Medicare Payment Advisory Commission (MedPAC)

Medicare Payment Advisory Commission, often shortened to MedPAC, is a non-partisan, independent congressional agency charged with advising the United States Congress on issues affecting the Medicare program.

To go more in depth and to keep it simple at the same time, let’s go through some detail about MedPAC: what it is, what it does, and why you should care about it:

  • What it is: A non-partisan, independent congressional agency called the Medicare Payment Advisory Commission (which is shortened to MedPAC for convenience)
  • What it does: MedPAC’s purpose is to advise the United States Congress on issues affecting the Medicare program.
  • To this end, the commission:
    • o Analyzes the performance of the Medicare program and makes recommendations to congress on:
      • Payment policies and rates for healthcare providers (e.g. hospitals, physicians, skilled nursing facilities, hospice, etc.) that are paid by Medicare.
      • Access to care issues for Medicare beneficiaries.
      • Quality of care in the Medicare program.
      • Other issues affecting the Medicare program, including how it interacts with other payers such as Medicaid, and private insurance.

Key Characteristics

  • Independent and Non-Partisan: As an advisory body, it does not have rulemaking authority; it does not set policy or make regulations, it merely makes recommendations to Congress.
  • Its 17 Commissioners are appointed to staggered 3 year terms by the Comptroller General and are chosen based on their expertise in health finance, delivery, and policy. These appointment rules are designed to help insulate MedPAC from short term political pressures.
  • Analytical and Data-Driven: The Commission is staffed by a group of professional analysts who perform original research and analysis and who are also in charge of sifting through existing research and reports to inform their work.
  • Advisory Role: It has no formal power to require Congress to do anything with its advice, recommendations, or reports. However, because of its reputation and the credibility of its work, Congress often takes its advice very seriously and legislation is often directly based on MedPAC’s recommendations.

Key Outputs and Function

  • Twice-Yearly Reports (March and June): The two big products it produces for Congress are these two reports. The March report contains MedPAC’s recommendations for changes to Medicare payment policies.
  • The June report addresses issues that are affecting the Medicare program more broadly and often contains data and analysis on healthcare spending and beneficiary access to care.
  • Public Meetings: The Commission meets in public to discuss the analyses it has performed and to discuss and vote on the final recommendations that it will make to Congress.
  • Comment Letters and Testimony: MedPAC staff regularly appear before congressional committees to give testimony and also frequently write letters to comment on proposed rule changes from the Centers for Medicare & Medicaid Services (CMS).

Examples of MedPAC's Work in Action

MedPAC has had a direct and major influence on the creation and implementation of Medicare policies. For example, Congress has enacted many of its recommendations, such as:

  • The Hospital Readmissions Reduction Program.
  • Changes to the physician fee schedule.
  • Payment reform in post-acute care (e.g. skilled nursing facilities and home health).
  • Yearly analysis of the payments in Medicare Advantage (Part C) versus Traditional Medicare and the value that Medicare Advantage plans provide.

What MedPAC Is NOT

  • It is not CMS: MedPAC does not actually run or administer the Medicare program. That is the responsibility of the Centers for Medicare & Medicaid Services (CMS), part of the executive branch of the federal government.
  • It is not a lobbying group: MedPAC does not take the side of any particular stakeholder in the Medicare program, like providers, beneficiaries, or insurance companies. Its stated mission is to provide independent advice to Congress for the betterment of the program and its beneficiaries as a whole.
  • It does not have legislative authority: MedPAC cannot make laws or regulations. It can only make recommendations to Congress.

Summary

MedPAC is the independent congressional agency that provides non-partisan data analysis and policy recommendations to Congress to help them make decisions on how to best move forward with the Medicare program, with a focus on payment, access, and quality.