Obama administration proposes big changes in Medicare payment oversight

Jul 16 2009

Determined to cut Medicare costs, the White House unveiled a plan that would shift much of the power over Medicare payment rates from Congress to the executive branch.

Politico reports: "After weeks of talk, the White House began circulating draft legislation Wednesday spelling out President Barack Obama's proposal that Congress surrender much of its authority over payment rates for Medicare to a new executive agency. The proposed five-member Independent Medicare Advisory Council would be charged with making two annual reports dictating updated rates for Medicare providers including physicians, hospitals, skilled nursing facilities, home health and durable medical equipment. Congress could block the recommendations only if lawmakers agreed within 30 days on a resolution, and the greater veto power would lie with the White House itself."

"The current Medicare Payment Advisory Commission, or MedPAC, established in 1997, already serves to make recommendation to Congress on Medicare spending. Many of its ideas have been incorporated in the current health reform bill, but MedPAC is only advisory and critics contend that the current system is too rife with politics and special interests."

Politico continues on the White House draft: "the new council would be appointed by the president with the consent of the Senate; those confirmed would serve terms of five years and would typically be physicians or have specialized expertise in health policy. ... The council would be authorized to make broad recommendations for reform in Medicare, but its chief role would be to help set payment rates for Part A and Part B services for the elderly" (Rogers, 7/15).

The Washington Post describes how Obama is "pressing lawmakers to give up one of their most valued perks of office: boosting Medicare payments to benefit hometown providers. Setting reimbursement rates for local hospitals, doctors, home health-care centers and other providers is a legislative ritual that amounts to one of the most effective and lucrative forms of constituent service. Delivering federal money through Medicare, the country's largest insurance program, can be a powerful tool on the campaign trail, allowing lawmakers to argue that they are creating jobs and improving the quality of health care for voters."

The paper also reports that "White House Chief of Staff Rahm Emanuel called the Medicare payment debate 'the least talked-about, most important issue on the table.' ... House Democrats' health-care proposal, released Tuesday, includes no measures aimed at reversing the long-term cost trajectory of Medicare."

While the Independent Medicare Advisory Council was one recommendation, another "would empower the Medicare Payment Advisory Commission (MedPAC), a nonpartisan body of health-care experts that serves Congress in an advisory role, to determine cuts and changes to Medicare, akin to the Federal Reserve Board" (Murray, 7/16).

Meanwhile, the Washington Times personalizes the issue of Medicare inefficiencies by reporting on the efforts of Woodrow Wilcox, a senior citizens advocate in Indiana who helps seniors fight off collection agencies that are wrongly pursuing unpaid bills. Wilcox "wants the government to fix existing problems with Medicare billing before adding more people to government-run health care programs" and believes that "Washington shouldn't be tinkering with health care at all until it finds a way to stop going after seniors for bills they don't owe under Medicare" (Carpenter, 7/16).