Last week saw the launch of the latest version of the iPad – and the beginning of the end, perhaps, of the IPAB.
The Independent Payment Advisory Board (IPAB) was created by the Patient Protection and Affordable Care Act (ACA) in 2010. IPAB is responsible for recommending specific proposals to contain the growth rate of Medicare spending if spending per capita is projected to exceed targets also established by the ACA. From 2015 through 2019, that target is based on measures of inflation. Starting in 2020, the target is based on the growth of the gross domestic product plus one percentage point.
Binding Recommendations and Other Reports
At the start of every year, IPAB must submit recommendations to Congress to reduce spending if the targets are going to be exceeded. If IPAB fails to meet this deadline, the Secretary of Health and Human Services (HHS) must develop a proposal. Congress must consider the IPAB recommendations under special rules: it cannot consider any amendment to the proposal that does not achieve similar cost reductions unless both houses of Congress, including a three-fifths super majority in the Senate, vote to waive this requirement. If Congress fails to adopt a substitute provision by August 15, HHS must implement the original proposal by default.
In this manner, spending controls will no longer require legislative action. Shifting authority over Medicare provider payments from Congress to an independent commission would be a significant change, and it is viewed as one of the most meaningful — and controversial — measures in the health reform legislation with respect to bending the cost curve in health spending.
IPAB recommendations are exempt from judicial review.
Although IPAB’s mission is to control the rate of growth of health care spending, it is not permitted to ration care. The ACA prohibits IPAB from rationing care, raising taxes or premiums, increasing beneficiary cost-sharing, restricting benefits or modifying eligibility. It also prohibits the Board from cutting spending to hospitals and certain other providers, representing 37 percent of Medicare costs, before 2020.
Each year, whether or not it forwards spending reduction recommendations to Congress, IPAB must produce annual reports on national health care costs, access, use and quality. Beginning in 2015, it must offer biannual guidance on ways to slow the nation's total health care spending, including private sector spending. Finally, IPAB may also issue nonbinding recommendations on a variety of health care issues.
IPAB will consist of fifteen members appointed by the President, subject to Senate confirmation. The Secretary of HHS, the Administrator of the Center for Medicare and Medicaid Services, and the Administrator of the Health Resources and Services Administration serve ex officio as nonvoting members. In making the appointments, the President is to consult with the Majority Leader of the Senate concerning the appointment of three members; the Speaker of the House of Representatives concerning the appointment of three members, the Minority Leader of the Senate concerning the appointment of three members, and the Minority Leader of the House of Representatives concerning the appointment of three members. No consultation is required with respect to the final three members. The first members appointed to the Board will be divided into three staggered classes in order to ensure that their terms do not expire simultaneously.
Individuals who are directly involved in providing or managing the delivery of Medicare items and services may not constitute a majority of IPAB’s membership. Most remarkably, IPAB members may not be engaged in any other business, vocation or employment – they are to be full time employees of IPAB itself.
For further information on IPAB and its “structure, scope of authority, operational procedures, and the processes and timelines for considering, modifying, and implementing the Board’s recommendations,” see the Kaiser Family Foundation white paper The Independent Payment Advisory Board: A New Approach to Controlling Medicare Spending.
Legislation to Repeal IPAB
H.R. 452, the "Medicare Decisions Accountability Act," sponsored by Rep. Phil Roe, M.D. (R-TN), would repeal IPAB, which ASA characterizes as “an unaccountable and unelected board with sweeping powers to mandate across-the-board or other targeted reductions to Medicare payments including cuts to payments for physicians.” The AMA has called IPAB “a group of 15 appointees that would have the considerable power to implement harmful, across-the-board Medicare payment cuts but very little accountability” and “continues to argue that it would only add to the problems caused by the broken Medicare physician payment formula.” (AMA Wire, March 7, 2012.) Think “SGR on steroids,” as some have said.
On March 6, the House Energy & Commerce Committee passed H.R. 452 by voice vote and on March 8, the House Ways & Means Committee followed suit. The way is now clear for full House of Representatives legislative consideration of H.R. 452, expected later this month.
The intent of the proponents of IPAB was to create a new and more effective mechanism for reducing Medicare spending. According to Sen. John “Jay” Rockefeller, D-WV, who was one of IPAB's architects, the board was specifically designed to reduce the influence of "special interests" on Medicare payment policy.
Insulating payment policy-making from the political process, however, is the major problem with IPAB from the point of view of physicians and other providers who are now looking at a future that may include Medicare cuts even larger than those that would be brought about by the SGR, if the SGR were to take effect. ASA is the co-founder of the IPAB Repeal Coalition, which now counts more than 42 physician organizations as members. The coalition’s recent letter to House Energy & Commerce Committee leadership supporting H.R. 452 addressed IPAB-related concerns including: “unrealistic Medicare spending targets, a structure that prohibits membership by practicing physicians or otherwise employed physicians, a structure that forbids a majority membership of physicians (practicing or otherwise), the lack of a transparent process for hearings, debates, and meaningful stakeholder input, and the usurping of traditional Congressional oversight and execution of the Medicare program.”
If Medicare spending growth exceeds the targets – something that the Congressional Budget Office said last March was unlikely to occur for nearly a decade – physicians could potentially see large payment reductions on top of the large and still-growing SGR nightmare. We urge readers to help forestall that possibility by lending their strong personal support to the advocacy efforts of ASA and other professional organizations.