Thursday's House vote to eliminate the Independent Payment Advisory Board, or IPAB as it is commonly known, provides Republicans and some Democrats with symbolic bragging rights and not much more. There's very little likelihood that the Democrat-controlled Senate, which is home to some of IPAB's biggest boosters, will even take up the issue during this legislative session.
That means IPAB, which is part of the massive Patient Protection and Affordable Care Act, remains the law of land…for now.
IPAB is the cost-cutting board empowered by PPACA to analyze the drivers of Medicare cost growth and recommend policies to control that growth.
IPAB membership
The President, in concert with Congressional leaders, will appoint 15 individual IPAB members who must be confirmed by the Senate. IPAB members will serve six years and make about $165,000 annually. The legislation mentions expertise in things like health finance and economics, actuarial science, and health facility management. Among the membership requirements: employers, physicians, consumers, and experts in prescription drug benefits.
It will be a full-time job, with members expected to keep up with healthcare cost trends, utilization numbers, patient access to care, and quality issues so they can step in when needed to make proposals to rein in Medicare cost.
There have been media reports that President Obama has reviewed some candidates for the IPAB board, but the administration is playing it close to the vest with public information about potential candidates. The board is supposed to be in place in 2013.
Timothy Jost, a law school professor at Washington & Lee University who has studied IPAB, tells HealthLeaders Media that he hasn't seen any movement toward putting IPAB in place. Noting that IPAB members won't be able to do research or consult during their six-year terms, he says, "I can't imagine anyone signing up for it."
How IPAB will work
Supporters see IPAB as similar to Medicare Payment Advisory Commission (MedPAC) but with the power to actually implement what it thinks needs to be done. IPAB recommendations to reduce Medicare costs will be put in place unless Congress votes to block them and comes up with equivalent cost-cutting measures.
In reducing costs, there are a lot of things IPAB can't do, such as raise Medicare revenues or premiums, increase Medicare beneficiary cost-sharing (including deductibles, coinsurance, and copayments), or restrict or reduce benefits. Critics contend that the only thing left for IPAB to regulate is some provider reimbursements, which could limit access to care. Hospitals are exempt from IPAB until 2020.
The board will look at Medicare costs through the lens of inflation as well as the gross domestic product.
There's a chance that IPAB won't kick into gear for a while. The Congressional Budget Office estimated in 2011 that, based on Medicare spending trends, it could be a decade before any IPAB action is needed.
What happens next?
Republicans in the House effectively framed the IPAB debate as their effort to defend seniors from a rationing board. They may have a good campaign issue to appeal to Medicare beneficiaries. Although the Senate is unlikely to take any IPAB action, the issue will be top of mind for senior voters.
Still, the Department of Health and Human Services has proven itself adept at implementing the ACA despite its critics. Look for HHS to continue to press for IPAB.
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
