Medicare Payment Advisory Commission MedPAC

The Balanced Budget Act of 1997 created MedPAC by merging two earlier commissions, one that advised on hospital payments and one on physician payments. It is a legislative-branch agency with seventeen commissioners, experts in health care delivery, finance, and research, appointed by the Comptroller General of the United States for three-year terms. A professional staff of analysts supports them.

Medicare spends more than a trillion dollars a year, mostly through payment formulas Congress writes into law. Each March MedPAC sends Congress recommendations on payment updates for the coming year for each type of provider, such as hospitals, physicians, skilled nursing facilities, home health agencies, and Medicare Advantage plans. Each June it reports on broader issues, such as the design of Medicare Advantage, prescription drug payment, and quality measurement.

MedPAC's recommendations are advisory only, and Congress often ignores or modifies them, but they are widely used by congressional committees, the Congressional Budget Office, and the Centers for Medicare and Medicaid Services, and the commission is regarded across parties as a source of technical analysis. A companion body, the Medicaid and CHIP Payment and Access Commission, created in 2009, plays a similar role for Medicaid.