Starting in 2013, the CMS' chief actuary must project whether per capita Medicare spending will exceed a target growth rate in the next two years, which would trigger the IPAB to recommend ways to achieve savings that make up the difference.
“While the proponents claim that beneficiaries will be held harmless from the board's decisions, how can IPAB impose sharp cuts to providers without any adverse impact on their patients?” House Budget Committee Chairman Paul Ryan, the Wisconsin Republican who is chief architect of a plan to privatize Medicare through a premium-support system, said in his opening remarks at his committee's hearing July 12. “Given their unprecedented new power over Medicare,” he continued, “to whom are these 15 bureaucrats accountable?”
Ryan later expressed concern to Sebelius about investing “all of the power and money decisions into the hands of 15 people who aren't even elected” and the possibility of providers eliminating services if they're not paid adequately. “First of all, IPAB, as you know, in the statute, doesn't come into effect unless Congress has not taken action,” Sebelius responded. “So Congress is in the driver's seat from day one,” she said, emphasizing later that IPAB is prohibited from making recommendations that would ration care, raise beneficiary premiums, increase cost-sharing, reduce benefits or change Medicare eligibility.
In a second hearing the next day, Rep. Frank Pallone Jr. (D-N.J.), ranking member on the House Energy and Commerce's Health Subcommittee, said he supports the Affordable Care Act but opposes the IPAB because it's not the job of an independent agency to interfere in congressional matters. He also said Congress relies on MedPAC for recommendations, but those suggestions are not automatic.
“MedPAC is well-respected and, oftentimes, Congress does consider and implement their recommendations,” said Eric Zimmerman, an attorney with McDermott, Will and Emery in Washington. “But they are just that—merely recommendations,” he said, adding that the IPAB “has authority to put forth recommendations that, unless Congress acts, will become law. So it's vested with enormous authority and additional powers that MedPAC does not have.”
Zimmerman also said it could be difficult to find qualified candidates who could withstand the scrutiny of serving as a presidential appointees on the IPAB because it has become so politicized and also be confirmed by the Senate.
Sebelius said in the Energy and Commerce hearing that it's “absolutely the president's intention that when the provision would begin to operate, there would be appointees.” Those appointed are supposed to represent a range of backgrounds, fields and geographic locations and include physicians, employers, third-party payers, consumers and the elderly. For their time, they will be compensated at Level 2 of the government's executive pay schedule, which was $165,300 for 2010. And the funding for those positions will come from the Medicare trust fund.
“People talk about IPAB likes it's 15 bureaucrats who are in a closed room that issue an edict,” Stuart Guterman, vice president for payment and system reform at the Commonwealth Fund, told Modern Healthcare. Guterman, who previously worked at the CMS, MedPAC and the CBO, also testified last week. “I don't think that process should work that way; I don't think it's intended to work that way; and I don't think we should let it work that way.”
Meanwhile, physicians are opposed to the IPAB, largely because it comes on top of—and is reminiscent of—Medicare's sustainable growth-rate formula for physician pay, which will force a 29.5% cut next year if Congress doesn't act. Practices are telling the Medical Group Management Association they will reduce the number of Medicare patients they see or drop out of the program, said Anders Gilberg, senior vice president for government affairs. “The IPAB is flawed because it's the same macro-level, arbitrary spending target system that almost completely mirrors that of the failed SGR system.”
To date, there are 165 co-sponsors to Roe's legislation to repeal the IPAB provision in the House. Rep. Tim Murphy (R-Pa.), a psychologist who sits on the Energy and Commerce Health Subcommittee, said the government continues to invent new ways to overcome its deficiencies and inefficiencies.
“What is it supposed to do different from MedPAC,” Murphy said of the IPAB, “and how is CMS going to handle this? I go back to this point: It takes an act of Congress between you and your doctor to decide what they're going to do,” he added. “And it shouldn't be that way. That's frightening.”