IPAB Repeal Arguments Weak, For Now

The Independent Payment Advisory Board, a creation of the Patient Protection and Affordable Care Act, has lots of enemies, even though it doesn't really exist yet.

The American Medical Association is against it, and so is the American Hospital Association according to a letter released just last week. Lots of people in Congress, despite the fact that as a group, they're responsible for the fact that it became part of the law, are also against it.

They've introduced at least three bills since the beginning of the year to try to repeal it. Almost laughably, the AHA's recent letter to Sen. John Cornyn (R-TX), says it supports repeal (he's filed a repeal bill) because IPAB "permanently removes Congress from the process of making decisions regarding Medicare payment."

Ask supporters of the sustainable growth rate formula (if you can find any) if that statute ever "permanently removed" Congress from meddling in Medicare payment decisions. That formula, voted into law with the Balanced Budget Act of 1997, has been delayed by, guess who—Congress—umpteen times since 2002.

That was the first time that lobbying groups successfully convinced Congress that the payment revision for that year (-4.8%) would mean doctors would drastically reduce their Medicare patient panels as a result.

Poof. Cut. Gone.

Now, thanks to many such delays since then, the scheduled cut to physician Medicare rates on January 1, 2013, had been projected at a ludicrous 26.5%. The most recent "fiscal cliff" budget deal has again put off that cut until January 1, 2014, and it will likely never take effect again, even though it remains law.

Given how well they have handled the general budget, the deficit, and the national debt, removing Congress permanently from the process of making decisions regarding Medicare payment might be just the thing to get some control over the healthcare cost monster. If only it were so easy.

Let's remember for a minute: IPAB doesn't yet exist and both the AMA and AHA supported the passage of the Affordable Care Act. While the groups concede the cost problem, they fight like mad to make sure the costs don't come at their members' expense. They shouldn't be expected to do anything else.

But that doesn't mean Congress should necessarily listen to them any more than any other lobbyist group that is trying to prevent its ox from being gored. Healthcare spending is likely to devour all federal spending in a couple of decades unless something is done to control its growth, yet even when something like IPAB gets made into a law, Congress tries to kill it before it even exists.

I'm no general defender of the omnibus PPACA, but let's be honest and admit that despite the many changes the law will inflict on the business of healthcare, cost control isn't one of the major ones. In fact, that's the main criticism of the Act. Despite its name, it does very little to make healthcare more affordable.

In fact, IPAB, which was created as a version of the Medicare Payment Advisory Commission (MedPAC) that actually has the teeth to implement its regulations, is perhaps the only piece of the legislation that will actually attempt to hold down medical cost growth. Congress routinely ignores recommendations of MedPAC, so that clearly doesn't work, which is why IPAB was created in the first place.

And yet hospitals, physicians, and many other medical interests are attempting to make it stillborn. Not to worry. They still have lots of time to kill it off, as they will not be subject to IPAB's decisions until 2020!

Reading the opposing views of IPAB, the charge that it puts an "unelected" team of "bureaucrats" in charge of healthcare payment policy makes it seem un-American.

Yet that claim puts me in the same frame of mind as those (generally politicians again) who decried the stupidity of the sequester yet never found a way to do it better. In that case as in this one, remember that Congress created both IPAB and the sequester. That's why it ultimately went into effect.

No one who depends on getting elected for his or her (generous) paycheck ever wants to make a decision that cuts government funding to those who elect them. Yes, taking a meat cleaver to the federal budget isn't the most effective way to reduce spending, but given the nature of the game, it appears to be the only thing that works.

Maybe the fact that IPAB members don't have to worry about getting re-elected (the 15-member board is appointed by the President to varying terms) is the precise reason so many in the healthcare industry are so afraid of IPAB—it might just work. Maybe IPAB is part of the solution. Something has to be. At least we should let it try. As these bills have shown, it can always be repealed.