made by the Medicare Payment Advisory Commission (MedPAC) each year easier to put into effect. In a letter to Sens. Edward Kennedy (D.-Mass.) and Max Baucus (D.-Mont.) sent June 2, Obama outlined several proposals to cut health care spending over the next 10 years, particularly in the Medicare program. 

In the letter, Obama wrote, "To identify and achieve additional savings, I am also open to your ideas about giving special consideration to the recommendations of the Medicare Payment Advisory Commission (MedPAC), a commission created by a Republican Congress. Under this approach, MedPAC's recommendations on cost reductions would be adopted unless opposed by a joint resolution of the Congress. This is similar to a process that has been used effectively by a commission charged with closing military bases, and could be a valuable tool to help achieve health care reform in a fiscally responsible way."

Sen. Jay Rockefeller (D.-W.V.) has introduced the "Medicare Payment Advisory Commission (MedPAC) Reform Act of 2009" (S 1110) that would make the commission an executive branch agency and give it more authority to implement its policy changes.

MedPAC was formed in 1997 as an advisory board to Congress. Each year it makes a report to Congress which lists detailed suggestions for changing Medicare payment policies. But the suggestions are just that -- members of Congress have to take those suggestions and include them in legislation for the suggestions to be implemented.

Under Rockefeller's legislation, MedPAC each year would determine payment rates for items and services provided by physicians and hospitals. The HHS Secretary would then promulgate regulations to put those payment changes into effect.