IPAB is Medicare’s New Hammer for Spending Accountability

Because of the changes the ACA has already made to provider reimbursement and Medicare Advantage plan funding, Dr. Feder said Medicare’s average annual growth rate for the next decade is projected to be a full percentage point below per capita growth in GDP. On top of that, she said, “the ACA’s other payment reform experiments have the potential to improve quality and cut spending growth even further by reducing payment for overpriced or undesirable care, like unnecessary hospital readmissions, and rewarding efficiently provided, coordinated care.”

By Dr. Feder’s analysis, the IPAB would likely not be triggered for a decade, but it stands ready as a backup, if needed. Indeed, she said she favors extending the IPAB’s authority beyond Medicare, allowing a system-wide spending target that creates an all-payer incentive to ensure that providers really change their behavior to boost quality and efficiency.

If the IPAB does come into play, Dr. Feder said, surgeons have more to worry about than primary care physicians, because the board’s cost reduction proposals would likely focus on services for which she says overpayment is the most acute, such as imaging and high-cost specialty procedures.

Otolaryngologists Respond

Opponents of the IPAB, including the American Academy of Otolaryngology­­–Head and Neck Surgery (AAO-HNS), the American College of Surgeons, the American Medical Association and several other medical specialty and state medical societies, argue that the board inappropriately strips Congress of its authority over Medicare payment policy and insulates policymaking from important medical practice realities and their impact on patient care.

Under the current law, fewer than half of IPAB members can be health care providers, and none are permitted to be practicing physicians or otherwise employed. “How are we going to pick 15 people whose judgments are better than anyone else’s?” asked David Nielsen, MD, AAO-HNS Executive Vice President and CEO. “The IPAB would be staffed by academicians and economists, just like the kind who came up with the SGR. It’s doubtful that an appropriate perspective of practicing physicians and patients can be obtained,” he added.

Dr. Nielsen said the IPAB would behave like the SGR, only worse. Just as the SGR unfairly burdens physicians with outdated assumptions about medical spending and unrealistic spending targets, he said, the IPAB has the same cost constraint principles in place. “But, unlike the SGR, we don’t have the transparency of hearings and debate about how the IPAB’s mandated cuts might overlook important cost-of-practice realities, put small-group practices out of business and jeopardize patient access to surgical care,” he said. And, unless the SGR is repealed, Dr. Nielsen said, “We’re stuck with the worst of both worlds, a double whammy of mandated cuts placed on the shoulders of physicians.” He noted that certain health care entities, including hospitals, are protected from the IPAB’s scrutiny until 2018.

Movement to Repeal the IPAB

One of the AAO-HNS’ chief legislative priorities is to repeal the IPAB through passage of H.R. 452, the Medicare Decisions Accountability Act of 2011, which has well over 200 bipartisan cosponsors. Two companion bills in the Senate, S. 2118 and S. 668, both introduced by Sen. John Cornyn on different dates, are provocatively named the “Health Care Bureaucrats Elimination Act: A bill to remove unelected, unaccountable bureaucrats from seniors’ personal health decisions by repealing the Independent Payment Advisory Board.”