Created under the Democrats’ new health reform law, the IPAB is required to make cost-cutting recommendations when per-capita Medicare spending exceeds certain levels. If Congress objects to the proposals, lawmakers must offer their own solutions yielding equivalent savings.
The IPAB panel will consist of 15 members, appointed by the White House and confirmed by the Senate. It marks the first time since Medicare’s inception that the program has faced a spending cap.
On Wednesday, outgoing White House budget chief Peter Orszag said the IPAB is among the most important of the health reform provisions for sustaining Medicare, which is projected to go broke within a decade.
“After years of going in the wrong fiscal direction, the act changes course by enacting substantial deficit reduction, reduction this administration is committed to building on,” he said.
Many provider groups have a different take — they’re leery that the IPAB’s cost-cutting options are largely limited to reductions targeting them. Indeed, the reform law prohibits the IPAB from recommending changes that would hike costs to beneficiaries, ration care, increase taxes, alter Medicare benefits or slash subsidies under the prescription drug benefit.
Alex Valadka, a Texas neurosurgeon and spokesman for the Alliance of Specialty Medicine, summarized the concerns of provider groups Wednesday, warning that provider cuts would threaten seniors’ access to care.
“Charging the IPAB — a board of unelected bureaucrats — with the task of cutting more money from an already cash-strapped system will put patients at an even higher risk of being unable to access the health care they need,” Valadka said in a statement.
The issue highlights the pickle facing Washington policymakers as they try to reduce federal deficits in the face of special interests trumpeting the importance of each dollar spent. The IPAB — like the newly created White House fiscal commission — is a not-so-tacit acknowledgement that Congress has a terrible track record when it comes to budget reform.
“Somewhere along the way toward wooing Congress,” the New York Times’s Matt Bai wrote this week, “Mr. Obama seems to have decided that the problem, at least where reducing the cost of government is concerned, is Congress itself.”
The Medicare Payment Advisory Commission (MedPAC), a panel of medical experts that, since 1997, has made non-binding cost-cutting recommendations to Congress, has seen hundreds of billions of dollars worth of proposals ignored by lawmakers over the years.
The Republicans pushing for a IPAB repeal say that’s how it should be.
“MedPAC doesn’t always get it right, and its recommendations are carefully examined by Congress before legislative action.”