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IPAB Would Reduce Access to Care, Witnesses Tell Ways and Means Panel

Wednesday, March 7, 2012

By Ralph Lindeman  

The Independent Payment Advisory Board, created under the health care law to help control Medicare costs, lacks flexibility to do much more than cut provider payments that would lead to a reduction in access to care, witnesses told a House Ways and Means panel March 6.

The four health care experts who testified before the House Ways and Means Health Subcommittee differed mainly in their prescriptions for how Congress should deal with IPAB, with three witnesses favoring IPAB's repeal and another witness offering suggestions for improving IPAB's effectiveness.

The hearing came on the same day that the House Energy and Commerce Committee, by voice vote, approved the Medicare Decisions Accountability Act (H.R. 452), which would repeal IPAB (see related article).

The Ways and Means Committee, which shares jurisdiction over the bill with Energy and Commerce, will conduct its markup of the bill on March 8, according to the committee staff director.

Following action on the bill in the full Ways and Means Committee, the repeal bill is expected to head to the House floor unless the committees need to meld their versions of the bill to reflect minor changes made during the markups. Once on the House floor, the bill is expected to pass. With Democrats in control of the Senate, however, the measure is unlikely to come for a vote in that chamber.

IPAB Required to Submit Cost Control Plan

Beginning in 2014, in years when Medicare's costs grow faster than target rates, IPAB—a 15-member board appointed by the president and subject to Senate confirmation—must develop a plan for reducing Medicare spending by a specific amount.

The plan proposed by IPAB, or an alternative proposed by the health and human services secretary, would take effect unless Congress overrides the proposal under a fast-track procedure set forth in the Patient Protection and Affordable Care Act.

Call for Repeal

The first three witnesses who testified during the 90-minute hearing favored repeal of IPAB.

 “IPAB does not have any practical alternative to simply squeezing prices in the Medicare program,” said Scott Gottlieb, a resident fellow at the American Enterprise Institute. Because IPAB is required by PPACA to achieve its savings in the short term, Gottlieb testified, “it can do little more than manipulate Medicare's current price schedules and coding process” for medical procedures.

“The problem we have in Medicare is not a short-term problem that can be fixed with price squeezes,” he said, adding, “We have already been trying and failing at that for the last 45 years.”

Moreover, because of the limited tools available to it, “IPAB will put more systemic payment reforms further out of reach,” Gottlieb asserted.

Dr. David F. Penson, testifying on behalf of the American Urological Association, noted that because PPACA prohibits IPAB from restricting benefits or changing eligibility criteria, “the board will be left with few options apart from making cuts to providers.”

He warned, “These cuts could be driven so low that physicians will be forced to limit the number of Medicare beneficiaries they see, opt out of the Medicare program, or be driven out of practice altogether.”

Also favoring repeal of IPAB was Katy Beh Neas, senior vice president for government relations with Easter Seals. She criticized IPAB's statutorily required focus on costs as a missed opportunity to expand Medicare reforms to include health care delivery and quality of care.

“For people with disabilities and chronic conditions, it is through better coordination and provision of quality care that real changes in health status can be achieved, not in the reduction of spending per person,” she testified.

Recommendations for Improvement

Marilyn Moon, senior vice president and health program director at the American Institutes for Research, agreed that IPAB's current design was problematic but offered suggestions for how the panel could be improved instead of repealed.

First, she urged that each IPAB member “have a longer time horizon of six-year terms,” rather than five members appointed for one-year terms, five members appointed for three-year terms, and five members appointed for six-year terms, under current law.

Second, she noted that the conflict-of-interest restrictions and the full-time paid status of board members “may make it difficult to truly attract the types of high quality members that would be desired.” In addition, the requirement that IPAB members terminate all other group affiliations could discourage candidates who may wish to participate, she added.

Panel Members Voice Opposition

Most lawmakers on the panel voiced criticism of IPAB, though for different reasons. Republicans were united in their opposition to IPAB as an “unaccountable board of Washington bureaucrats,” in the words of Rep. Wally Herger (R-Calif.), chairman of the subcommittee.

Rep. Fortney Pete Stark (D-Calif.), the panel's ranking member, echoed Herger in “strongly opposing” the Medicare payment board but said he did so because “Congress has always stepped in to strengthen Medicare's finances when needed.”

The lone subcommittee member voicing support for IPAB was Rep. Ron Kind (D-Wis.), who said: “I support it because I've seen how feckless Congress is. Congress doesn't have the backbone or guts to make these decisions itself.”

 

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