The Independent Payment Advisory Board (IPAB), which has had 15 empty seats since it was formed, is on the chopping block amid negotiations on Capitol Hill.
Despite having never been used, the Independent Payment Advisory Board (IPAB) has been controversial since it was first authorized by the Affordable Care Act in 2010.
Lawmakers have tried repeatedly to eliminate the Medicare cost-saving mechanism, and with Thursday’s push to finalize a spending package to avert a second government shutdown in as many months, they seem closer to the goal than ever.
Although final details were still being hammered out, Kaiser Health News reported Thursday that a deal taking shape in the Senate includes a repeal of the IPAB provisions. The repeal is unlikely to generate much resistance in the House, where members voted 307-111 to kill IPAB in a standalone bill last fall.
That vote came after the Congressional Budget Office (CBO) released a report estimating the impact eliminating IPAB would have on the budget. The move would increase direct spending by an estimated $17.5 billion over the next decade, according to the CBO report, which included a note of caution that the prediction could be way off.
“That estimate is extremely uncertain because it is not clear whether the mechanism for spending reductions under the IPAB authority will be invoked under current law for most of the next ten years,” the report states.
The idea behind IPAB was to slow the rate at which Medicare costs were rising by installing a 15-member panel of outside experts appointed by the president with Senate confirmation. The board would be required to propose Medicare spending reductions when the program’s projected spending exceeds a prescribed threshold.
But spending growth has stayed below the target growth rate each year since 2013, so no such recommendations have been required, and no one has ever been appointed to the board, according to the Kaiser Family Foundation.
The Centers for Medicare and Medicaid Services Actuary does project, however, that Medicare spending growth will exceed the threshold for the first time in 2021, which would trigger the IPAB’s statutorily required recommendations. The CBO report includes the expected savings under current law in estimating how much repealing IPAB would cost.
Critics have voiced concerns the board usurps legislative power and puts it in the hands of the executive branch, while some have worried the IPAB’s recommendations could harm Medicare beneficiaries.
In an opinion piece for The Hill last month, Forbes Media Chairman and Editor-in-Chief Steve Forbes called IPAB “one of the most repulsive and punitive parts of ObamaCare” and referred to it as “the ‘death panel’” that ACA opponents had warned against.
“In the name of keeping costs ‘under control’, it can slash expenditures, which will hit seniors particularly hard,” Forbes wrote. “Cutting expenses here means rationing medical care.”
Others contend that claims of healthcare “rationing” are unwarranted fear-mongering.
“Efforts to repeal IPAB are misguided,” wrote Paul N. Van de Water, a senior fellow at the Center on Budget and Policy Priorities. “If successful, such efforts could lead to more draconian steps, such as replacing guaranteed Medicare benefits with a premium support system, or voucher, whose value would fall farther behind the cost of health care each year.”
—Steven Porter is an associate content manager and online news editor for HealthLeaders, a Simplify Compliance brand.