If Congress Can't Stand the Heat, Could MedPAC?
Call it an admission that Congress simply can't perform one of its most important duties—controlling the purse strings. That's the undertone of what President Obama was saying when he sent a letter to Sens. Max Baucus and Ted Kennedy proposing that MedPAC be empowered to determine Medicare reimbursement to providers. Though the letter covered many areas of the healthcare reform debate, it suggests that MedPAC be elevated to an executive-level agency, under which its recommendations would automatically be adopted unless opposed by a joint resolution of Congress.
While the move would raise troubling questions about the separation of powers under our Constitution, it would not be unprecedented. Obama cites the similarities of the proposal with Defense Base Closure and Realignment Commission, which was charged with determining which military bases to close over the past couple of decades. Under its watch, more than 350 bases have been closed since 1989 to save money on operations and maintenance.
Healthcare and the military don't have much in common on first glance, but the same issues that prevent members from making tough decisions on military bases that bring huge dollars to their congressional districts are also in operation in healthcare. Every member of Congress has a hospital or two in his or her district—not to mention dozens of other businesses that depend on Medicare's largesse. Seeing those hospitals close or seeing other businesses suffer because of payment cuts is politically unpopular.
So even if it no longer makes sense to provide a payment pool that keeps every hospital, physician practice or ancillary provider solvent, Congress has a tough time implementing these decisions. That's why every year they roll back many of MedPAC's toothless recommendations. However you feel about the annual double-digit physician reimbursement cut MedPAC suggests, Congress makes a mockery of the commission not only by rolling back the cut but also by annually increasing payments, generally by a small percentage.