In 1985, Congress established the Physician Payment Review Commission (PPRC) to help formulate changes in the system used by Medicare to pay for physician services. The recommendations of the PPRC and subsequent legislative action led to fundamental reform. As a new type of advisory body, the PPRC enabled Congress to establish an agenda for physician payment reform and set it into law despite initial resistance from the executive branch. Four key factors contributed to the influence of the commission: (1) an institutional design that enhanced and integrated congressional policy formulation; (2) the quality of the information generated for legislative deliberation; (3) the open, consensual process the commission used to translate that information into policy recommendations; and (4) the strategic packaging of the proposals for reform. In the process leading to enactment of the new payment system, the commission skillfully bridged the traditionally segmented roles of neutral analyst and political advisor for legislators pursuing Medicare reform. Implementation of physician payment reform has been largely an administrative responsibility, in which the PPRC has played a minimal role. The complexity and ambiguity of some of the legislative provisions have left room for administrative officials and interest groups to maneuver according to their priorities. Thus, despite congressional efforts to design a tightly controlled system, a considerable amount of work remains to assure its technical and political success.

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