More Democrats join GOP against Medicare cost-control board

Washington -- An effort to kill a cost-control board for the Medicare program before it gets off the ground appears to be gaining some momentum on Capitol Hill.

House Republicans held two committee hearings on the future of the Medicare Independent Payment Advisory Board the week of July 11. Republicans have been united against the IPAB, stating it would lead to government rationing of health care. The GOP has picked up support from several key Democrats, who are calling for a repeal of the board.

Rep. Frank Pallone Jr. (D, N.J.), the top-ranking Democrat on the House Energy and Commerce health subcommittee, said during a July 13 hearing that he never had supported the IPAB despite voting for the health system reform law that authorized it. Other system reforms in that statute could reduce health costs and improve quality without need for the cost-control board, he said.

Pallone compared the board to the commission responsible for reviewing military bases and recommending closures. He called the Base Realignment and Closure process a "monumental failure."

"I'm opposed to independent commissions or outside groups playing a legislative role other than on a recommendatory basis," Pallone said. "It's not the job of an independent commission to get involved in congressional matters -- in this instance health care policy for Medicare beneficiaries."

Rep. Allyson Schwartz (D, Pa.) also told the subcommittee that she supports legislation sponsored by Rep. Phil Roe, MD (R, Tenn.), to eliminate the board.

The IPAB is charged with recommending spending cuts when Medicare costs exceed projected targets, possibly leading to pay reductions for doctors and others. The earliest the IPAB could act is 2014, with the first cuts taking effect the following year.

President Obama has not yet made appointments to the 15-member board. Health and Human Services Secretary Kathleen Sebelius told the subcommittee that the president intends to fill the panel.

IPAB would make recommendations only when targets aren't met, Sebelius said. Congress also does not have to accept policy decisions made by the IPAB, she added. But in that case, lawmakers would be required to meet the same growth targets with legislation of their own.

Several medical associations favor rescinding the board before it holds its first meeting. On July 6, the American Medical Association sent a letter urging the House and Senate to approve legislation to repeal the board. The health system reform law placed important health care payment and policy decisions in the hands of an independent body with little accountability, the letter states.

AMA President Peter W. Carmel, MD, said the IPAB would impose another illogical formula for Medicare payments on top of the Medicare sustainable growth rate formula. Currently, the SGR is set to cut Medicare physician pay by 29.5% on Jan. 1.

"We cannot continue to implement the same arbitrary formulas and expect different results -- to reduce growth in Medicare spending, Congress should work in a bipartisan manner to promote improvements in quality, access and efficiency through delivery system reform," Dr. Carmel said.

De facto rationing?

Sebelius defended the IPAB by comparing its members to the members of the Medicare Payment Advisory Commission, which makes nonbinding recommendations to Congress. IPAB also would be prevented by law from approving changes that ration care or restrict patient access to physicians.

But adjusting payment to arbitrarily low rates that don't reflect market costs would lead to a de facto rationing of care, said Scott Gottlieb, MD, a resident fellow with the American Enterprise Institute, a conservative think tank in Washington, D.C.

"The issue of rationing versus squeezing payments is a distinction without a difference," Dr. Gottlieb said. "We've seen already that when you squeeze off payments it effectively closes off access to care."

Medicare pay policy set by the IPAB could lower Medicare rates to what Medicaid pays now in many states, suggested Avik Roy, a health care analyst and senior fellow with the Heartland Institute, an organization based in Chicago committed to free-market solutions to problems. He noted that Medicaid patients often have issues finding physicians who accept program enrollees.

Patients who can't access a physician won't get the care they need to treat illnesses or injuries before they become a serious problem, Roy added. "The fact that the IPAB is explicitly restricted from changing benefits doesn't matter if someone can't access a doctor in the first place."

Setting up the IPAB

The health system reform law set aside $15 million to establish the IPAB. Rep. Michael Burgess, MD (R, Texas), questioned whether any of the federal dollars had been spent, but Sebelius said there would be no drawdown on funds until the board was functioning.

"I don't know about a specific timetable. I know it's absolutely the president's intention that by the time the IPAB provision would begin to operate there will be members of the board," Sebelius said.

GOP lawmakers said they were troubled that a majority of the seats on the board could be filled using recess appointments by the president, a move that would bypass the Senate confirmation process. Those sitting on the board likely would have health policy and finance backgrounds and resemble the current makeup of MedPAC. Practicing physicians treating Medicare patients could not sit on the board.

"There is a strong conflict-of-interest barrier for the IPAB where they cannot be receiving payment from they system and make recommendations at the same time," Sebelius said.

Rep. Phil Gingrey, MD (R, Ga.), asked hearing witnesses if they had been asked to serve on the board. Dr. Gottlieb said he's had a conversation with Senate staffers about serving on the IPAB but would be reluctant to participate on the board. Judy Feder, PhD, a senior fellow with the Center for American Progress, said she has not discussed an appointment with the administration but would welcome the opportunity to be an IPAB member.