Obama Embraces Rockefeller’s MedPAC Proposal

rockefellerobamaDuring yesterday’s meeting with HELP and Senate Finance Committee members, President Obama expressed support for Sen. John Rockefeller’s (D-WV) legislation to transform MedPac — an independent agency advising Congress on issues affecting the Medicare program — into an independent executive agency. Here is how Rockefeller introduced his legislation last month:

Congress has proven itself to be inefficient and inconsistent in making decisions about provider reimbursement under Medicare. If we want serious improvements in our health care delivery system, then we need to reform MedPAC’s current authority to include fully establishing and implementing Medicare reimbursement rules. Congress should leave the reimbursement rules to the independent health care experts.

By giving MedPAC the power to implement its recommendations and revamping the board into an independent “but democratically accountable organization not unlike the Federal Reserve Board,” Rockefeller is freeing the panel from the constraints of congressional politics and allowing it to actually influence Medicare spending patterns. The goal is to adopt reforms that slow the growth of Medicare spending and modify payment methods — reforms that the private sector could then emulate.

MedPAC’s recommendations have synced well with the general tenor of cost-containment options. Here are just some of its proposals:

– Medicare change payment system incentives by basing a portion of provider payment on the quality of care they provide and recommended that the Congress establish a quality incentive for providers.

– Charge an independent entity to sponsor credible research on comparative effectiveness of health care services and disseminate this information to patients, providers, and public and private payers.

– Reducing preventable readmissions, increasing the use of bundled payments…

Over the last decade, Medicare has led the way in developing prospective payment systems — paying fixed payments on what efficient providers could be expected to do rather than on what they actually did — and bundling payments for certain conditions and treatments. Private insurers have systematically adopted Medicare’s efficiencies and Rockefeller believes that by giving MedPAC recommendations some teeth, we can first improve Medicare efficiency and also lower health care spending across the entire health care system.

Ezra Klein is reporting that the White House is also considering variant of the Rockefeller proposal. “This plan would package MedPAC’s yearly recommendation and fast track them through Congress for a simple, up-or-down vote. No filibuster. No changes to the package of recommendations. Health reform, under this scenario, would become a yearly legislative project,” Klein writes.

Both variations have merit — after all, why should we hold payment and efficiency reform hostage to the whims of politics/Congress? why not let independent experts make the decision? But as Jonathan Cohn notes, “In practice, controlling costs invites a lot political opposition. It means taking money out of somebody’s pockets–insurers, hospitals, device makers, etc. ”