President Obama recently received a harsh letter from an important ally. The National Committee to Preserve Social Security and Medicare, an organization that has long supported the president’s health care reform efforts, wrote to express its opposition to the health care law’s Independent Payment Advisory Board (IPAB).
Made up of 15 presidential appointees, IPAB is slated to become Medicare’s new budgetary watchdog beginning in 2014.
If Medicare’s spending looks as if it is going to exceed its allowable annual increase as designated by the program’s chief actuary, IPAB will draft a series of cost-containment measures. Congress will review those measures during a short four-month window and either accept them in full - the law doesn’t permit each recommendation to be considered on its own - reject them and replace them with equivalent cuts, or vote to reject them with a three-fifths supermajority in the Senate.
If Congress isn’t able to reach a decision during those four months, IPAB’s recommendations automatically become law. The law also forbids court challenges to IPAB’s decisions. When it comes to cutting Medicare to meet spending targets, IPAB is all-powerful.
IPAB’s cost control is supposed to operate within strict boundaries. Changes in premiums, eligibility requirements and benefits are off-limits. What that means, experts agree, is that the panel’s ax will fall largely on reimbursements for services to participating providers, such as physicians.
IPAB’s proponents tout the unelected panel as a cost-control measure that will save Medicare billions of dollars without affecting - much less degrading - the quality of patient care. Unfortunately, this just is not the case.
Reimbursement rates for doctors participating in Medicare are already at bare-bones levels. Almost a third have capped the number of new Medicare patients they’ll take on, and a significant number are refusing to accept any more at all. The Congressional Budget Office (CBO) explains that the primary reason for this is that physicians receive 20 percent less through Medicare reimbursements than they do through private health insurance reimbursements.
The response of doctors is understandable: When the costs of patient care aren’t met by Medicare’s dwindling reimbursements, what choice do they have? IPAB will only exacerbate this trend. Thanks to IPAB, rationing medical care will be left squarely on the shoulders of this country’s medical providers.
It’s because of this that groups such as the National Committee to Preserve Social Security and Medicare - along with my association and more than 200 other groups - are demanding not just changes to the IPAB, but its elimination.
Opposition to IPAB started among conservatives more broadly opposed to the health care reform law. But the base of opposition has shifted in recent months. With the efforts of opponents including Rep. Allyson Schwartz, Pennsylvania Democrat, Rep. Kathy Castor, Florida Democrat, and the five other Democratic congressional co-sponsors of a new IPAB repeal bill, it’s become very clear that lawmakers on both sides of the political aisle see this measure as detrimental to their constituents, especially the country’s 47 million Medicare beneficiaries.
In addition to the politicians and advocacy groups demanding IPAB’s repeal, a large swath of the medical community has gotten involved as well. In June, more than 75 associations, societies, councils and academies representing 26 states and dozens of health care specialties sent a joint letter to members of Congress outlining the damage IPAB will do to “patient access to quality health care.”
In their letter, they also raise the valid point that this unelected body has the authority to “override the normal legislative process” for something as important as Medicare, a bad precedent to set.
Medicare is in dire straits. According to a recent report from its trustees, the health care program is projected to run out of money in 2024 - five years sooner than estimated in last year’s report. Any effective solution needs to be developed now and, as a prerequisite, maintain access to care.
Before the health care bill passed, Medi-care spending cuts were ultimately Congress’ responsibility. Changes were made in a transparent and open way. Lawmakers were given the opportunity to balance various policy goals. Stakeholders had the opportunity to share their concerns and ideas. Delegating such authority to an unaccountable body like IPAB undermines the role of Congress.
By the time IPAB would begin its work, it could be too late and its agenda too harsh. That’s why more and more Americans from both political parties are joining independents in speaking out: IPAB is not a solution. It sets a bad precedent and could produce even worse policy options. Let’s end IPAB before it begins.
Robert B. Blancato is the executive director of the National Association of Nutrition and Aging Services Programs.