May
9, 2011 - It sounds like a new Apple product, but IPAB is actually a
controversial board at the heart of a highly charged battle over
Medicare, the federal health program for the elderly and disabled.
The
Independent Payment Advisory Board was created by the 2010 health
care law. Last month, in releasing his deficit-reduction plan, President
Barack Obama called for increasing the panel's authority, saying it was
critical to controlling the costs of Medicare, estimated at $524 billion
in fiscal 2010.
Republicans and some Democrats
have denounced IPAB, saying it will be made up of unelected bureaucrats
who will wind up rationing care to Medicare beneficiaries. As the
spotlight turns back to the deficit, debates about IPAB are moving front
and center. Here's a look at the issues:
Beginning with fiscal 2015, if
Medicare is projected to grow too quickly, IPAB will make binding
recommendations to reduce spending. Those recommendations will be sent
to Capitol Hill at the beginning of the year, and if Congress doesn't
like them, it must pass alternative cuts -- of the same size -- by
August. A supermajority of the Senate can also vote to amend the IPAB
recommendations. If Congress fails to act, the secretary of health and
human services is required to implement the cuts by default.
Who will serve on the panel?
It will have 15 full-time
members, and only a minority of them can be health care providers. The
president is required to get suggestions from leaders of both parties in
Congress in nominating 12 of the 15 appointees. For the other three, he
doesn't have to consult Congress. The members have to be confirmed by
the Senate. Obama hasn't nominated anyone yet, but said last month that
he hopes to fill the slots with "doctors, nurses, medical experts and
consumers." Board members, who will serve six-year terms, are to be paid
the salary of senior executives in the federal government -- $165,300
this year -- and cannot hold any other jobs.
Why is IPAB so controversial?
Hospitals, doctors, drug
companies and some patients' groups are worried IPAB will recommend
reductions in Medicare payments -- which they say already are too low --
and that they won't have the time or ability to counter the cuts during
accelerated congressional action. Doctors and drug companies are
particularly worried that they'll bear a lot of the burden because
hospitals
and nursing homes aren't subject to IPAB's cost-cutting recommendations
until fiscal 2020. Lawmakers -- mostly Republicans but some Democrats as
well -- say that IPAB will have too much power and are pressing for
repeal of the provision.
Some critics, including House
Budget Committee Chairman Paul Ryan, R-Wis., charge that IPAB will
ration needed care for seniors.
Defenders counter that the law
bars it from rationing care, restricting benefits or changing
eligibility criteria. And, in response to complaints from the health
care industry, Sen. John Rockefeller, D-W.Va., who was one of IPAB's
architects, said that the board was specifically designed to reduce the
influence of "special interests" on Medicare payment policy. Those
interests, he and others say, have kept Congress from making the tough
decisions needed to hold down spending and reduce the deficit.
How exactly will IPAB slow Medicare spending?
Under the health care law, the
board is required to recommend reductions in Medicare if spending per
capita is projected to exceed specific targets. From fiscal year 2015
through 2019, that target is based on inflation gauges.
Beginning in 2020, the target
is based on the growth of the gross domestic product plus one percentage
point. Proponents note that IPAB won't impose a "hard cap" on spending,
but rather will recommend ways to reduce spending. "IPAB is meant to be
a fallback if the health law doesn't control spending as well as we
think it will," said Robert Kocher, head of McKinsey & Co.'s Center for
U.S. Health System Reform and a former special assistant to Obama on
health care.
What if Medicare's projected spending doesn't exceed the targets?
In that case, the board isn't
required to make the recommendations.
And in fact, the Congressional
Budget Office
in March said that is likely to be the situation for almost a
decade. CBO is expecting Medicare spending to remain below the threshold
that requires action.
But expectations could prove
to be wrong. For one thing, CBO could change its outlook. Also, Obama
wants to tighten IPAB's target in later years to GDP plus 0.5 percentage
point. He has also talked about giving IPAB some additional clout to
enforce its recommendations, but hasn't provided details.
Even if IPAB doesn't issue
binding recommendations in any particular year because of slow Medicare
growth, it must produce annual reports on national health care costs,
access, use and quality, which will be more comprehensive than
government reports now available. It also may issue nonbinding
recommendations on a range of health care issues. And beginning in 2015,
it must offer biannual guidance on ways to slow the nation's total
health care spending, including nonfederal spending.
May
9, 2011 - It sounds like a new Apple product, but IPAB is actually a
controversial board at the heart of a highly charged battle over
Medicare, the federal health program for the elderly and disabled.