Medicare’s “Rationers” – the IPAB

Joe Paduda

Posted 12/19/11 on Managed Care Matters

Among the howls of indignation coming from anti-health reform legislators and more strident Presidential aspirants one can often hear the outrage about “faceless government bureaucrats” rationing medical care to our elderly.

(we’ll leave aside that many of the howlers are the same ones screaming about out of control Federal entitlement spending…for now).

Turns out those faceless bureaucrats will likely never be seated, as all 15 members of the Independent Payment Advisory Board (IPAB) have to be approved by the Senate. Given the current toxic environment for appointees (see Donald Berwick et al), it’s highly likely Senators opposing health reform will do anything in their rather considerable power to block all appointments.

That’s unfortunate indeed, as the Board is one of the few real cost saving mechanisms we have. Here’s a brief outline of their responsibilities excerpted from an excellent piece in Health Affairs.

– if the Medicare chief actuary finds that the growth rate will exceed [a relatively low] target, the actuary must determine how much Medicare spending growth should be reduced. IPAB will then have to recommend specific steps that will curb the rate of growth in Medicare spending.

– The total amount of the Medicare savings IPAB can propose, and the type of savings, are both limited by law. The total amount of these savings cannot exceed 0.5 percent of total Medicare outlays in 2015; 1 percent of outlays in 2016; 1.25 percent in 2017; and 1.5 percent in 2018 and thereafter.

– IPAB cannot propose any recommendation to “ration” care; raise revenues; increase beneficiary premiums or cost sharing; restrict benefits; or alter rules for Medicare eligibility.

– The law directs the panel to give priority to measures that extend the solvency of the program, improve beneficiaries’ access to care, and improve the health delivery system and health outcomes, among others.

– IPAB can propose savings in any part of Medicare, except hospital payments in the short run. [pharmacy is also excluded, much to my dismay]

– Congress has the option of passing alternative legislation, but it must achieve the same results in terms of the magnitude of savings. If Congress does not act, the secretary of HHS is required to implement IPAB’s proposals by August 15.

And there you have it – an advisory board that is tasked with doing what Congress can so obviously not do – control Medicare cost growth – without rationing care, reducing benefits, or changing eligibility.

What does this mean for you?

Is there a better way to achieve real cost control in Medicare that has a chance of becoming signed legislation?

About Brian Klepper

Brian Klepper is a health care analyst, commentator and a Principal in Health Value Direct.
This entry was posted in Analytics, Benefits, Innovation, Medical Management, Physicians, Policy/Law/Regulation, Quality, Reform and tagged , , , , . Bookmark the permalink.

One Response to Medicare’s “Rationers” – the IPAB

  1. Doctorsh says:

    IPAB is being used to bypass Congressional authority. Is this constitutional?
    Is this just another way the present administration is trying to take the power away from elected representatives and give it to a politburo of bureaucrats and regulators?
    Cost savings can and should be achieved, but not this way. Give the power back to the people!

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