Medicare Payment Panel Likely to Remain in Final Reform Bill

While it may have dual names in the healthcare reform debate—such as the Independent Payment Advisory Board or the Independent Medicare Advisory Board—the possibility of its existence has created a firestorm of controversy in the healthcare community because of its perceived restrictions. However, the provision—now included in the Senate bill—may not be totally out in the cold.

Earlier this month, President Barack Obama expressed support for an independent federal board that would, in his words, improve the long term solvency of Medicare, while strengthening the quality of care and reducing unnecessary or inefficient spending. The board concept itself recently has received support from groups of economists and other healthcare groups—encouraging oversight of not just Medicare but to the private sector.

Whether the House will be sold on the board idea remains to be seen. It was excluded from the House reform bill, but recent closed-door discussions indicate that a board, with appointed members, could be part of the final compromise bill.

The board proposal has seen a number of different changes since Sen. Jay Rockefeller (D-WV) introduced the idea in May, with the most recent occurring during the Senate reform debate. Under the current Senate bill, it is proposed that the board would be made up of 15 members appointed by the president, with advice from the Senate. This membership would include physicians, employers, third-party payers, experts in outcomes research, experts in pharmaco-economics, and pharmacy.

Last month, amendments were proposed and approved by Rockefeller, and Senators Joseph Lieberman (I-CT) and Gordon Whitehouse (D-RI) that call for tightening the provision by:

• Eliminating the carve out for hospitals and hospices. No one provider type or group of providers would be given special treatment.
• Changes the savings targets. This amendment would replace the phase in approach to the 1.5% savings target in 2018 with an immediate savings target of 1.5% beginning in 2015.
• Accelerates timeline for congressional consideration. This amendment moves up the implementation date for the board's recommendations (or a congressional alternative) from August 15 to June 15.
• Provides board recommendations in years of controlled cost growth in Medicare. Fast track consideration of board recommendations would be made even in years where no spending reductions are required.
• Requires recommendations to contain costs in the private sector. The board would be required to submit a report to Congress and the Secretary of Health and Human Services regarding the Medicare recommendations that are also applicable to the private sector. In years where there are no Medicare spending targets to achieve, the commission could offer recommendations to the private sector that are outside of the scope of Medicare.