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Make Way for MacPAC, the New Kid on Washington's Health Policy Block

By John Reichard CQ HealthBeat Editor

July 30, 2010 – Medicaid, the state-federal health care program for low-income and disabled Americans, covers some 61 million people, making it significantly bigger than Medicare, which covers 47 million.

Medicare, with around $500 billion a year in outlays, still dwarfs Medicaid’s $340 billion, of which about $200 billion is federal money and $140 billion from the states.

With coverage expansion provisions in the health care law, however, Medicaid enrollment is expected to jump to 70 million or more in a few years, as eligibility for the program opens up in 2014 to Americans with incomes up to 133 percent of the federal poverty level.

Official Washington, with its careful attention to middle- and upper-class concerns, will always be a Medicare kind of town. The program covers not just poor Americans but middle-class and rich ones too. But with Medicaid expected to pump $400 billion more into the coffers of hospitals, doctors, nursing homes and other providers under the overhaul, the program will join Medicare at center stage in policymaking in coming years.

Under the overhaul, a new, permanent panel called the Medicaid and CHIP Payment and Access Commission, or “MacPAC”, will scrutinize whether payment levels are adequate to ensure access to quality care in the Medicaid program.

MacPAC, which will hold its first meeting Sept. 23 and 24, owes its creation to the 2009 law that reauthorized the Children’s Health Insurance Program (CHIP) until 2014. But until the overhaul provided actual funding, the panel existed only on paper.

MacPAC’s original charge was to look at the adequacy of payment levels in Medicaid and CHIP. With the overhaul, Sen. John D. Rockefeller IV, D-W.Va, championed the broader scope. The commission is important now “because of the tremendous changes that will be occurring in the scope of the Medicaid program for coverage as a result of health reform,” said Diane Rowland, MacPAC’s new chairwoman.

Through MacPAC, Rockefeller wanted to bring to Medicaid the same impartial analysis that the Medicare Payment Advisory Commission, called MedPAC, brings to Medicare. “Each of them are incredibly necessary, so that you take the decision-making and put it in the hands of professionals and take it out of the hands of Congress and the lobbyists,” he said.

In ways both large and small, MacPAC will be patterned after MedPAC. They both have staffs of around 30 and a yearly budget of $11million to $12 million. Like MedPAC, MacPAC plans monthly meetings, recorded public votes on recommendations, and reports to Congress in March and June each year. Starting work Aug. 2 as MacPAC’s new executive director is Lu Zawistowich, who previously served as MedPAC deputy director.

High Hopes
Advocates for Medicaid patients, hospitals, and nursing homes hail the panel’s creation and hope it improves Medicaid payment rates, which are often so dismally low that doctors turn away enrollees. Kathleen Stoll, deputy director at Families USA, said there has been “a lack of data and analysis that really looks at some of the payment issues and understands where we need to make some tweaks.”

Stoll also lauds the appointment of Rowland, who “knows Medicaid as well as anyone.” Rowland has served since 1991 as executive director of the Kaiser Commission on Medicaid and the Uninsured, which publishes research on Medicaid. Other appointees of the 17-member commission, such as George Washington University professor Sara Rosenbaum, are also highly regarded by advocates for Medicaid patients.

“This is going to be a group oriented to finding ways to maximize access,” predicts Chip Kahn, president of the Federation of American Hospitals. Higher Medicaid payments will be a bigger priority for hospitals since new enrollees are expected to be heavier users of hospital services.

The commission is also a big deal for nursing homes, which have long sought better analysis of Medicaid. “We certainly hope that it will lead to more accurate reimbursement,” said Reed Franklin, a lobbyist with the American Health Care Association.

But there are two areas — worries about the deficit and concerns about data — that raise questions about MacPAC’s influence. Gail Wilensky, who has served as administrator of Medicare and Medicaid chairman of MedPAC, notes that payment data is scattered across 50 states and may not be computerized.
Meanwhile, many Republicans continue to oppose Medicaid’s expansion. Senate GOP staffer Rodney Whitlock said MacPAC will be valuable if it pinpoints how payments can improve access — but not if it focuses on primarily better outreach to increase enrollment in a broken system states can ill afford.

But analysts across the political spectrum are happy at the prospect that MacPAC will bring better data analysis, whatever the challenges. “If there are access problems, we’re better off knowing it and figuring out how to improve access without spending more money,” Wilensky said.

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