Independent Payment Advisory Board (IPAB)
Independent Payment Advisory Board (IPAB) Frequently Asked Questions
What is the Independent Payment Advisory Board?
How will patients be affected?
Will patients have a voice in the Board decision-making process?
Can Congress reject the Board’s recommendations?
Are there any checks and balances on the Board?
Why does the IPAB matter to me as a biopharmaceutical company employee?
What is the Independent Payment Advisory Board?
Currently, Medicare policy is made by Congress and implemented by the Centers for Medicare and Medicaid Services (CMS), the agency responsible for administering the program. The Independent Payment Advisory Board (IPAB) - created by the Affordable Care Act (ACA) - will change this process. IPAB is a new, independent, unelected body of individuals with unprecedented power to set payment rates and make other Medicare policy decisions. The Board is responsible for submitting annual proposals to Congress (starting in January 2014) that would reduce Medicare spending by targeted amounts set in legislation.
On March 22, 2012, the House of Representatives passed H.R. 5, which repeals the Independent Advisory Board. This vote is an important step towards repeal of a board which, asstructured, will likely result in reduced access to medical treatments for Medicare beneficiaries. A similar bill has been placed on the Senate calendar and we will continue to keep you apprised of congressional action on this issue.
How will patients be affected?
In its efforts to control Medicare spending, IPAB is largely limited to slashing reimbursement rates for providers and plans, which could very likely limit patients’ access to care and interfere with physicians’ choices in treating their patients. This change comes at a time when Medicare’s formula-driven payment system is already poised to make large cuts to physician payment.
Will patients have a voice in the Board decision-making process?
Not necessarily, as there is no mandated role for patients in the Board membership. The ACA establishes a “consumer advisory council” to advise the Board on the impact of payment policies on consumers; however, the council is purely advisory and can be ignored by IPAB. Moreover, patient views and consumer views do not always match. There is no requirement that patient views are represented in the consumer advisory council.
Can Congress reject the Board’s recommendations?
Yes, but only by passing a bill that achieves the same spending cut targets as the Board’s recommendations or by passing a resolution rejecting the Board’s recommendations that garners a three-fifths majority of the Senate. These actions would have to be completed within a timeframe that will likely be very difficult to meet. Additionally, Congress’s bill or resolution would have to be signed by the President, or the President’s veto would have to be overridden. The Administration has no power to reject the Board’s recommendations and must implement them.
Are there any checks and balances on the Board?
The IPAB is given an unprecedented amount of power for a body comprised solely of unelected officials. Its recommendations carry the force of law, even when they override laws passed by Congress. It can adopt entirely new policies never even considered by Congress. The only check on the Board is that Congress can pass an alternative proposal - but that proposal must meet the same spending reduction target - or block the resolution by a three-fifths majority in the Senate. Even if the Board is unable to agree on recommendations to cut Medicare, the Secretary of Health and Human Services in Washington, DC must step in and propose cuts meeting the spending reduction targets that carry the same force of law. Just as important, individuals - including physicians - will have no way to appeal IPAB’s decisions because these decisions when implemented cannot be challenged, even in court.
Why does the IPAB matter to me as a biopharmaceutical company employee?
The IPAB has unchecked authority to cut Medicare spending, which means that they have the authority to restrict patients’ access to needed treatments, and to disproportionately target new treatments to reach their cost-cutting goals. New discoveries in medicines have always been part of the solution to our health care problems; a board focused solely on cost cutting measures is more likely to view these developments as problems instead of solutions.