Debate over repealing elements of the Affordable Care Act (ACA) has revealed deep divisions within Congress, but little is being said about abolishing the Independent Payment Advisory Board (IPAB)—an ACA creation whose elimination has bipartisan support.
The AMA recently issued a statement calling for IPAB’s repeal to the U.S. House of Representatives Energy and Commerce Committee’s subcommittee on health. Then, five days later, the Association joined with more than 650 other organizations in a joint letter to Congress calling for the panel’s elimination.
Under the ACA, the chief actuary of the Centers for Medicare and Medicaid Services (CMS) calculates whether Medicare’s projected average growth rate in per capita spending falls below a specified target. The projections are determined over a five-year period that includes the previous two years, the current year and the following two years. If targets are exceeded, IPAB would make recommendations that must be enacted unless an alternate plan to achieve the same savings is approved by a three-fifths Congressional majority.
The AMA believes the 15 president-appointed IPAB members would wield too much power for a panel of unelected officials and that its likely prescriptions for providing short-term dips in spending could sabotage long-term health system reform efforts already underway.
“The AMA is concerned that spending cuts recommended by IPAB may be overly broad, not based on sufficient evidence, and likely to negatively impact structural health care reform,” the AMA’s statement to the health subcommittee reads. “Additionally, the IPAB process does not lend itself to long-term planning regarding how to improve the Medicare system. Therefore, the AMA believes Congress should retain the power to make all Medicare spending decisions, and work with stakeholders to develop a long-range plan to achieve Medicare savings goals.”
IPAB has been granted “unprecedented powers” to take actions that are not subject to any check, balance or judicial review, the AMA said in the statement.
Former President Barack Obama and President Donald Trump never appointed anyone to IPAB and neither has the House or the Senate. In the absence of recommendations from IPAB, its powers would be transferred to the Health and Human Services secretary—a scenario the AMA and more than 650 other health care organizations, which sent the letter to Congress, also find troubling.
“This places an enormous degree of power in the hands of one unelected individual,” the letter states.
Senate Majority Whip Jon Cornyn, R-Texas, has introduced an IPAB repeal measure, as has Sen. Ron Wyden, D-Oregon. In the House, a bipartisan bill has been championed by two physicians, Rep. Phil Roe, MD, R-Texas, and Rep. Raul Ruiz, MD, D-California.
Congress has until Aug. 15 to take advantage of a provision in the ACA to fast-track abolishing the IPAB, and the AMA is encouraging it to do so. If Congress does not act by the deadline, they can still repeal IPAB, but it will get more expensive.
“Congress has already recognized the threat that IPAB poses to Medicare, and there remains an overwhelming bipartisan, bicameral support in Congress and among major stakeholders to repeal IPAB,” the AMA says in its statement. “And, with projections indicating a growing cost to repeal IPAB in the future, the time to act is now.”
The CMS actuary report was issued July 13 and determined that IPAB action was not needed this year. The average per capita spending growth was calculated to be 2.14 percent, which fell below the targeted rate of 2.87 percent (this is the average between the 1.84 percent overall growth rate in the Consumer Prices Index for All Urban Consumers and the 3.91 percent growth rate in the CPI’s medical care expenditure category).
Starting next year, a new formula will be used to trigger IPAB action. For 2018 and beyond, the IPAB will be activated if Medicare spending growth exceeds the estimated Gross Domestic Product plus 1 percent.