Independent Payment Advisory Board (IPAB)
Independent Payment Advisory Board (IPAB) Backgrounder
Overview
As part of the health care reform law - known as the Affordable Care Act, or ACA - Congress established the Independent Payment Advisory Board (IPAB) to address Medicare’s increasing costs. IPAB is charged with developing annual proposals aimed at slowing Medicare spending; the Board presents its proposals to Congress and the President, recommending ways to reduce Medicare spending by a targeted amount if it exceeds a specified growth rate.
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.
Membership
The IPAB consists of 15 members nominated by the President and confirmed by the Senate for six-year terms. Members must include - but not be limited to - individuals with expertise in health care, and may not hold any other form of employment while on the board. Members must also include representation from seniors and consumer groups; however, there is no mandated role for patient representation.
Annual Proposals
Beginning on January 15, 2014, if Medicare is growing too fast (according to a specified target), IPAB is required to submit its initial proposal to Congress and the President with recommendations to reduce Medicare spending growth. The Senate must act by August 15 to reject the proposal with a super-majority (three-fifths) vote, or both the House of Representatives and the Senate must pass legislation with equivalent spending reductions in Medicare. If Congress fails to act, and the IPAB recommendations automatically become law and are exempt from both judicial and administrative review.
What Are The Primary Concerns About IPAB?
Opposition to IPAB is clearly a bipartisan issue. Members of both parties in Congress do not support retaining the board as it currently stands. In the House, bipartisan legislation aimed at repealing IPAB has more than 220 co-sponsors. Lawmakers on both sides of the aisle are currently considering the appropriate timing to repeal or modify IPAB.
In addition, numerous health care organizations such as the American Hospital Association, the American Medical Association and AARP have expressed concern over IPAB or called for its repeal. Here are some reasons why:
- Mandatory
The IPAB is charged with making recommendations every year (starting in 2014) in which the CMS Actuary determines that the Medicare spending growth triggers have been reached.
- Unaccountable Board, No Recourse on Decisions
While Congress is subject to constitutional checks and balances, the health reform law established IPAB in such a way that, in practice, it is virtually exempt from these constitutional protections. This board empowers a small, unelected group to decide on Medicare spending cuts, even to the point of overriding laws passed by Congress.
- Impact on Patient Care
There is also concern that IPAB will restrict patients’ access to needed treatments and that they will disproportionately target new treatments to cut spending. New medicines can be part of the solution to our health care problems, but a board focused solely on cost-cutting measures is more likely to view these developments as problems instead of solutions.
- Seniors Foot the Bill
Seniors will be squeezed further as IPAB will be required to identify and make further spending cuts to Medicare every year, on top of the nearly $500 billion that was cut from Medicare as part of health care reform.