Concerns grow about health care payment advisory board

While news has reverberated from a federal judge’s ruling that a portion of the health care overhaul is unconstitutional, there is another part of the massive bill that more resembles the bipartisan deficit reduction board.

The Patient Protection and Affordable Care Act included a provision that created the IPAB, or Independent Payment Advisory Board. Its purpose is to cut the growth and maintain the solvency of Medicare through the recommendations of a 15-member panel.

The board is required, when growth in Medicare outpaces inflation, to propose cuts to Congress and Congress must adopt those changes unless it comes up with a better solution — in theory. The law has a degree of vagueness on how Congress would vote on those cuts if it disagreed with the IPAB’s proposals.

It will take a three-fifths majority of the Senate to override the proposals, but the measure doesn’t outline a number for the House to vote down recommendations. Even if there was unified disagreement with the IPAB suggestions, the supermajority in the Senate — 60 votes — is a hurdle that would present big challenges and large amounts of political capital.

The IPAB must include physicians, health professionals, employers, health economics researchers, and third party payers, such as health insurance company representatives.  Each member will serve a six-year term and the panel is scheduled to be appointed for duty during the next year.  Its work begins in 2012 with recommendations coming as early as 2014.

The IPAB is appointed by the President and confirmed by the U.S. Senate leaving a degree of politics in the selection process, which worries some.  Others are more concerned that this omnipotent Medicare panel will be the most influential policy body for health care in the U.S.

But Dr. Joe Thompson, Arkansas’ surgeon general, thinks the IPAB will take tough political choices out of politicians’ hands.

"This payment advisory board is obviously an effort de-politicize the necessary cost-containment strategies we need to put in place," Thompson said in an interview with Talk Business. "The political process is not the process through which you would try to make rational decisions of medical evidence or alternative payment choices. This is a mechanism to make sure that what we’re covering in Medicare has some evidence underneath it.”

While the first recommendations could come by 2014, there are exemptions to key groups – like acute care hospitals and inpatient rehab facilities – who won’t have to deal with the IPAB’s proposals until 2020. Thompson says some of their worries could be moot by that point.

For a rural state like Arkansas, however, Medicare reimbursements are an important stream of revenue for physicians, hospitals and clinics, although the state has a low per capita rate of reimbursement. Still, the effects could be devastating.

"This board is effectively unchecked, and could do some serious harm to Medicare recipients," said Jamesetta Smith, president and CEO of the Arkansas chapter of the Lupus Foundation of America. She thinks the short-term cost-containment goals of the board could reduce investments for innovations and cures if research hospitals, pharmaceutical companies or medical suppliers see sharp cuts to their Medicare reimbursements.

Smith is hoping the future Congress will modify the IPAB.

"A first step in protecting Arkansans and their access to health care is reforming IPAB.  We cannot let short‐term cost savings restrict investment in the research and development that will saves lives in the future," she said.