Medicare pay board would be repealed under GOP bill

Some physician specialty organizations are backing Senate legislation to eliminate the new Medicare panel established by the health reform law.

By Chris Silva — Posted Aug. 9, 2010

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A group of key Republican senators have introduced a bill that would repeal the Medicare Independent Payment Advisory Board, a new federal panel created by the health system reform law whose mission will be to propose how to extend the program's solvency.

The opponents of the new board said passage of their bill, the "Health Care Bureaucrats Elimination Act," ultimately will protect seniors' rights. Sen. John Cornyn (R, Texas) on July 27 introduced the legislation, which is co-sponsored by Sens. Orrin Hatch (R, Utah), Jon Kyl (R, Ariz.), Pat Roberts (R, Kan.) and Tom Coburn, MD (R, Okla.).

"America's seniors deserve the ability to hold elected officials accountable for the decisions that affect their Medicare, but IPAB would take that away from seniors and put power in the hands of politically appointed Washington bureaucrats," Cornyn said in a statement. "This bill to repeal IPAB is just one step toward starting over with real health care reform that empowers patients instead of beltway bureaucrats."

As part of the health reform law enacted in March, a 15-member board appointed by the president and approved by the Senate will submit proposals aimed at improving Medicare quality and cutting costs when the program's per capita growth rate exceeds a target. The board's recommendations could take effect as early as 2015 unless Congress either passes an alternative proposal with the same level of budgetary savings or overrides the original legislation by two-thirds majorities in both houses.

The Obama administration has promoted IPAB as a necessary tool to rein in Medicare spending. During a July 28 speech at the Brookings Institution in Washington, D.C., outgoing White House budget chief Peter Orszag, PhD, said the health reform law contains the "most promising set of changes ever enacted to reduce the rate of health care cost growth over the long term."

Establishing IPAB was necessary "so that reforming the health care system is not a one-time event but an ongoing process with the goal of improving care and lowering costs," Orszag said.

The Congressional Budget Office estimated that the board would save the government $13 billion over 10 years.

Physician opposition

Several physician organizations, including the American Medical Association, have been opposed to the Medicare pay board. They say it could lead to yet another level of mandated cuts to doctor pay on top of any rate reductions that are already required by the Medicare statute.

In a statement issued March 21, then-AMA president J. James Rohack, MD, said the IPAB framework "could result in misguided payment cuts that undermine access to care and destabilize health care delivery." He added that the AMA "will be relentless in our pursuit of ... corrections to IPAB." The Association has not taken a position on the Senate Republican bill that would repeal the board.

The Alliance of Specialty Medicine -- an organization of national medical societies based in Washington, D.C. -- announced its support for Cornyn's legislation, echoing his concerns about an unelected panel that has the power to mandate Medicare cuts.

Alex B. Valadka, MD, a neurosurgeon based in Austin, Texas, said the alliance is concerned that patients eventually will be less able to access care if Medicare resources are reduced.

"We are thankful that these senators are making patients a priority and working to repeal the IPAB," Dr. Valadka said. "As specialty doctors, our main goal is to help ensure that patients have access to the health care they need to get better and, as doctors, we're very concerned that the IPAB will have unprecedented power to make cuts to the Medicare program."

The American College of Physicians has said that while it supports the concept of an independent board, the current structure of IPAB does not ensure adequate representation of primary care. Nor does the board ensure that any cost reductions would not adversely affect health care quality, ACP said.

Since 1997, the Medicare Payment Advisory Commission has made nonbinding recommendations to lawmakers on how to set Medicare rates. The commission, which is currently composed of 17 members, issues reports each March and June that serve as the primary vehicle for its advice. But MedPAC has no power to implement any of its recommendations, and Congress often takes its own path when it comes to setting rates.

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The new Medicare board's role

Beginning Jan. 15, 2014, the Medicare Independent Payment Advisory Board is directed to develop and submit to Congress recommendations for program changes, which could take effect as early as 2015. In developing each proposal, the panel is expected to:

  • Give priority to recommendations that extend Medicare solvency.
  • Target reductions in program spending to sources of excess cost growth.
  • Consider the effects of the recommendations on physicians and suppliers with actual or projected negative cost margins or payment updates.
  • Consider the effects on Medicare beneficiaries of changes in payments to physicians and suppliers.
  • Institute no increases in total amount of net program spending that may occur over 10 years.
  • Submit a draft copy of each proposal to the Medicare Payment Advisory Commission.

Source: The Patient Protection and Affordable Care Act

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