One of the issues that has recently emerged in health reform discussions concerns how to bring about change in the Medicare program to improve efficiency and control health care cost growth. The Obama Administration and some Congressional leaders have proposed establishing a new independent entity that would be given authority to recommend changes in Medicare policy to be implemented by the Administration, subject to Congressional review. This concept represents a significant departure from current practices.
This issue brief considers questions associated with the establishment of a new entity to set Medicare payment policy and the implications for beneficiaries, other stakeholders, and program spending. It also explains the way Medicare payments are set under current law, including the advisory role currently played by the Medicare Payment Advisory Commission (MedPAC), as well as various options under consideration to create an independent Medicare payment entity.
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