Medicare is an enormous social benefit program that is crucial to the health and well-being of seniors. Its administration, and that of the programs it offers, is directly influenced by the Medical Payment Advisory Commission (MedPAC).
Medicare provides health care coverage to seniors aged 65 years or older. It consists of Part A for hospitalization insurance, Part B to cover ancillary services like physician services, and Part D for prescription drug coverage,
according to the National Bipartisan Commission on the Future of Medicare.
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Medicare supplemental insurance plans, known as Medigap plans, are available through private insurance companies to cover some or all of the out-of-pocket expenses that are not covered under Part A or B. The coverages are standardized, although the premiums and out-of-pocket costs may vary,
according to AARP.
Medicare Part C refers to Medicare Advantage plans. These are plans that allow Medicare participants to pay additional premiums to buy into plans for more services than those covered by Parts A and B. The insurance companies offering these plans are approved by Medicare and are subject to being
monitored by Medicare, according to MedPAC.
In 1997, the Medicare Payment Advisory Commission was created through the Balanced Budget Act to provide guidance and advice to Congress and to the Department of Health and Human Services regarding issues of interest to the effective administration of Medicare.
Included in the research, analysis and advice MedPAC provides to Congress twice a year is how to pay Medicare service providers, including those participating in
Medicare Advantage plans and Medigap plans, according to Seniors Health Insurance. MedPAC is an independent agency, and there is no legal requirement for the government to follow its recommendations.
MedPAC was a strong supporter of the repeal of the Supplemental Growth Rate (SGR) formula as the method to pay Medicare providers. The SGR had tied the payment of Medicare providers to the volume of services provided and the gross national product (GDP). The new method is to pay providers on a merit-based incentive payment system (MIPS) that will measure provider performance and adjust pay to match the quality of service provided,
according to The Commonwealth Fund.
MedPAC’s recommendations to monitor providers to ensure they improve their delivery of services has resulted in reduced Medicare costs,
the agency reported. Its efforts were instrumental in lowering payments to Medicare Advantage providers so they were in line with those providing services through Medigap plans, assuring the services are equitable to participants through the equitable payments to providers.
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