The MedPAC/IMAC Proposal

Many have written about the IMAC proposal. Overall, I support the idea. One of the key reasons is that Congress itself has never shown itself willing to make hard choices. Ezra Klein's piece highlights this matter, as did the Ruth Marcus column posted a while back.

The reason why Congress has pushed back stems from the fact that they do get the ability to micromanage these things in a political manner. In some ways it is like defense earmarks on steroids, because instead of targeting a project, you have to fundamentally affect the payment structure of the entire Medicare (and thus all other health insurance) programs. That leads to a system that creates problematic incentives.

However, like so much of what I talk about, the devil is in the details. The question is how do you design the institution. Right now, the Medicare Payment Advisory Comm ) ission (MedPAC, which is the body that the Independent Medicare Advisory Commission (IMAC) is based on, falls under the auspices of Congress. It does not create binding policy but just makes recommendations that are rarely followed, as the example in Klein's post shows you.

Senator Jay Rockefeller wants to create an IMAC that is closest to the Federal Reserve. Essentially the Congress would completely delegate to an entity that is completely independent of any branch, much like the Federal Reserve is. This of course though may overly insulate it from the political process, and could lead to future gutting by Congress itself.

The President and Peter Orszag have a more refined proposal. This idea follows from the highly successful Base Realignment and Closure Commission (BRAC). BRAC worked by having a panel create a base closure recommendation. The President approved of it. Congress could pass a joint resolution of disapproval, but it could not fundamentally change the recommendation.

The big concern, and one that I personally have with my administrative law hat is the idea of executive power. Under INS v. Chadah, after all, a joint resolution passed by both chambers is like a regular bill. It has presentment requirements, meaning, the President must sign it. However, note the problem here. Even if the Congress by a majority rejects the recommendations, the President, who remember supported the recommendation, would likely veto it. That requires an override vote, and that takes 2/3.

Now perhaps it is likely good to further limit the politics of Congress in this manner, but one should always beware about a new institution, as some liberal Democrats are. The structure does matter. The view of the White House actually represents a major increase in executive power. Furthermore, IMAC would be much smaller than MedPAC, consist only of physicians, and have Commissioners likely appointed by the President (with Senate confirmation). This gives the President greater control over the policy than anyone else.

As someone who deeply loves the legislature itself, while bemoaning some of its inability to do certain activities, I support IMAC, but I think it is important to change the structure. IMAC should remain as an independent agency with delegated authority. Congress should have greater say in appointing commissioners, and five is probably too small. IMAC should draw on other health care sectors too. And something should arise to create a level of procedural consensus at the IMAC level before anything reaches the President or the Congress.

I have also thought of an interesting matter of how to structure the procedure beyond IMAC itself. Instead of having the President make the first say, give the proposals to Congress to vote on as a bill. Require that it have fast track procedures, and limit its amendments to completely budget neutral matters as determined by IMAC and CBO jointly. This would likely limit amendments. If Congress does fail to act, then and only then do you trigger the BRAC type process where the President either approves or disapproves. That way, you give Congress a first crack.

I understand Congress's concern, but David Broder does state that we are actually used to a lot of institutions that limit political power and are highly anti-democratic beyond even the structure of the Senate that progressives love to attack. Agencies themselves are not so democratic, and neither are the Federal Courts.

Of course, I am not really an Administrative Law expert. But, ideas like this are important, and these details are probably sadly lost in the discussion of this issue.