Understanding The Independent Payment Advisory Board
Over and over again, Republicans have distorted the role of the Independent Payment Advisory Board (IPAB) created by the Affordable Care Act. IPAB is a 15-member board appointed by the president and confirmed by the Senate, and its role is to make recommendations on how to reduce Medicare spending. Contrary to conservatives' claims, the IPAB is prohibited from rationing care, increasing taxes, changing Medicare benefits, changing eligibility, or increasing beneficiary premiums or cost-sharing requirements.
IPAB's Role Is To Make Recommendations To Reduce The Growth Of Medicare Spending
IPAB Makes Recommendations To Reduce Growth Of Medicare Spending. According to the Kaiser Family Foundation: "The 2010 health reform law (the Patient Protection and Affordable Care Act, also referred to as the ACA) establishes a new Independent Payment Advisory Board (IPAB) with authority to issue recommendations to reduce the growth in Medicare spending, and provides for the Board's recommendations to be considered by Congress and implemented by the Administration on a fast-track basis." [Kaiser Family Foundation, April 2011]
IPAB Helps Guarantee The Health Care Law's Medicare Cost-Containment Goals Will Be Reached. According to the Center for American Progress: "The Affordable Care Act establishes this board to serve as a guarantor that the law's cost-containment goals will actually be achieved. If the government's main health care program for the elderly and disabled Medicare exceeds its per capita cost-growth targets under the new law, then the Independent Payment Advisory Board is empowered to recommend ways to reduce program expenditures by changing the way Medicare pays health care providers." [Center for American Progress, 3/21/11]
IPAB Must "Recommend Reductions In Medicare If Spending Per Capita Is Projected To Exceed Specific Targets." According to the Washington Post: "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 the 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." [Washington Post, 5/8/11]
Amount IPAB Can Cut Per Year Is Limited. According to the Center for American Progress: "Regardless of the [ACA Medicare spending] targets, the total amount that can be cut in any given year is limited; the annual limit starts at 0.5 percent of program spending for 2015, rising to 1.5 percent by 2018 and for later years. Both CBO and CMS project that Independent Payment Advisory Board-directed cuts through 2019 will be fairly small because other ACA provisions will produce most of the required savings. From 2020 on, CMS projects that no action by the new board will be required because the provider payment limits will achieve all the needed savings." [Center for American Progress, October 2010]
If Projected Spending For Medicare Doesn't Exceed The Targets The Board Makes No Recommendations. According to the Washington Post:
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. The CBO is expecting Medicare spending to remain below the threshold that requires action. [Washington Post, 5/8/11, emphasis original]
Obama: IPAB Will "Recommend The Best Ways To Reduce Unnecessary Spending While Protecting Access To The Services That Seniors Need." In his April 13 speech on the deficit, President Obama said: "We will change the way we pay for health care — not by the procedure or the number of days spent in a hospital, but with new incentives for doctors and hospitals to prevent injuries and improve results. And we will slow the growth of Medicare costs by strengthening an independent commission of doctors, nurses, medical experts and consumers who will look at all the evidence and recommend the best ways to reduce unnecessary spending while protecting access to the services that seniors need." [WhiteHouse.gov, 4/13/11, emphasis added]
White House Staffer: "IPAB Is A Backstop — It Would Only Take Effect If Medicare Costs Grow Too Fast." White House Deputy Chief of Staff Nancy-Ann DeParle wrote: "IPAB is a backstop — it would only take effect if Medicare costs grow too fast. We're already implementing a series of reforms that will improve the quality of care and reduce costs. In fact, according to Congressional Budget Office projections, Medicare spending won't hit the targets that would cause IPAB's recommendations to take effect in the next decade. But independent experts agree that IPAB will offer constructive ideas and help keep Medicare cost growth per enrollee affordable in the long run." [WhiteHouse.gov, 4/20/11]
IPAB Is Prohibited From Rationing Care, Increasing Taxes, Or Changing Medicare Benefits Or Eligibility
IPAB Cannot Ration Care, Increase Taxes, Change Benefits Or Eligibility, Or Increase Premiums And Cost-Sharing Requirements. According to the Kaiser Family Foundation: "The Board is prohibited from submitting proposals that would ration care, increase taxes, change Medicare benefits or eligibility, increase beneficiary premiums and cost-sharing requirements, or reduce low-income subsidies under Part D. Prior to 2019, the Board is also prohibited from recommending changes in payments to providers and suppliers that are scheduled to receive a reduction in their payment updates in excess of a reduction due to productivity adjustments, as specified in the health reform law." [Kaiser Family Foundation, May 2010]
FactCheck.org: "It's Wrong To Say That The Advisory Board Will Ration Care." FactCheck.org addressed Rep. Paul Ryan's (R-WI) claim that IPAB rations care:
Ryan twice warns of Obama's plan to "ration" health care for the elderly. He also says, "The greatest threat to the health security of America's seniors is the President's plan to deeply and systematically ration Medicare."
