House Bill Would Repeal Independent Pay Advisory Board

A bill has been reintroduced in the House to repeal the Independent Payment Advisory Board (IPAB) created by the health care reform law and scheduled to begin operating by April 30. Similar legislation passed the House in 2012 but was not taken up by the Senate.

The new bill is H.R. 351, the Protecting Seniors’ Access to Medicare Act, a bipartisan measure introduced by Reps. David P. Roe (R-Tenn.) and Allyson Schwartz (D-Pa.) with 100 co-sponsors.

It got quick support from the American Medical Association. Its president, Jeremy Lazarus, said, “IPAB is a panel that would have too little accountability and the power to make indiscriminate cuts that adversely affect access to health care for patients. Patients and physicians are still struggling with the frequent threat of drastic cuts from the broken SGR [sustainable growth rate] Medicare physician payment update formula. IPAB would be another arbitrary system that relies solely on payment cuts.”

IPAB supporters say it is a fail-safe mechanism to control Medicare spending growth when Congress fails to act and it removes politics from decisions affecting Medicare providers. Opponents, including pathology and clinical laboratory groups, say the board’s unelected officials would have power over spending that historically has been reserved to Congress.

The Board’s Mission
Under current law, the IPAB, whose members have yet to be appointed by the president and confirmed by the Senate, is required to make recommendations to Congress on reductions in Medicare spending, beginning in 2014, in any year when the per capita growth rate exceeds a target growth rate. The recommendations would be put on the legislative fast track and take effect unless Congress approved, within the statutory time frame, an alternative with the requisite savings.

The law also limits the IPAB, barring it from making any proposals that would ration care, increase beneficiary cost sharing, or otherwise restrict benefits or modify eligibility criteria.

Hospital payments are exempt from the board’s purview until 2020, so before then any required savings would have to come from cuts to clinical labs, pathologists, and other health care providers. However, the Congressional Budget Office has said the spending targets are unlikely to be triggered until at least 2022, so the board might not make recommendations before then.

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