Independent Payment Advisory Board

The Independent Payment Advisory Board, or IPAB, is a United States Government agency created in 2010 by sections 3403 and 10320 of the Patient Protection and Affordable Care Act which has the explicit task of reducing the rate of growth in Medicare without affecting coverage or quality. Under previous law, changes to Medicare reimbursement rates were recommended by MedPAC but required an act of congress to take effect, but the new system devolves responsibility to IPAB with congress being given the power to overrule the agency's decisions.

The Board is required to implement its first proposals in 2015 with its first report being produced by July 2014. The Chief Actuary of the Centers for Medicare and Medicaid Services will determine in particular years the projected per capita growth rate for Medicare for the second year thereafter. If the projection exceeds a target growth rate, IPAB must develop a proposal to reduce per capita Medicare spending. The Secretary of Health and Human Services must then implement the proposal unless Congress enacts legislation pursuant to a fast-track procedure that the law sets forth.

The law explicitly prohibits the IPAB from making recommendations that would ration care by increasing cost sharing , restricting benefits or changing eligibility criteria as means of reducing costs though some opponents like Sarah Palin claim it will ration care.

Objectives

IPAB is tasked with developing specific proposals to bring the net growth in Medicare spending back to target levels if the Medicare Actuary determines that net spending is forecast to exceed target levels, beginning in 2015. The proposals must not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums, increase Medicare beneficiary cost sharing (deductibles, coinsurance, or copayments), or otherwise restrict benefits or modify eligibility criteria. The Department of Health and Human Services must implement these proposals unless Congress adopts equally effective alternatives. The board is also required to submit to Congress annual reports on health care costs, access, quality, and utilization. IPAB must submit to Congress recommendations on how to slow the growth in total private health care expenditures.

Every year on September 1, IPAB must submit a draft proposal to the Secretary of Health and Human Services. On January 15 of the next year IPAB must submit a proposal to Congress. If IPAB fails to meet this deadline, the Department of Health and Human Services (DHHS) must create its own proposal . Congress must consider this proposal under special rules. Congress 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, DHHS must implement the proposal as originally submitted to Congress.

With regard to IPAB's recommendations, the law says "The proposal shall not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums under section 1818, 1818A, or 1839, increase Medicare beneficiary cost sharing (including deductibles, coinsurance, and copayments), or otherwise restrict benefits or modify eligibility criteria."

Membership and term of office

IPAB is composed of 15 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 consults 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.

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. Five will be appointed for a term of 1 year, five will be appointed for a term of three years, and five will be appointed for a term of six years. All subsequent appointments will be made for six years. A member may not serve more than two full consecutive terms.

Appointed members of the IPAB will include individuals with national recognition for their expertise in health finance and economics, actuarial science, health facility management, health plans and integrated delivery systems, health facilities reimbursement, and other providers of health services or related fields to provide a mix of professionals, a broad geographic representation, and a balance between urban and rural areas. IPAB members must include (but will not be limited to) physicians and other health professionals, experts in the area of pharmaco-economics or prescription drug benefit programs, employers, third-party payers, individuals skilled in the conduct and interpretation of biomedical, health services, and health economics research, and expertise in outcomes and effectiveness research and technology assessment. Members must also include individuals representing consumers and the elderly. 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.

The president of the United States must establish a system for public disclosure by IPAB members of any financial and other potential conflicts of interest. No IPAB member may be engaged in any other business, vocation or employment.

Members will be paid at a rate described in Level III of the Executive Schedule that determines pay for senior executive branch officials. As of 2010 this is $165,300 per year.

Funding

$15 million has been appropriated for IPAB in 2012. Future funding for the agency will be based on this figure but adjusted for inflation.

