Published 3/1/2013
Kristin Leighty

IPAB Repeal Gets a Second Chance in the House

Bipartisan legislation rapidly gaining support

Kristin Leighty

Bipartisan legislation introduced by Reps. David P. Roe, MD (R-Tenn.) and Allyson Schwartz (D-Penn.) aims to repeal the Independent Payment Advisory Board (IPAB), a key provision of the Patient Protection and Affordable Care Act (PPACA). HR 351, the Protecting Seniors’ Access to Medicare Act, was introduced on Jan. 23, 2013, and has already garnered more than 120 cosponsors.

In addition, as this issue of AAOS Now went to press, Sen. John Cornyn (R-Texas) has introduced the Protecting Seniors’ Access to Medicare Act of 2013, cosponsored by Sen. Orrin Hatch (R-Utah) and 30 other Republican senators.

What is the IPAB?
The IPAB provision was originally intended as a mechanism for curbing Medicare spending. The 15-member board has the authority to issue recommendations that would result in Medicare savings; it cannot, however, make any recommendations that would change Medicare coverage benefits, premiums, eligibility, or taxes.

Currently, the Medicare Payment Advisory Commission (MedPAC) is responsible for advising Congress on issues regarding Medicare’s short- and long-term administrative concerns. These recommendations require Congressional action to take effect.

What can IPAB do?
The IPAB will have authority to make direct modifications to the Medicare program unless Congress overrides its proposed changes. In addition, a super majority would be required in the Senate to overturn the IPAB’s recommendations.

Although the IPAB’s proposals are technically presented to Congress, the Board retains extensive control. PPACA “fast-tracks” the recommendations, forcing Congress to consider them quickly and to match any proposed cuts with equivalent reductions elsewhere in the federal budget.

The Centers for Medicare and Medicaid Services (CMS) is responsible for determining whether projected Medicare spending exceeds the established annual targeted growth rate. If spending exceeds the target, the IPAB is triggered to develop and submit spending reduction proposals in January of the year before the recommendations would be implemented.

For example, by April 30 of this year, CMS must determine whether projected spending in 2015 would exceed the targeted growth rate. If so, the IPAB would have to submit its recommendations by January 2014, and the cuts would go into effect in 2015.

If the panel cannot come to a decision on spending, its power is automatically transferred to the Secretary of the U.S. Department of Health and Human Services, who is still required to make the cuts necessary to meet the mandated spending targets. The Secretary’s proposal must then be implemented unless Congress takes action under the expedited procedure set forth in the law. Therefore, prior proposals to simply defund IPAB will not prevent reductions from occurring.

Who is IPAB?
The law states that fewer than half of the 15 members of the IPAB can be involved in providing or managing the delivery of Medicare items and services, including healthcare providers. Furthermore, no member can serve as a practicing physician or be otherwise employed.

These restrictions have made for a short bench of willing applicants. Board members are appointed by the President and require Senate confirmation, but President Obama has not yet nominated anyone, despite the fact that the first trigger for the IPAB is next month. In the midst of its controversy it is likely any nominees would face staunch opposition from Senate Republicans. In 2012, $15 million was appropriated for IPAB operations; future funding for the panel is expected to be based on this figure adjusted for inflation.

Physician response
Among those critical of IPAB, physician organizations—including the American Association of Orthopaedic Surgeons (AAOS)—have been vocal opponents. The AAOS is concerned about the impact that IPAB-directed cuts will have on patient access to musculoskeletal care as well as about the ability of the Board to focus on long-term delivery system reforms, due to the yearly spending targets that must be met.
The AAOS letter to the House of Representatives [112th Congress] urging repeal of the IPAB.

Based on similar concerns, other physician organizations such as the Alliance of Specialty Medicine—a coalition of 13 specialty groups—have urged Congress to permanently repeal IPAB. Many groups fear that because providers such as hospitals and hospice care, which represent roughly 37 percent of all Medicare payments, are exempt from IPAB cuts until 2020, any cuts will disproportionately fall on other providers, including orthopaedic surgeons. The AAOS and more than 25 other medical societies support HR351.

Looking ahead
Lawmakers who oppose the controversial provision feel a renewed urgency to repeal IPAB in its entirety, in part because the IPAB’s implementation date is quickly approaching. A repeal measure introduced last year also garnered bipartisan support. The measure, however, was incorporated with medical malpractice reform into HR 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011. As a result, many Democratic sponsors withdrew their support. The bill easily passed the Republican-controlled House, but was not acted upon in the Senate.

In an article featured in Politico Pro last month, Rep. Roe echoed his belief that “the House should not give up its constitutional authority to control these things” while also noting that the public has no avenue to dispute IPAB decisions. He agrees that Medicare costs need to be controlled, but favors measures that would increase transparency in health costs and provide consumers with a more vested interest in their healthcare decisions.

This time, Rep. Roe says, Republican leaders have promised a straight up-or-down vote. He remains confident that, if voted on, the bill will pass the House. He indicates, however, that Democratic support in the Senate is not yet secured. Senate Majority Leader Harry Reid (D-Nev.) has not publicly discussed a timetable for Senate consideration of the legislation, but is understandably awaiting House action to make any public statements.

To see a complete list of HR 351 cosponsors, visit the AAOS legislative action center. (http://capwiz.com/aaos/home/)

Kristin Leighty is the manager of the Orthopaedic Political Action Committee in the AAOS office of government relations. She can be reached at leighty@aaos.org

At the Annual Meeting
The future of the IPAB may be one of the topics that Presidential Guest Speakers Erskine B. Bowles and Alan K. Simpson discuss during their presentation on “America’s Debt and Deficit Crisis: Issues and Solutions,” March 21 at 11 a.m. in the McCormick Place Grand Ballroom. The 2010 National Commission on Fiscal Responsibility and Reform, which the two cochaired, recommended expanding and strengthening the authority of the IPAB authority to allow it to make recommendations on hospitals and other exempt providers, among other issues.