Medicare Compliance & Reimbursement

Question: I’ve seen a lot of “MedPAC says this” and “MedPAC says that,” but I don’t actually know what MedPAC is or what the organization does. Is it a government agency? How does it affect Medicare payments? Does the regulatory advice it issues make a difference to healthcare providers and facilities?

New Mexico Subscriber

Answer: What the Medicare Payment Advisory Commission (MedPAC) does and how it impacts your Medicare reimbursement is complex. However, understanding how the Commission operates and reviews its output and advice can be important tools for predicting future federal rulemaking.

First, MedPAC reports to Congress, offering recommendations on a variety of issues from provider reimbursement and services to regulatory reform and policy related to fee-for-service Medicare, Medicare Advantage, and Medicare Part D — but it is also an independent agency and not subject to congressional whims. MedPAC consists of 17 commissioners, who are appointed for three-year terms over staggered periods. The appointees come from myriad backgrounds related to the healthcare industry, ranging from academia to the delivery of services to the financial backend of the field.

Second, using analysis, collected data, and past rulemaking, MedPAC compiles two reports for Congress that are issued in March and June, which advise the feds on future Medicare policymaking. Traditionally, the March report focuses on Medicare payment policy while the June report homes in on Medicare and the U.S. healthcare delivery system. MedPAC also has public meetings in which they debate and dissect various parts of the Medicare system.

Sometimes the agency’s advice is warranted and insightful, other times industry leaders suggest MedPAC’s ideas are downright draconian. For example, after MedPAC released its March 2024 report, the American Medical Association (AMA) pointed out in a release that MedPAC’s recommendation to tie physician payment to the Medicare Economic Index (MEI) was shortsighted and could possibly cut reimbursement even more.

Reminder: Just because MedPAC advises Congress, the Department of Health and Human Services (HHS), and the Centers for Medicare & Medicaid Services (CMS) to make certain adjustments based on its interpretation of statistics and analysis doesn’t mean that those lawmakers and agencies do. Congress and the federal agencies have been known to go in the opposite direction, but the reports are helpful as they sometimes portend future policy and payment changes.