• Rockefeller's Proposes a New MedPAC to Focus on Delivery System Reform and Limit CMS' Role in Payment Policy
  • June 22, 2009
  • Law Firm: Epstein Becker & Green, P.C. - New York Office
  • Earlier this week Senator Rockefeller introduced a bill (S.1110) that would limit Congress’ involvement in Medicare payment policy. The proposed Medicare Payment and Access Commission (MedPAC) would replace the current MedPAC in order to provide the federal “infrastructure for delivery system reform”. If the bill was passed as part of health reform legislation, a 3/5th vote of the Members of the House of Representatives and the Senate would be needed to overrule the decisions of the new MedPAC.

    The new Commission would resemble the Federal Reserve’s Board of Governors in terms of the appointment process and policy making responsibilities, however, the actual operations of the Medicare program would continue to be managed by the Centers for Medicare and Medicaid Services (CMS). The new MedPAC’s 11 voting members would be full-time employees who are appointed by the President with the advice and consent of the Senate. The two non-voting members include the Secretary of Health and Human Services (HHS) and the CMS Administrator.

    The Commission would have ongoing responsibility for determining and evaluating payment rates as well as designing new payment systems. In addition, it would have sole authority to design and evaluate Medicare demonstration projects. To do their work, the Commission and its staff would have direct electronic access to Medicare claims data as well as access to reports from the Agency for Healthcare Research and Quality (AHRQ) and the National Institutes of Health (NIH), two agencies which received most of the recently approved $1.1 billion in federal funding for comparative effectiveness research. In addition, the work of the Commission would be informed by three advisory councils, including a Council of Health and Economic Advisors, a Consumer Advisory Council and a Federal Health Advisory Council. The HHS Secretary is charged with establishing ten regions from which the Comptroller General of the United States will choose a member to serve on each of two councils – the Consumer Advisory Council and the Federal Health Advisory Council.

    The Senate Finance Committee has discussed a series of wide ranging proposals to reform the Medicare payment system in order to “bend the curve” by reducing variations in medical practice which cannot be supported by medical evidence. The options include ideas such as creating new accountable care organizations (ACOs) and medical homes as well as the development of a new category of services designed to transition hospital patients to the appropriate post-acute provider. The hope is that better discharge planning and follow through will reduce the high rate (18%) of re-admissions within 30 days of discharge.

    The new MedPAC appears to address concerns that Senator Baucus raised at the confirmation hearing for William Corr, the deputy secretary of HHS. The Senator speculated whether CMS, despite good intentions, was up to the task of fundamental reforms for the Medicare program noting that “Some have suggested to me another outfit alongside (CMS) to do the design work… and that there are some very, very thoughtful people in health care who really, seriously, wonder if (CMS) is up to the job”. Rockefeller’s bill, which was introduced by Senate Majority Leader Harry Reid, indicates some support for the idea of focusing CMS’ role on operations while creating a new infrastructure to establish payment polices designed to reform how healthcare is delivered.