Legislative history

IPAB was created in response to criticism of the Medicare Payment Advisory Commission (MedPAC), a body with no regulatory power that advises Congress. Critics claimed that "hundreds of billions of dollars" in spending cuts were proposed by MedPAC but never acted upon by Congress. On June 25, 2009, Senator Jay Rockefeller introduced the Medicare Payment Advisory Commission Reform Act of 2009, which would have changed MedPAC into an executive branch agency. On July 17, 2009, the Obama administration submitted to Congress a similar proposal called the Independent Medicare Advisory Council Act (IMAC), which would have created an independent five-member executive council to make recommendations to the president.

From June 17 to September 14, 2009, three Democratic and three Republican Senate Finance Committee members met for a series of 31 meetings to discuss the development of a health care reform bill, including an independent board that the senators informally described as “MedPAC on steroids.” During this period, Senators Max Baucus (D-Montana), Chuck Grassley (R-Iowa), Kent Conrad (D-North Dakota), Olympia Snowe (R-Maine), Jeff Bingaman (D-New Mexico), and Mike Enzi (R-Wyoming), met for more than 60 hours, and their discussions established the principles upon which healthcare reform legislation was later passed. The Senate Finance Committee included a provision establishing an independent Medicare advisory board in its health reform legislation, which passed the Senate on December 24, 2009.

During the health care reform debate of 2009-2010 that ended with the passage of the legislation by the Democratic-controlled Congress, Republicans proposed striking provisions in the bill that would require Medicare cost control. While voting yes on the legislation in April 2010, one liberal congressman, Pete Stark (D-Calif.), said that the IPAB "sets [Medicare] up for unsustainable cuts" that will endanger the health of patients, and that he would "work tirelessly to mitigate the damage" the panel would cause.

Political debate

The Washington Post reported Phil Roe (Republican-Tennessee) is described as "a kindred soul by the medical industry" in part because of introducing legislation to eliminate the IPAB. Roe charged the IPAB would deny care but Mother Jones reported that, "in reality, the rules governing IPAB explicitly bar 'any recommendation to ration health care.'"

The New York Times reported in April 2010 that some Obama administration officials feared the IPAB could be "target for attacks of the 'death panel' sort". In December 2010, Sarah Palin wrote in the Wall Street Journal that the National Commission on Fiscal Responsibility and Reform "implicitly endorses the use of "death panel"-like rationing by way of the new Independent Payments [sic] Advisory Board—making bureaucrats, not medical professionals, the ultimate arbiters of what types of treatment will (and especially will not) be reimbursed under Medicare." FactCheck.org replied to Palin's op-ed by saying her description was wrong on three counts:

• the board doesn’t have the power to ration health care;
• board members won’t be all "bureaucrats" (since the law requires that it include medical professionals, other health care providers, medical researchers, experts in health care finance and actuarial science, employers representatives, and the elderly; and
• board members will not be the "ultimate arbiters," since Congress has the authority to change or block their recommendations, although special legislative procedures make it more difficult than usual for Congress to act.

According to The New York Times, the Pharmaceutical Research and Manufacturers of America has said that elimination of the payment board is its top priority in the 2011 Congress. The American Hospital Association and the American Medical Association have spoken out against the board.

Congressional Budget Office scoring

The Congressional Budget Office (CBO) estimated that IPAB will achieve Medicare spending reductions of $15.5 billion over its first five years of operation. This amounts to 0.5% of projected Medicare spending for that period. Through 2019, the IPAB is projected to effect cost savings of $28 billion.

Fiscal commission report

The presidential commission report on reducing the federal deficit voted to strengthen the IPAB 11 to 7. It wished bring forward the time by which health care providers would be affected by IPAB decisions. Specifically, the recommendations "would hit hospitals the hardest, which gained an exemption from the group’s decisions for several years".

External links

• David Newman and Christopher M. Davis. The Independent Payment Advisory Board. Washington, D.C.: Congressional Research Service, 2010.
• Holly Stockdale. An Overview of Proposals to Establish an Independent Commission or Board in Medicare. Washington, D.C.: Congressional Research Service, 2010.