THE INDEPENDENT PAYMENT
ADVISORY BOARD (IPAB)
February 2012
IPAB IS SET IN LAW
• The health care reform law created a new body called the Independent
Payment Advisory Board (IPAB) responsible for reducing growth in
Medicare spending, once spending triggers are hit.
• This amounts to the first-ever cap on Medicare spending.
IPAB MEMBERSHIP
• 15 members appointed by the President and confirmed by the Senate
for 6-year terms. Members include: physicians, health care experts, third
party payers and economists.
• The heads of HHS, CMS and HRSA serve as ex-officio, non-voting
members.
• Simple majority of the Board present is all that is needed to pass a
recommendation to Congress.
• A 10-member consumer advisory council advises the Board and
holds at least two public meetings per year.
• A majority of the Board must be those NOT directly involved in
providing or managing the delivery of items or services under Medicare.
• The President selects the Board’s Chair.
IPAB: HOW IT WILL WORK
• If Medicare costs are increasing faster than inflation, IPAB must
recommend program changes to Congress by January 15 of each year
(beginning in 2014) that reduce Medicare spending.
• The proposals cannot ration health care, increase revenues or
beneficiary premiums, increase Medicare beneficiary cost-sharing or
otherwise restrict benefits or eligibility criteria.
• Targeted cuts are based on total Medicare spending but exempt over
50 percent of providers for many years, including hospitals, hospice and
some physicians.
• If IPAB does not submit a proposal by January 15, the HHS
Secretary is required to submit a proposal to the President by January
25. The President must then submit it to Congress within two days.
IPAB PROPOSALS
• IPAB submits its proposals to Congress each January, beginning
in 2014.
• The IPAB proposals automatically become law the following
January, beginning in 2015 unless:
• Congress passes and the President signs into law - by August 15
- its own proposals that will save Medicare the same amount; or
• The Senate votes with a 3/5 majority to reject the proposals.
• The changes IPAB makes to Medicare cannot be overruled by the
Administration or a court of law.
“I believe this commission is the largest
yielding of sovereignty from the Congress
since the creation of the Federal Reserve… It
has an enormous amount of potential power.”
- Peter Orszag, Former OMB Director
TIMING: KEY DATES ON THE HORIZON
2012: IPAB Membership nominations expected to begin
Late 2012: Expected confirmation of IPAB members; first IPAB
money appropriated by Congress
2013: Chief Actuary determines if Medicare spending has
triggered the IPAB process
Jan. 15, 2014: IPAB’s first set of recommendations due (if triggers
met)
2015: IPAB’s decisions will be implemented by HHS Secretary
CONCERNS ABOUT IPAB
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
• No checks and balances or judicial review
• Politicized process - politically appointed board members; hospitals already
secured exemption from cuts through 2019.
Impact on Patient Care
• Virtually impossible to control Medicare spending without impacting patient
access to doctors and treatment options.
• IPAB will likely cut payments to doctors covered under Medicare, causing
many to leave the program and not accept Medicare payments.
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 $400
billion that was cut from Medicare as part of health care reform.
IPAB: NOT THE RIGHT SOLUTION
•
Whatever your feelings are about the new health care reform law,
there is one part that everyone should be concerned about: IPAB –
the Independent Payment Advisory Board.
•
IPAB is a new entity that will be responsible for reducing Medicare
spending.
•
IPAB will have the power to make cost-cutting decisions about
Medicare with little oversight and no means for individuals or doctors
to challenge its decisions.
•
In its efforts to control Medicare spending, IPAB will end up limiting
patients’ access to medical care.
•
Something needs to be done to control Medicare spending, but IPAB
goes too far.
SPEAKING OUT AGAINST IPAB
“As it now stands, the Independent Payment Advisory Board would put in place another arbitrary
system, in the mold of the Medicare physician payment formula and could leave physicians
subject to two sets of cuts…The AMA will work to stop the IPAB from causing this type of
double-jeopardy situation for physicians and compromising access to care for seniors and baby
boomers.”
“IPAB also worries consumer organizations such as the seniors lobby AARP, which fears that
Medicare savings targets could have an ‘unintended impact on beneficiaries’ access to or
quality of care,’ according to spokesman David Allen.”
January 26, 2011 –The Politico – “Health Industry and
Lawmakers Move Against Medicare Spending Board”
“America’s hospitals support the repeal of IPAB because its existence permanently removes
Congress from the decision-making process and threatens the long-time, open and important
dialogue between hospitals and their elected officials about the need of local hospitals and how
to provide the highest quality care to their patients and communities…we are deeply concerned
that removing elected officials from the decision-making process could result in deeper cuts to
the Medicare program in the future.”
October 26, 2010 – AHA Letter to Sen. John Cornyn
SPEAKING OUT AGAINST IPAB
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
AIDS Institute
Alliance of Specialty Medicine
American Hospital Association
American Medical Association
Association of American Medical Colleges
Easter Seals Disability Services
Healthcare Leadership Council
Leadership Council of Aging Organizations
NAMI
National Committee to Preserve Social Security and Medicare
National Grange
PhRMA
U.S. Chamber of Commerce
Vietnam Veterans of America
Volunteers of America
SUMMARY
• With the sound intent of cutting Medicare costs, IPAB goes too far.
• IPAB’s mandatory, no-recourse judgments by members - who are
accountable to no one - put critical medical decisions in the
hands of bureaucrats.
• IPAB will unintentionally scare doctors away from Medicare,
limiting access to treatments and medications.
• Let’s reduce Medicare spending by cutting fraud, waste and
high administrative costs before we start cutting payments for the
health care products and services patients need.
• Providers, patient advocates, seniors and others are speaking out
against IPAB.