Copyright 1999 Federal Document Clearing House, Inc.
Federal Document Clearing House Congressional Testimony
March 25, 1999, Thursday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 2121 words
HEADLINE:
TESTIMONY March 25, 1999 GAIL R. WILENSKY CHAIR MEDICARE PAYMENT ADVISORY
COMMISSION HOUSE APPROPRIATIONS LABOR, HEALTH AND HUMAN
SERVICES, AND EDUCATION FISCAL 2000 LABOR - HHS APPOPRIATIONS
BODY:
Fiscal Year 2000 Appropriation Request
Witnesses appearing before the Committee on Appropriations Subcommittee on the
Departments of Labor, Health and Human Services, Education, and Related Agencies
U.S. House of Representatives Gail R. Wilensky, Ph.D Chair Medicare Payment
Advisory Commission Mr. Chairman and Members of the Committee: I am Gail
Wilensky, Chair of the Medicare Payment Advisory Commission (MedPAC). With me is
Murray Ross, the Commission's Executive Director. We are pleased to be here
today to discuss the Commission's work and to present our appropriation request
for fiscal year 2000. In brief, MedPAC is requesting $7.0 million, the same
level of funding that was appropriated for 1999. My testimony today will discuss
MedPAC's legislative mandate, our work in fulfillment of that mandate during
fiscal year 1999, the work we have planned in fiscal year 2000, and the
resources we will need to pursue that work. Legislative Mandate Congress
established the Medicare Payment Advisory Commission under the Balanced Budget
Act (BBA) of 1997 (P.L. 105-33) to provide the Congress with analysis of and
recommendations on policies affecting the Medicare program. The BBA terminated
the Physician Payment Review Commission (PPRC) and the Prospective Payment
Assessment Commission (ProPAQ and transferred the assets, staff, and fund
balances of both Commissions to MedPAC on November 1, 1997. The Commission is
currently composed of 15 members, who are appointed to three-year terms by the
Comptroller General. By law, Commissioners are appointed to represent diverse
points of view, including those of health care providers, payers, consumers, and
employers, and to bring expertise in health economics and biomedical and health
services research (see Table 1 for a listing of the Commission's members and
their affiliations). 1 The Commission is assisted in its work by an Executive
Director and professional research and administrative staff. Our professional
staff have expertise in health economics, statistics, public policy, public
health, hospital administration, and medicine. 1 Effective May 1, 1999 the
Commission will expand to 17 members, a change enacted in the Omnibus
Consolidated Emergency Supplemental Appropriations Act of 1998. This expansion
will give MedPAC even wider representation, but will still allow the Commission
to function effectively as a unified body. When specialized data or expertise
are needed, the Commission also contracts with government agencies, trade
associations, and private research firms. Within its broad mandate, MedPAC is
directed by the BBA to consider specific issues relating to the Medicare
program. We are charged with considering: - payment, risk adjustment, risk
selection, quality of care, access to care, and other major issues relating to
the implementation and development of the Medicare+Choice program, - methods to
determine and update payments for different types of health services under the
traditional fee-for-service Medicare program, - the impact of payment policies
on access to and quality of care for beneficiaries in the traditional program, -
the effect of Medicare payment policies on the broader health care system, and -
the effect of developments outside the program on Medicare. The BBA directed the
Commission to make recommendations to the Congress on Medicare's payment
policies by March I of each year. MedPAC is required to submit a report to the
Congress addressing other issues relating to the Medicare program by June 1 of
each year. In addition, the Commission is required to comment on reports
submitted by the Secretary of Health and Human Services to the Congress. The
Commission meets about eight times a year to review analyses presented by staff
and to develop and discuss its recommendations. These meetings are open to the
public, and time is routinely provided for comment by individuals and groups.
Accomplishments During Fiscal Year 1999 MedPAC fulfills its mandate to assist
the Congress in improving Medicare policy in a number of ways: - reports to
Congress required by our authorizing legislation or by other laws, - formal
testimony before the authorizing Committees of the House and the Senate, -
formal comments to the Secretary of Health and Human Services on proposed
regulations, and - technical analyses and briefings by Commission staff for
Congressional staff. Statutorily required reports MedPAC submitted its March
1999 Report to the Congress: Medicare Payment Policy on time, and work is well
under way on our June 1999 report. This year, MedPAC has two additional mandated
tasks. As required under the Omnibus Consolidated Emergency Supplemental
Appropriations Act of 1998, we are undertaking an analysis of Medicare
beneficiaries' access to home health services, the results of which will be
included in our June report. And as required by the BBA, we will submit a report
later this year on graduate medical education. In our March
report, MedPAC made recommendations in a number of areas, including: - the
Medicare+Choice program, - the acute care hospital inpatient prospective payment
system, - payments for facilities exempted from the acute care prospective
payments system, - development of new payment systems for post-acute care
providers, - modification of payment for services provided in ambulatory care
facilities, - continued reform of the Medicare fee schedule for physicians, and
- the composite rate for outpatient dialysis services. Enactment of the Balanced
Budget Act affected each of these areas. For the Medicare+Choice program,
inpatient hospital services, and physicians' services, the BBA set out specific
payment updates. MedPAC's recommendations here focused on whether those updates
were adequate; in general we found them to be so. For post-acute care providers
and ambulatory care facilities, the BBA made substantial changes in payment by
instituting new payment systems. MedPAC's recommendations in these areas-to the
Secretary or to the Congress as appropriate given the stage of development of
the new systems-focused on where improvements in these new systems could be
