What the Law says about the Medicare Independent Payment Advisory Board (IPAB)

2013

In appears that in the quest to kill Obamacare and create opposition among the population almost anything goes. One of the sections of the Law most misrepresented is the Medicare Independent Payment Advisory Board – known in some radical circles as “death panels.”

I had thought this was one issue put to rest, but recently I heard several commentators attempting to rile up the troops once again with misinformation. An op-ed recently stated the IPAB was already cutting physician payments under Medicare when in fact, the Board does not even begin to make recommendations until next January. Most of the critics fail to mention that the Board will only make recommendations related to Medicare and is specifically prevented from making proposals to ration health care, raise revenues or Medicare beneficiary premiums, increase Medicare beneficiary cost-sharing (including deductibles, coinsurance, and co- payments), or otherwise restrict benefits or modify eligibility criteria.

Before you accept what you hear and before you pass along misinformation on this issue, take a few minutes to read what the law says about the IPAB. I have copied the section of the Affordable Care Act that applies to the Board. I have also placed in bold the text that is most often misrepresented.

‘‘(b) PURPOSE.—It is the purpose of this section to, in accordance with the following provisions of this section, reduce the per capita rate of growth in Medicare spending—5 ‘‘(1) by requiring the Chief Actuary of the Centers for Medicare & Medicaid Services to determine ing each year to which this section applies (in this section referred to as ‘a determination year’) the projected per capita growth rate under Medicare for the second year following the determination year (in this section referred to as ‘an implementation year’); ‘‘(2) if the projection for the implementation year exceeds the target growth rate for that year, by requiring the Board to develop and submit during the first year following the determination year (in this section referred to as ‘a proposal year’) a proposal containing recommendations to reduce the Medicare per capita growth rate to the extent required by this section; and ‘‘(3) by requiring the Secretary to implement such proposals unless Congress enacts legislation pursuant to this section.
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‘(c) BOARD PROPOSALS.— ‘‘(1) DEVELOPMENT.—

‘‘(A) IN GENERAL.—The Board shall develop detailed and specific proposals related to the Medicare program in accordance with the succeeding provisions of this section.

‘‘(B) ADVISORY REPORTS.—Beginning January 15, 2014, the Board may develop and submit to Congress advisory reports on matters related to the Medicare program, regardless of whether or not the Board submitted a proposal for such year. Such a report may, for years prior to 2020, include recommendations regarding improvements to payment systems for providers of services and suppliers who are not otherwise subject to the scope of the Board’s recommendations in a proposal under this section. Any advisory report submitted under this subparagraph shall not be subject to the rules for congressional consideration under subsection (d).

‘(2) PROPOSALS.— ‘‘(A) REQUIREMENTS.—

Each proposal submitted under this section in a proposal year shall meet each of the following requirements:

‘‘(i) If the Chief Actuary of the Centers for Medicare & Medicaid Services has made a determination under paragraph (7)(A) in the determination year, the proposal shall include recommendations so that the proposal as a whole (after taking into account recommendations under clause (v)) will result in a net reduction in total Medicare program spending in the implementation year that is at least equal to the applicable savings target established under paragraph (7)(B) for such implementation year. In determining whether a proposal meets the requirement of the preceding sentence, reductions in Medicare program spending during the 3-month period immediately preceding the implementation year shall be counted to the extent that such reductions are a result of the implementation of recommendations contained in the proposal for a change in the payment rate for an item or service that was effective during such period pursuant to subsection (e)(2)(A).

‘‘(ii) The proposal shall not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums under section 1818, 1818A, or 1839, increase Medicare beneficiary cost-sharing (including deductibles, coinsurance, and co- payments), or otherwise restrict benefits or modify eligibility criteria.

‘‘(iii) In the case of proposals submitted prior to December 31, 2018, the proposal shall not include any recommendation that would reduce payment rates for items and services furnished, prior to December 31, 2019, by providers of services (as defined in section 1861(u)) and suppliers (as defined in section 1861(d)) scheduled, pursuant to the amendments made by section 3401 of the Patient Protection and Affordable Care Act, to receive a reduction to the inflationary payment updates of such providers of services and suppliers in excess of a reduction due to productivity in a year in which such recommendations would take effect.

‘‘(iv) As appropriate, the proposal shall include recommendations to reduce Medicare payments under parts C and D, such as reductions in direct subsidy payments to Medicare Advantage and prescription drug plans specified under paragraph (1) and (2) of section 1860D–15(a) that are related to administrative expenses (including profits) for basic coverage, denying high bids or removing high bids for prescription drug coverage from the calculation of the national average monthly bid amount under section 1860D–13(a)(4), and reductions in payments to Medicare Advantage plans under clauses (i) and (ii) of section 1853(a)(1)(B) that are related to administrative expenses (including profits) and performance bonuses for Medicare Advantage plans under section 1853(n). Any such recommendation shall not affect the base beneficiary premium percentage specified under 1860D–13(a).

‘‘(v) The proposal shall include recommendations with respect to administrative funding for the Secretary to carry out the recommendations contained in the proposal.

‘‘(vi) The proposal shall only include recommendations related to the Medicare program.

‘() ADDITIONAL CONSIDERATIONS.—In developing and submitting each proposal under this section in a proposal year, the Board shall, to the extent feasible—

‘‘(i) give priority to recommendations that extend Medicare solvency;

‘‘(ii) include recommendations that—

‘‘(I) improve the health care delivery system and health outcomes, including by promoting integrated care, care coordination, prevention and wellness, and quality and efficiency improvement; and

‘‘(II) protect and improve Medicare beneficiaries’ access to necessary and evidence-based items and services, including in rural and frontier areas;

‘‘(iii) include recommendations that target reductions in Medicare program spending to sources of excess cost growth;
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‘(iv) consider the effects on Medicare beneficiaries of changes in payments to providers of services (as defined in section 1861(u)) and suppliers (as defined in section 1861(d)); ‘‘(v) consider the effects of the recommendations on providers of services and suppliers with actual or projected negative cost margins or payment updates; and ‘‘(vi) consider the unique needs of Medicare beneficiaries who are dually eligible for Medicare and the Medicaid program under title XIX.

‘(C) NO INCREASE IN TOTAL MEDICARE PROGRAM SPENDING.—

Each proposal submitted under this section shall be designed in such a manner that implementation of the recommendations contained in the proposal would not be expected to result, over the 10-year period starting with the implementation year, in any increase in the total amount of net Medicare program spending relative to the total amount of net Medicare program spending that would have occurred absent such implementation.

Related articles

• The Right-Wing Assault On The IPAB and on Sane Health Policy (delong.typepad.com)
• AMAC continues to call for repeal of Obamacare’s scary IPAB provision (gloucestercitynews.net)