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The Medicare Payment Advisory Commission: Will It Matter Anymore?

By John Reichard, CQ HealthBeat Editor

May 14, 2010 -- At first glance, the health care overhaul law appears to deal a mortal blow to the venerable Medicare Payment Advisory Commission, which Congress created to ensure that Medicare pays the right amount and delivers decent care to the elderly.

Unhappy with the panel's limited impact on the entitlement program, Congress used the overhaul law to create a sleek, high-powered board that seemingly overshadows the oft-ignored "MedPAC."

The new entity, the Independent Payment Advisory Board (IPAB), was created to control the growth of Medicare spending. And its recommendations become law unless the House and the Senate each adopt, by a three-fifths majority, a resolution to block them. If the president vetoes the resolution, two-thirds of each chamber will have to vote to override the veto in order to block the recommendations.

But even as Congress endowed IPAB with such powers, it kept MedPAC firmly tucked in its back pocket, clearly unwilling to dump its long-time adviser. The language of the overhaul law (PL 111-148, PL 111-152) guarantees that MedPAC won't quickly fade into oblivion as IPAB starts staffing up late next year. But the overlapping functions of the two bodies have fueled confusion over whether they will compete, cooperate or merge.

Headed by chairman Glenn Hackbarth, MedPAC has sought in recent years to lead Congress away from what many analysts regard as bloated payments to Medicare's private health care plans.

Its analysts have pinpointed health care sectors, such as home care, where big increases in the number of providers signal that Medicare is paying too much.

Consistent MedPAC findings that, overall, seniors have reasonable access to doctors have allowed lawmakers to filter warnings from lobbyists that payments are becoming dangerously low.

And MedPAC has been coaxing Congress toward policies that foster more team-based care, reward higher quality and avoid wasteful care through "comparative effectiveness" research to identify which treatments work and which don't.

Love and Disdain
But MedPAC commissioners have learned over the years that Congress can react to its recommendations in sharply different and unpredictable ways — and that often it doesn't listen at all.

Gail Wilensky, who chaired the commission from 1997 to 2001, described the interaction with Capitol Hill as a "love-disdain" relationship. To illustrate the point, she laughingly recalled her annual briefings with former Ways and Means Chairman Bill Thomas, R-Calif. (1979-2007).

"Sometimes he seemed very angry with the recommendations that came out of MedPAC, and sometimes very enthusiastic," she said. ". . . I was trying to understand why that was, since we were doing our best to provide good, sound, unbiased advice on matters that they asked us to opine on. And he said, 'Well, when you recommend something that we want to hear, we're enthusiastic, and when you recommend something that we don't want to hear, we don't like it.' I laughed and said, 'Well, now that we have that clear, let me tell you what we're recommending.'"

Too often lawmakers turn a deaf ear because they are swayed by lobbyists and don't listen to analysts like those at MedPAC, said Sen. John D. Rockefeller IV. "The fact that they were good, but had no authority, made me move" to the IPAB model, said the West Virginia Democrat, who successfully championed the board in the health care overhaul.

Rockefeller said he largely views the two bodies as having the same review authority, but added that IPAB has power and MedPAC doesn't. "In the natural order of working these out, maybe MedPAC hangs around, maybe it doesn't," he said.

Tom Scully, who ran Medicare and Medicaid during the Bush administration, also sees MedPAC's future as uncertain. Most people assume that MedPAC will eventually be subsumed into IPAB, he noted. "But in the short term, Congress needs MedPAC," he said. "MedPAC is one of the few places that actually takes a long-term global look" at the health care system.

Still, MedPAC may be on much firmer ground than many believe. It has a wide research portfolio and a respected staff that carries it out. In addition, Congress wanted its own advisory group to review IPAB's recommendations — and gave that job in statute to MedPAC. There's also doubt whether IPAB will survive as power shifts in Congress in coming years, since many Republicans depict it as an instrument of rationing.

Wilensky, who ran Medicare under President George H.W. Bush, opposes IPAB, saying its members will be unaccountable. "I will not be surprised if it's blown out of the water," she said.

But Stuart Guterman, a former MedPAC deputy director and now a Commonwealth Fund vice president, said the two panels could work in tandem, given the need for analysis of the complex health care system. And IPAB could be the entity that gives MedPAC greater force by drawing on its work to make its own recommendations, he said.

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