made. Finally, the Commission recommended a payment update for dialysis
services. In our June report, the Commission will address quality assurance in
Medicare's traditional fee-for-service program, ways to improve the quality of
care for beneficiaries with end-stage renal disease and care at the end of life,
access to care (with a separate chapter on access to home health services),
beneficiaries' financial liability for health care services, and managed care
for the frail elderly. In addition to our published reports, MedPAC is also
required to comment on reports to the Congress that the Secretary is required to
submit. MedPAC's comments serve an important role in giving the Congress an
independent assessment of the issue on which the Secretary is reporting. In
March, we commented on the Secretary's report on prospective payment for home
health services; the Commission was generally in agreement with the direction of
the policy but expressed concern about whether the Secretary can meet her
timetable for implementation. Next month, the Commission will comment on the
Secretary's report on the new risk adjustment method being proposed for the
Medicare+Choice program. Testimony Thus far, the Commission has been asked to
testify on four occasions in fiscal year 1999. The Chair testified twice before
the Subcommittee on Health of the House Committee on Commerce- once on the
Medicare+Choice program and once on the new method of risk adjustment that the
Secretary will be implementing for that program. In March, the Chair presented
MedPAC's recommendations to the Subcommittee on Health of the House Committee on
Ways and Means. Also in March, the Chair testified on the Medicare program and
MedPAC's recommendations before the Senate Committee on Finance. Comments on
proposed regulations Since enactment of the BBA, the Commission has closely
followed implementation of the law by the Secretary and has commented on the
notices of proposed rulemaking and interim final regulations issued. Although
MedPAC is not required by law to comment on proposed regulations, we do so in
cases where we feel that the Congress benefits from having an independent
assessment. Further, making comments as the regulations are developed provides
the Congress (and the Secretary) with more timely advice than we can provide in
our March or June reports. In fiscal year 1998, MedPAC made formal comment on
five regulations. To date this year, we have delivered comments on the
Secretary's proposal for prospective payment of services provided in hospital
outpatient departments. Those comments parallel the recommendations in our March
report. Future Work Following the completion of our June report, the Commission
will begin formulating our research agenda for the coming year. Some of the
topics on that agenda are already clear. For example, in the Medicare+Choice
program, we will track plan participation and changes in enrollment patterns to
determine how withdrawals and cutbacks in service areas announced by plans in
late 1998 have affected Medicare beneficiaries. We will also examine the extent
to which changes in plan participation have resulted from inadequate payment
rates or from other factors. At the request of Congressional staff, we will also
analyze the impact of the risk adjustment on payments to health plans. For the
acute care inpatient hospital system, we will continue to monitor trends i in
hospital payments, costs, and margins. While the most recent data indicate that
inpatient margins are at historic highs, those data do not reflect the impact of
BBA policies that slowed the growth in payments and reduced payments for certain
patients who are transferred to post-acute care facilities. We will also develop
a broader measure of hospital performance that accounts for changes in Medicare
payment policy to outpatient departments and hospital-owned post-acute care
facilities. In the post-acute care arena, we will monitor the impact of the
prospective payment system for skilled nursing facilities, and we will continue
to monitor the development and implementation of prospective payment systems for
rehabilitation hospitals and home health agencies. We also plan to develop data
on episodes that can help us to examine how and whether Medicare's payment
polices should be changed to account for substitution in sites of care. MedPAC
will be initiating a major research project on payment for and quality of
outpatient dialysis services. Medicare's payments for dialysis have remained
essentially unchanged for almost two decades, and although we continue to see
entry into the market, many observers have expressed concerns about the quality
of care that is available to Medicare beneficiaries with end-stage renal
disease. We will look not only at the adequacy of payment, and appropriate
incentives in the current payment system to deliver quality care. MedPAC's staff
are beginning to develop these and other research projects. Commissioners will
meet in mid-June to discuss which projects should be given emphasis and will
discuss our analytic agenda at a public meeting. Appropriations Request For
fiscal year 2000, MedPAC is requesting $7.0 million, the same amount that was
appropriated for fiscal year 1999. We propose to allocate funds slightly
differently in 2000 than in 1999, with mores ending on salaries and benefits for
staff and Commissioners and less spending for external research contracts (see
Table 2). We plan to increase spending for salaries and benefits over 1999
levels because we expect to achieve the staff size we need to fulfill our
responsibilities to provide the Congress with analysis and recommendations on
the many aspects of Medicare policy on which it seeks MedPAC's guidance. Staff
departures following the merger of PPRC and ProPAC left us with fewer staff than
needed in fiscal 1998, and the Commission allowed $667,000 in budget authority
to lapse. With aggressive recruiting-we have essentially doubled our staff since
then-MedPAC is now near its full complement of staff. Despite a tight labor
market for health policy analysts-particularly senior people with extensive
knowledge of the Medicare program-we expect to be fully staffed at the beginning
of fiscal 2000. Accordingly, we plan to reduce spending for extramural research
contracts, as we will be able to handle a larger workload in-house. We will also
slightly reduce our spending on commercial contracts; that reflects completion
of some one-time projects. I am happy to respond to any questions you may have.
LOAD-DATE: March 30, 1999 
