IPAB Back in the Limelight

The Patient Protection and Affordable Care Act, along with modifications made by the Healthcare Education Affordability Reconciliation Act (collectively, the “Healthcare Reform Law”) was signed into law on March 23, 2010. One of the more controversial provisions of this legislation was establishing the Independent Payment Advisory Board or IPAB.

For those who may not remember, IPAB will be an independent 15-member panel composed of experts including doctors, consumers and patient advocates appointed by Congress and the President. Their charge will be to make “recommendations” to reduce health care spending when Medicare spending exceeds certain threshold levels. The Board will have significant power to change Medicare payment policy with little or no Congressional input. Indeed, the whole impetus behind the creation of the IPAB was a desire by some Members of Congress to remove Congressional influence from the Medicare policy-making process. Recommendations made by the Board are not binding until after 2015.

Under the law creating the IPAB, the Board’s recommendations for reducing Medicare spending are binding unless a super majority in Congress votes to overturn the policy and in turn also votes in favor of other changes in Medicare spending that would produce savings equal to the amount identified by the Board. Under this scenario, it was deemed highly unlikely that Congress would ever be able to enact such legislation thereby making the Board’s “recommendations” virtually binding.
Supporters of IPAB felt that Congress was too susceptible to public pressure when it came to making tough decisions about Medicare spending and what we needed was an independent board that could make the “right” decision devoid of public pressure.

Repealing the new Board has been a major objective of the GOP majority in the House of Representatives since they were elected in 2010. Equally important, the GOP opponents of the IPAB have been joined by a number of influential House Democrats in this effort.

On February 29th, the House Energy and Commerce Health Subcommittee voted 17 – 5 to abolish the Independent Payment Advisory Board. Joining all 15 Republicans on the Subcommittee were the Ranking Democrat, Frank Pallone (D-NJ) and Ed Towns (D-NY).

It is highly likely that the legislation abolishing IBAB (H.R. 452) will pass the House with strong bi-partisan support. Its fate in the Senate, however, is far less certain. The strongest advocates for the IPAB are in the Senate and they are expected to mount a spirited defense of the concept. At this point, it does not appear as though there are sufficient votes in the Senate to pass a bill abolishing the IPAB. This means that any effort to repeal the IPAB will not only have to pass the House and Senate, but pass with sufficient margins to be able to withstand an expected Presidential veto.

ADVOCATE will continue to provide updates as they become available

Best regards,
Kirk Reinitz, CPA
President & CEO