How The President is Going to Cut Medicare Payments to Your Doctor and Force You to Pay More

October 14, 2016

This is the second installment of a four-part series on shadow organizations that effect on your healthcare.  Last week I talked about the Centers for Medicare & Medicaid Innovation (CMMI), this week I’m going to talk about the Medicare Payment Advisory Commission (MedPac).

MedPac was established by the 1997 Balanced Budget Act as an independent congressional advisory committee.  It advises Congress on Medicare payments to providers along with advice on access to care, quality of care, and other issues affecting Medicare.  There are two things that you need to know right up front; while MedPac is defined as independent, it is anything but and MedPac’s job is to reduce Medicare’s cost, either by cutting payments to providers or making patients pay more.

I’ll talk first about MedPac’s independence.  I always look first at who gets to choose the leader of an organization.  MedPac’s 17 commissioners are appointed by the Comptroller General of the Government Accountability Office (GAO).  The Comptroller General is selected by the President from a list given to him by a bipartisan, bicameral congressional commission which means that Republicans and Democrats from the House and the Senate each put forth names and the President chooses.  Let’s see how that worked for the last selection.  The Comptroller General of GAO resigned in March of 2008, about the same time that a new President was assuming office.  The new President selected the current Comptroller General who still serves.  The President got the guy who will choose the MedPac commissioners in place.

In order to pay for Obamacare, the President needed money from Medicare, about $700 billion dollars, and how could he get it?  The easiest way is to cut payments to providers . . . make it even more difficult for doctors and hospitals to survive on what Medicare pays and make the patients pay more.  That’s exactly what MedPac has done and continues to do.  The President controls who the MedPac commissioners are and they do his bidding.  Here’s some recent examples.

MedPac has continually focused on forcing doctors into a “one size fits all” payment model.  It looks at averages, both in treatment and cost, and makes recommendations to limit payments to the lowest cost alternative.  This puts payments in the middle of the doctor patient relationship.  In the Hill newspaper (a publication read by policy makers in Washington) Kenneth Thorpe said,

“The “least costly alternative” proposal is just one example of this issue. Patients will face the same challenge as CMS uses its current authority to pursue “bundled payment policy” that relies on rigid treatment protocols and care pathways to achieve savings. This policy operates on the same principle – assume treatments are equal on average and ignore wide variation in patient needs.”

MedPac was behind the recommendations for both the least costly alternative and bundled payments.  This approach goes against the trend in healthcare of personalized medicine that will save money by understanding the DNA, family history, and specific health issues of each patient and treating them accordingly.

It’s not just the doctors and providers that are being hurt.  MedPac also wants the patients to pay more.  In the most recent report issued by MedPac they recommended that patients who qualify for low income subsidies be forced to pay a higher cop-pay for their brand name medicine.  Here are the poorest among us, whose doctors have recommended a certain medicine, forced to pay more.  MedPac also recommended that the calculations for how long you will remain in the coverage gap (often called the donut hole) be changed such that many of you will stay in this high cost situation longer.  It is estimated that this calculation change will cost you $4.1 billion from now until 2020.  That’s $4.1 billion out of your pocket.

As you can see MedPac is a politically influenced, shadow organization that can have a huge impact on the cost, access and quality of your healthcare.  They give the administration the cover they need to pay your doctors and hospitals less while forcing you to pay more.  This isn’t what you deserve from your government.  We will continue to work to stop this MedPac proposal.

Look for our discussion of the third shadow organization, the Institute for Clinical and Economic Review (ICER), next week.



Thair Phillips – President