Whatever happened to the Independent Payment Advisory Board?

Various challenges have prevented Obama from nominating board members

Topics: Medicaid, Reimbursement, Finance, Medicare, Revenue Cycle

October 11, 2012

The Independent Payment Advisory Board (IPAB) continues to draw criticism for its broad authority to change the Medicare program, but it remains unclear when (or if) the board will ever get off the ground.

What is IPAB?

Starting in 2014, IPAB—a statutory board of 15 advisers created by the Affordable Care Act (ACA) that is tasked with keeping Medicare costs in check—must submit annual cost-cutting proposals to Congress whenever the five-year growth in Medicare spending per beneficiary is expected to exceed a set growth limit.

Those proposals would be automatically implemented unless Congress enacts legislation to block it, a provision of the ACA created to curb political influence over difficult Medicare decisions. However, the proposals cannot include efforts to restrict benefits, ration care, raise premiums or cost-sharing requirements, or change eligibility criteria.

In last week's president debate, Republican nominee Mitt Romney cited IPAB as his third reason for wanting to repeal the Affordable Care Act. "It puts in place an unelected board that's going to tell people ultimately what kind of treatments they can have," he claimed.

Why isn't IPAB up and running?

But the board is still stalled, CQ Weekly notes, because many challenges block its implementation.

All 15 members named to the panel must be nominated by President Obama and confirmed by the Senate. CQ Weekly notes that any Obama nomination to the board is unlikely to obtain the necessary 60 votes to overcome a filibuster.

"The president couldn't even get [Don Berwick] appointed to run the Medicare program," says Sen. John Cornyn (R-Texas), adding, "And the head of Medicare has far less power than these board members will have."

The board may hold little appeal for qualified candidates. In addition to the intense Senate scrutiny, ACA requires that IPAB members have certain skills and backgrounds, such as actuarial science experts and health professionals, and prohibits members from maintaining any other employment during their six-year board terms.

Moreover, CQ Weekly notes that the Obama administration need not rush to find and confirm candidates. Although the board must begin producing reports in 2014, it is unlikely that it will commence its cost-cutting responsibilities in the near future. The Congressional Budget Office earlier this year said Medicare would remain below the spending threshold through to 2022.

What happens if IPAB is not in place when Medicare hits the spending threshold?

If IPAB fails to produce a spending report when Medicare has hit its spending threshold, the ACA gives IPAB's responsibility to the secretary of HHS. Policy experts have interpreted that provision to include scenarios where the spending threshold is reach before IPAB has been put in place.

"That certainly does provide a further inducement for Congress to actually approve, or actually to consider, nominees for the board, because that surely is better than having the secretary have to do it," says Center on Budget and Policy Priorities' Paul Van de Water (Attias, CQ Weekly, 10/8 [subscription required]).

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