MedPAC questions spending but comes up short on solutions

The Medicare Payment Advisory Commission - an independent group that makes recommendations to Congress on Medicare issues - said in its annual June report that the "government must give doctors and health-care facilities incentives to rein in costs in providing care for the elderly and disabled," the Wall Street Journal reports.

The panel, known as MedPAC, raised specific questions about high priced imaging services that encourage doctors to over use them, the possibility of penalizing physicians who provide poor care at high cost with lower payments, and whether to cut payments to private plans that provide Medicare coverage (Zhang, 6/16).

MedPAC's report is "emblematic of the larger debate: long on problems and short on solutions," the Washington Post reports. "The commission has made specific recommendations in its past biannual reports, but identifying wasteful medical spending has proven a lot easier than rooting it out." For instance, one of MedPAC's latest ideas is expanding "accountable care organizations" that would give groups of doctors and hospitals bonuses for good care. But the report itself says savings would be unpredictable (Hilzenrath, 6/16).

One obstacle to reducing costs based on MedPACs recommendations is that the current reimbursement system pays fees for individual services, encouraging volume, but not quality or value, the report says, Kaiser Health News reports. MedPAC has recommended more fundamental changes to incentivize quality and value, but Congress hasn't acted on them. One way to overcome that obstacle may be to give MedPAC the authority to implement its own recommendations, according to legislation introduced last month by Sen. Jay Rockefeller, D-W.Va. President Obama backed the proposal, saying in a speech Monday that the panel's proposals would save $200 billion. But, it remains unclear whether the plan has traction in Congress or among the public (Weaver, 6/15).