Medicolegal Issues

Congressional Adviser


A mystery. That’s what MedPAC is to many hospitalists. You might recognize the name from communications about Medicare’s physician fee schedule, but what is this entity, what power does it possess, and how does it affect the work you do and the pay you receive?

MedPAC is the Medicare Payment Advisory Commission, an independent agency established by the Balanced Budget Act of 1997. Its mission is to advise Congress on issues affecting Medicare, including payments to private health plans participating in Medicare as well as providers in Medicare’s traditional fee-for-service program. MedPAC also analyzes and advises legislators on two issues on HM’s radar: access to care and quality of care.

Policy Points


A mere 1.5% of nonfederal hospitals in the U.S. use a comprehensive electronic health-record (EHR) system, according to HHS-funded research in a report released by the New England Journal of Medicine. Researchers found that only 7.6% of hospitals had a “basic” EHR system that included the capability to record and store physician and nursing notes, and 10.9% of hospitals had a basic system without those clinical note-keeping functions.


Healthcare costs are on the rise, according to a CMS report that shows growth in national health expenditures (NHE) is expected to significantly outpace economic growth in 2008 and 2009 due to the recession. NHE is projected to grow 6.1% in 2008, as health spending increases from $2.2 trillion in 2007 to $2.4 trillion. Growth in the U.S. economy, as measured by the GDP, is anticipated at 3.5%. For 2009, health spending is projected to rise 5.5%, while the GDP is expected to decrease 0.2%. The health share of GDP is expected to increase to 16.6% in 2008 from 16.2% in 2007, and to 17.6% in 2009. Read more about the projections at


A new HHS Web site ( allows the public to view the White House Health Forum, find out about upcoming local health forums, read the Report on Health Care Community Discussions, and share thoughts about health reform with the administration.

Ear of the Law

Why is MedPAC important to hospitalists? Money. The commission advises Congress on how Medicare is going to pay for healthcare services, and Medicare is a major payor for any hospitalist, says Ron Greeno, MD, FHM, chief medical officer of Cogent Healthcare in Irvine, Calif., and a member of SHM’s Public Policy Committee. “The majority of patients we’ll be taking care of in any hospital are Medicare patients,” he says, “and it’s not just how we get paid, but all the regulations around that. … MedPAC will weigh in on that and certainly shape the thinking of lawmakers.”

“MedPAC is about payment … but obviously there are other policy issues they weigh in on,” Dr. Greeno says. For example, MedPAC makes specific recommendations on the physician fee schedule and determines how hospitalists document and code.

How It Works

The commission is made up of 17 volunteer members from a diverse spectrum of healthcare backgrounds. Commissioners are appointed to three-year renewable terms. An executive director and staff of analysts with backgrounds in economics, health policy, public health, and medicine support the agency.

MedPAC holds monthly public meetings in Washington, D.C., to discuss Medicare issues and policy questions, and to formulate recommendations to Congress. Meetings include research presentations by MedPAC staff, policy experts, and interested parties. Each meeting allows time for public comment.

The commission provides its recommendations to Congress in biannual reports, issued in March and June. MedPAC also advises Congress through comment on reports and proposed regulations issued by the U.S. Department of Health and Human Services (HHS), testimony, and briefings for congressional staff.

A New Role

This year, as President Obama and his administration push for rapid and major healthcare changes, Dr. Greeno says MedPAC’s role will shift as Congress speeds toward new solutions. “How things are going to get done is already different than it was last year,” he says. “The pace of the government’s attempts to change how Medicare looks has picked up considerably.”

MedPAC is about payment … but obviously there are other policy issues they weigh in on.

—Ron Greeno, MD, Cogent Healthcare, SHM Public Policy Committee

Citing SHM’s Public Policy Committee meetings with lawmakers in March, Dr. Greeno says healthcare reform is on the fast track. “Everything we were hearing from CMS [Centers for Medicare and Medicaid Services], the American Hospital Association, and MedPAC indicated that they’re looking to have a healthcare reform bill to Congress by summer,” he says. “When you have that kind of pace, things will come from a lot of different areas.”

Dr. Greeno uses pay for performance as one example of how government can be slow to change healthcare policy. “That process has taken years, but it’s still a small percentage of how we’re paid,” Dr. Greeno says, noting the current administration has expressed interest in changing course on the policy. “Now we may have complete reform of Medicare payments. In light of the rapidness of this pace, I’m not sure MedPAC’s role will be the same. They’ll continue to be a resource to Congress, but the commissioners are volunteers with full-time jobs; they meet once a month, while legislation is being worked on pretty much around the clock right now.”


March 2009

MedPAC has sent its the first of its biannual reports, or “official advice,” to Congress. The March report included the following recommendations:

  • A 1.1% physician pay update next year to replace a proposed 21% cut;
  • Full payment update for hospitals in 2010 for inpatient and outpatient services as a reward for better performance based on quality measures; and
  • Replace the sustainable growth rate (SGR) system that currently dictates physician pay. The report states the “existing SGR formula does not provide incentives at the individual physician level to control volume growth, and it is inequitable across physicians.”

This and other MedPAC reports are available at—JJ

MedPAC Sets the Tone

Even if the commission isn’t prepared to make direct recommendations for new legislation in the next few months, it still has significant influence. Since its inception, MedPac has routinely “set the tone” for policy reform, Dr. Greeno stresses. “For example, the healthcare reform legislation will likely include bundling payments to hospitals and physicians who work in hospitals,” he says. “MedPAC has already made recommendations to do this, as well as to start demonstration projects.” Earlier this year, sites were selected for Medicare’s Acute Care Episode (ACE) demonstration, under which a single global payment will be made for inpatient facility and professional services. “The same is true of the idea of paying based on quality, not patient volume,” Dr. Greeno says. “The commission has made recommendations on this.”

Then again, no one can say how the future of healthcare reform will unfold, or how quickly things will move this year. “The healthcare bill introduced this summer could completely do away with fee-for-service payments,” Dr. Greeno says. “Of course, nobody knows when—or if—that bill will get passed.” TH

Jane Jerrard is a medical writer based in Chicago.

Next Article:

   Comments ()