The IPAB and what it means for you....

Despite popular belief the IPAB is not a new Apple Gadget, it is something far worse. I first heard of this yesterday while listening to BOORTZ, he suggested everyone do an internet search to learn more, I did just that, and credit KAISER HEALTH NEWS for the information.

The IPAB is the Independent Payment Advisory Board. What is it? It’s a board of 15 non-elected officials. With only a minority of them being health care professionals, Congress will nominate and vote on 12, and the President will have the power to nominate 3, all 15 will have to be voted on by the Senate.

Starting in 2015 what this panel will do is make binding recommendations to reduce Medicare spending. Those recommendations will be sent to Capitol Hill at the beginning of the year, and if Congress doesn't like them, it must pass alternative cuts -- of the same size -- by August. A supermajority of the Senate can also vote to amend the IPAB recommendations. If Congress fails to act, the secretary of health and human services is required to implement the cuts by default…  That is a scary thought!

The IPAB is so controversial because Hospitals, doctors, drug companies and some patients' groups are worried IPAB will recommend reductions in Medicare payments -- which they say already are too low -- and that they won't have the time or ability to counter the cuts during accelerated congressional action. Doctors and drug companies are particularly worried that they'll bear a lot of the burden because hospitals and nursing homes aren't subject to IPAB's cost-cutting recommendations until fiscal 2020. Lawmakers -- mostly Republicans but some Democrats as well -- say that IPAB will have too much power and are pressing for repeal of the provision.
Some critics, including House Budget Committee Chairman Paul Ryan, R-Wis., charge that IPAB will ration needed care for seniors. This meaning it could in reality become a death panel of sorts.

Defenders counter that the law bars it from rationing care, restricting benefits or changing eligibility criteria. And, in response to complaints from the health care industry, Sen. John Rockefeller, D-W.Va., who was one of IPAB's architects, said that the board was specifically designed to reduce the influence of "special interests" on Medicare payment policy. Those interests, he and others say, have kept Congress from making the tough decisions needed to hold down spending and reduce the deficit.
 

Between the years 2015-2019, Medicare is projected to reach specific targets based off the inflation gauge. Beginning in 2020, the target is based on the growth of the gross domestic product plus one percentage point. Proponents note that IPAB won't impose a "hard cap" on spending, but rather will recommend ways to reduce spending. "IPAB is meant to be a fallback if the health law doesn't control spending as well as we think it will," said Robert Kocher, head of McKinsey & Co.'s Center for U.S. Health System Reform and a former special assistant to Obama on health care.

So, what if Medicare doesn’t reach these projected targets? Then the board will make no new recommendations. The CBO is expecting Medicare to remain below its projected target, but expectations could prove to be wrong. For one thing, CBO could change its outlook. Also, Obama wants to tighten IPAB's target in later years to GDP plus 0.5 percentage points. He has also talked about giving IPAB some additional clout to enforce its recommendations, but hasn't provided details.

Even if IPAB doesn't issue binding recommendations in any particular year because of slow Medicare growth, it must produce annual reports on national health care costs, access, use and quality, which will be more comprehensive than government reports now available. It also may issue nonbinding recommendations on a range of health care issues. And beginning in 2015, it must offer biannual guidance on ways to slow the nation's total health care spending, including nonfederal spending.