IPAB: What it Means for Medicare Patients

You may have been hearing a lot about the Independent Payment Advisory Board, or IPAB, in the media lately. And maybe you’ve been wanting to learn more about the Board and what it could mean for Medicare beneficiaries.

The IPAB was established by the 2010 Affordable Care Act, and it is charged with making recommendations to reduce the growth in Medicare spending, if Medicare exceeds a certain growth rate. The Board consists of 15 members nominated by the President and confirmed by the Senate.

The IPAB is specifically prohibited from making recommendations that would ration health care, raise beneficiary premiums, restrict benefits, modify eligibility criteria or reduce low-income subsidies under Part D, alter cost sharing, or suggest changes to reduce payment rates for inpatient and outpatient hospital services, inpatient rehabilitation, psychiatric facilities, long-term care hospital and hospices until 2020.

We certainly agree with Congress and the Obama Administration that more needs to be done to ensure sustainable healthcare costs, but there are few essential flaws with IPAB that we believe will ultimately limit seniors’ access to quality healthcare.

The way that IPAB is currently designed will give them the ability to dramatically cut payments to healthcare providers and physicians who provide services to Medicare beneficiaries. Great concern has been expressed that doing so may result in fewer providers being willing to accept Medicare patients. Ultimately, limiting seniors’ access to quality providers.

We are also concerned by the lack of oversight of IPAB. The Board has the power to change laws previously enacted by Congress. When IPAB puts forth proposals, the Secretary of the Department of Health and Human Services is required to implement the board’s recommendations unless Congress passes a law with the same cost savings. If Congress fails to adopt a substitute proposal, IPAB’s proposal must be implemented, meaning that IPAB’s proposal does not need Congressional approval to go into effect. Furthermore, the Secretary’s implementation of IPAB’s recommendations is exempt from judicial and administrative review. We are also troubled that there is no patient representation on the Board and that IPAB is not required to hold public meetings where the voices of patients, caregivers and families can be heard. Important health care decisions that can dramatically impact patients will be made by an unelected Board without accountability to the public.

Many Members of Congress have also expressed concerns about allowing the IPAB to be created and legislation has been introduced to repeal IPAB.

Two Congressional Hearings were recently held to discuss IPAB. One on July 12th in the House Budget Committee and the second on July 13th in the House Energy and Commerce Committee. WAPC President, Theresa Morrow, participated in the July 13th hearing. You can watch the hearing and read testimony from participants here (Ms. Morrow’s testimony begins around 4:13).

We will continue to follow IPAB and update you on any further movement on legislation around this issue.

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