Administration Urges Creation of Independent Medicare Advisory Council to Help Control Costs

July 17 - Today OMB Director Orszag urged Speaker Pelosi to support a Base Realignment And Closure-like (BRAC) process for reviewing Medicare changes by creating the Independent Medicare Advisory Council (IMAC). Orszag argued that such a change "would represent a critical step forward in creating a health care system that rewards quality, restrains unnecessary costs, and provides better care to more Americans."

Previously the Administration, in its blogs and public statements, supported a BRAC-like process or Senator Rockefeller's proposal to increase the independence and the authority of the Medicare Paymenat Advisory Commission (MedPAC). In his letter, Orszag indicated that the Administration would be happy with either version since it believes that both would lower Medicare and overall health care costs relative to current trends.

According to the letter, IMAC would be comprised of technical experts and health care professionals (like the current MedPAC and the BRAC Commissions) and would make recommendations on payment rates and other policy reforms. At the same time, it would be prohibited making "annual payment updates" or "broader reforms" that would increase the "aggregate level of net Medicare expenditures."

Under the BRAC process, the commission made up of former military officers and defense experts developed a list of base closures based on strategic defense needs and then submitted to the President and Congress. The recommendations took effect unless Congress passed a joint resolution of disapproval on the entire package.

In its history, Congress only voted three times to overturn the BRAC commission's recommendations and each time, the joint resolution of disapproval failed to get sufficient votes to pass. Clearly the Administration is hoping to free the upcoming and difficult health care policy changes from political pressures and use that freedom to bend the curve of health care costs.