Monday, August 15, 2011


The Washington Post reports that the Affordable Care Act’s Independent Payment Advisory Board, intended to constrain Medicare spending increases, is under increasing pressure from Republicans, health care lobbyists—and a significant number of Democrats.

As specified by the ACA, the IPAB will consist of fifteen health care “experts” to be appointed by the president and confirmed by the Senate, with authority to make cuts to Medicare if spending exceeds specified targets, starting in 2015. Congress could overrule the panel, but only by mustering a super-majority in the Senate or by creating an alternate plan to save the same amount.

The ACA imposes narrow limits on the IPAB. By law it cannot ration care, cut benefits, change eligibility rules, or raise revenue by increasing beneficiary premiums or cost-sharing, nor can it—until 2020—reduce payments to hospitals. This means that the brunt of any IPAB-proposed savings will fall on physicians and drug and medical device companies.

Not surprisingly, the targeted provider groups are lobbying fiercely against the IPAB’s powers. As the Post reports, the AMA and dozens of other industry groups are actively fighting the IPAB in Washington, while a series of national TV ads denouncing it is to air starting this week. Congressional Republicans—eager to attack any part of the ACA—have jumped on the bandwagon and, with the support of a handful of Democratic House members dependent on provider financial contributions, have introduced a bill to eliminate the IPAB.

There are some ironies in all of this frantic activity—along with indications that everyone involved may be wasting their energies:

1. The IPAB is likely to have far less impact on Medicare physician payments than any possible reworking of the Sustainable Growth Rate formula, and be considerably less broad than anything the newly-named bipartisan deficit super-committee may propose.

2. Given that its fifteen members are subject to Senate confirmation, Republicans can probably prevent the IPAB from ever convening.

3. The Congressional Budget Office estimated in March that, in part due to other cuts to Medicare in the health-care law, spending will be within the ACA’s targets for the next 10 years, thereby eliminating the need for the IPAB to make any recommendations at all.

1 comment:

  1. What many experts and politicians appear to be overlooking is incentive. The health care industry is one that will always be in high demand, and will always be in need of funding. In order to save money, more energy should be placed into the preventative aspect of global health. With physicians and drug and medical device companies bearing the brunt of the spending cuts, incentive is substantially lessened, which infringes upon the potential to develop more effective, as well as cost effective, means of treating disease. Just a thought.