Ryan spokesman Conor Sweeney told us in an e-mail that the claim of rationing refers to funding for the Independent Payment Advisory Board created by the federal health care law. But it's wrong to say that the advisory board will ration care or that it will be run by bureaucrats, as we wrote when Sarah Palin made a similar claim.
The Patient Protection and Affordable Care Act says the advisory board "shall not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums." Also, the board isn't made up of Washington bureaucrats. The 15 voting members will be appointed by the president in consultation with congressional leaders; they must include doctors and other health care professionals, economists and health care finance experts, and representatives of consumers and seniors, as the American Medical Association explains. There will also be three non-voting members: the Health and Human Services secretary, and the administrators of the Centers for Medicare and Medicaid Services and the Health Resources and Services Administration. [FactCheck.org, 5/6/11, emphasis added]
IPAB Members Will Be Appointed By The President And Confirmed By The Senate
IPAB Has 15 Full-time Members That The President Appoints And The Senate Confirms. According to the Kaiser Family Foundation: "IPAB is established as an independent board in the executive branch, composed of 15 full-time members appointed by the President and confirmed by the Senate. The statute sets out an array of qualifications for Board members: expertise in health care, economics, research and technology assessment, experience with employers and third-party payers, and consumers. It requires a balance between urban and rural representation. A majority of members must be non-providers." [Kaiser Family Foundation, April 2011]
Obama Wants To Fill The Board With "Doctors, Nurses, Medical Experts And Consumers." According to the Washington Post, "Obama hasn't nominated anyone yet, but said last month that he hopes to fill the slots with 'doctors, nurses, medical experts and consumers.'" [Washington Post, 5/8/11]
Board Members Will Serve Six-Year Terms. According to the Washington Post, "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." [Washington Post, 5/8/11]
IPAB Helps Takes The Politics Out Of Medicare Payment Decisions
IPAB Recommendation Process Requires Congress To Implement Proposal Or Pass An Amendment Meeting The Same Targets. Tim Jost wrote in the New England Journal of Medicine: "Each September 1, the IPAB must submit a draft proposal to the secretary of health and human services. On January 15 of the following year (beginning with 2014), the board must submit a proposal to Congress. If the board fails to submit a proposal on deadline, the DHHS must itself submit a proposal. Congress must consider the proposal under an expedited procedure. Congress cannot consider any amendment to the proposal that does not meet the same cost-reduction goals, unless both houses of Congress (and three fifths of the Senate) vote to waive this requirement. If Congress fails to adopt a substitute provision complying with the statute by August 15, the DHHS must implement the board's proposal." [New England Journal of Medicine, 7/8/10]
IPAB "Insulate[s]" Medicare From The "Normal Politics Of Congressional Decision-Making." Neera Tandeen wrote in The New Republic: "At a time when rising health care costs are a concern for families' pocketbooks and the federal budget, the IPAB was a means to maintain public oversight of Medicare but insulate it from the normal politics of congressional decision-making, thus helping ensure that best medicine was the driver of cost reductions." [The New Republic, 4/30/11]
IPAB Was Partly Created "To Mitigate The Influence Of Politics And Stakeholders On Medicare Payment Decisions." According to the Kaiser Family Foundation: "The Independent Payment Advisory Board was established, at least in part, to mitigate the influence of politics and stakeholders on Medicare payment decisions and give authority to a group of outside experts to recommend savings proposals, rather than Members of Congress." [Kaiser Family Foundation, May 2010]
IPAB "Was Specifically Designed To Reduce The Influence Of 'Special Interests' On Medicare Payment Policy." Kaiser Health News wrote: "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." [Kaiser Health News, 5/8/11]