Politics may give HHS chief control of Medicare IPAB

Authorities on federal law said the Health and Human Services secretary would determine Medicare cuts for congressional fast-tracking if the cost-control board failed to convene.

By Charles Fiegl amednews staff — Posted June 3, 2013

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The powers of the Health and Human Services secretary would increase greatly if no one is appointed to Medicare's new cost-control board, the Congressional Research Service wrote to lawmakers in a recent memo.

Congress and President Obama have not yet recommended individuals to sit on the Medicare Independent Payment Advisory Board, as congressional Republicans have refused to submit names for consideration for a panel they oppose. In the absence of an IPAB, the responsibility for cutting the $586 billion Medicare program during years when projected per capita spending outpaced growth targets would fall to the HHS secretary, the memo stated. Current budget projections indicate that the board would not be required to craft spending reduction measures for several years, but many lawmakers are concerned about such powers possibly falling to one member of the administration who already wields considerable authority over the health system.

“In short, should the IPAB fail to submit a package of recommendations in a required submission year, the secretary is obligated by law to do so,” the Congressional Research Service wrote to Sen. Tom Coburn, MD (R, Okla.). “In either event, such legislation would be governed by the 'fast-track' procedures established by” the Affordable Care Act. Such fast-tracking ensures that the panel's spending reduction recommendations automatically become law unless Congress replaces them with comparable cuts or the Senate overrules the panel with a two-thirds majority vote.

Obama had requested congressional leaders from each party to submit nominees for the IPAB. In a May 9 letter to the president, House Speaker John Boehner (R, Ohio) and Senate Minority Leader Mitch McConnell (R, Ky.) refused.

“Because the law will give IPAB's 15 unelected, unaccountable individuals the ability to deny seniors access to innovative care, we respectfully decline to recommend appointments,” Boehner and McConnell stated.

Obama is required to consult with Congress when appointing members to the IPAB. Senate Majority Leader Harry Reid (D, Nev.) and House Minority Leader Nancy Pelosi (D, Calif.) have not submitted recommendations, either. Their offices did not respond to questions about potential IPAB nominees by this article's deadline.

The GOP leaders' reply led Dr. Coburn to ask Congressional Research Service officials about the secretary's role if the IPAB were to exist in name only. HHS Secretary Kathleen Sebelius would become an “IPAB-of-one,” Dr. Coburn's office said in a statement.

During a year when IPAB action is required, the fast-track legislation would be considered over a few months. The secretary would submit a proposal by Jan. 25 if the board failed to do so. Congressional committees would need to review and report out legislative language to implement the recommendations by April 1. Congress has the option to make changes by that deadline as long as it reduces spending within fiscal constraints.

Physicians have been critical of the IPAB provisions, and the American Medical Association and other organized medicine groups support efforts to repeal them. House legislation to eliminate the IPAB was introduced in January and has bipartisan support from 184 co-sponsors.

“We are pleased that bipartisan legislation has been introduced to repeal the IPAB,” AMA President Jeremy A. Lazarus, MD, said in a statement. “We must move away from these broken systems and focus on new payment and delivery models that give physicians the ability to improve patient care and reduce costs to stabilize Medicare for seniors now and in the future.”

Sebelius' actions under scrutiny

Congressional committees are investigating how Sebelius may be using her position to solicit funds from the health industry to implement parts of the Affordable Care Act. On May 10, The Washington Post first reported that Sebelius spoke with companies about supporting Enroll America, a nonprofit group with a mission to help Americans sign up for health plans once they gain coverage under the ACA starting in 2014.

Sebelius' actions “show an apparent disregard for constitutional principles and may violate the Antideficiency Act, the prohibition against augmenting congressional appropriations, and executive branch ethics laws,” wrote five Republicans calling for an audit of her conduct in a May 16 letter to the Government Accountability Office.

The Obama administration strongly denied any accusations of wrongdoing. Sebelius had spoken with the Robert Wood Johnson Foundation and H&R Block about Enroll America, said Joanne Peters, an HHS spokeswoman. She said neither organization is regulated by HHS.

“Her calls were in line with a special section of the Public Health Service Act, in place since 1976, that allows this and previous secretaries to support and to encourage others to support nonprofit organizations promoting health,” Peters said. “The secretary has made no fundraising requests to entities regulated by HHS.”

Other HHS secretaries have encouraged private industry to support, for example, Medicare Part D, the Children's Health Insurance Program, and the Children's Inn at the National Institutes of Health, Peters added.

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IPAB a long way from trigger

Cost-cutting action from the Medicare Independent Payment Advisory Board is not required when average per capita growth is below growth targets over five years. The latest projections from federal actuaries show that no recommendations for cuts are required in 2013 from IPAB or Health and Human Services Secretary Kathleen Sebelius. Actuaries compared the five-year average in Medicare per capita spending growth to the five-year average of the Consumer Price Index and the portion of the index that involves only medical care expenditures. If the Medicare figure is lower than the combined CPI figure, cost-cutting is not necessary.

Year Medicare growth CPI growth Medical CPI growth
2011 2.25% 3.14% 3.04%
2012 1.13% 2.09% 3.83%
2013 0.35% 2.12% 3.99%
2014 0.63% 2.20% 3.86%
2015 1.37% 2.20% 3.86%
Average 1.15% 3.03% (combines CPI and medical CPI growth)

Source: Office of the Actuary, Centers for Medicare & Medicaid Services, April 30 (link)

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