AAFP, ACP Break Ranks With Organized Medicine on IPAB

May 07, 2013

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How the IPAB Is Designed to Work

For the time being, nobody need fear the IPAB. Under a complicated set of guidelines laid out in the ACA, the 15-member board will not spring into action in 2013. For that matter, President Barack Obama has yet to nominate anyone to the IPAB. If and when he does, the nominees will require Senate approval, a dicey proposition given that Republicans hold the filibuster card.

The ACA states that the IPAB will advise Congress on ways to curb the average per capita growth of Medicare spending if it exceeds a projected target over 5 years. Initially, the target equals the average of the growth of the consumer price index (CPI) for urban residents and the CPI for medical costs during that 5-year span. The Centers for Medicare & Medicaid Services has already crunched the numbers for the first 5-year period (from 2011 to 2015) and determined that per capita growth in Medicare spending will fall short of the target, agency announced on April 30. As a result, the IPAB can sit on its hands in 2013.

However, the ACA calls for an annual look at Medicare spending during a rolling 5-year period. If this accounting exercise in 2014 reveals that spending growth does exceed the target, then the IPAB would begin to draft cost-control recommendations, which would go before Congress in 2015 and take effect in 2016. Although the ACA expects bold action, it explicitly prohibits the IPAB from proposing anything that would ration healthcare, raise Medicare beneficiary premiums and cost-sharing, restrict benefits, or modify eligibility criteria.

The law creates a "fast track" for IPAB recommendations in Congress that speeds up their consideration. If lawmakers do not approve them by August 15, they must enact policies that save just as much. Waiving this requirement requires a three fifths vote in the Senate. The secretary of the Department of Health and Human Services is obliged to implement IPAB recommendations if Congress does not do its job.

But what happens if President Obama cannot win Senate confirmation of any IPAB nominees and the board sits empty? In that case, the law states that the Department of Health and Human Services secretary must send Congress a plan that would satisfy the law's cost-control mandate.


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