ACA Payment Review Board Gets Failing Grade

For years, physicians have complained that their reimbursement was determined in large part by unaccountable Medicare bureaucrats who were more interested in controlling spending than in providing quality patient care. Now, with the passage last year of the Affordable Care Act (ACA), that lament is truer than ever.

Tucked away inside the 2,000-plus pages of the ACA is a provision calling for the creation of the Independent Payment Advisory Board (IPAB), a panel of 15 unelected bureaucrats tasked with reducing the rate of growth in Medicare without affecting coverage or quality. Beginning in 2015, the IPAB must submit proposals to reduce costs when Medicare spending exceeds a targeted level. Physicians should be in favor of this, right? After all, Medicare spending growth is a budget-busting drag on the economy that needs to be reined in.

The problem is that the IPAB will most assuredly seek to “fix” Medicare on the backs of the physicians who deliver the care. By law, the IPAB is specifically prohibited from proposing to ration care, raise revenues or Medicare premiums, increase Medicare beneficiary cost sharing, restrict benefits, or modify eligibility criteria. Thus, the only method open to the IPAB for reducing the growth of Medicare is to propose reductions to reimbursement rates.

James C. Capretta, former associate director at the White House Office of Management and Budget, addressed this issue last year in a column he wrote for Kaiser Health News. In order to “hit its budgetary targets, the IPAB is strictly limited in what it can recommend and implement. It can’t change cost-sharing for covered Medicare services. Indeed, it can’t change the nature of the Medicare entitlement at all, or any aspect of the beneficiary’s relationship to the program. The only thing it can do is cut Medicare payment rates for those providing services to the beneficiaries,” Capretta wrote.

“This wasn’t an accident. It reflects the cost-control vision of those who wrote the bill. They believe the way to cut healthcare costs is with stronger federal payment controls. They envision the IPAB coming up with new payment models which will push hospitals and physicians to emulate today’s most efficient delivery models. Call it ‘government-driven managed care,’ ” he added.

Of course, more and deeper cuts to physician reimbursement cannot on their own lead to long-term solutions to out-of-control Medicare cost growth. The supporters of this approach know this (they have been told so by both the Congressional Budget Office and the chief actuary of the Medicare program), but abandoning this reckless approach in favor of more consumer-driven reforms would mean less government interference and control in the health care marketplace, which is anathema to the president and other supporters of the ACA.

When the answer to government-created problems in healthcare is not to reduce the size and scope of government intervention, but rather to further bureaucratize the system, the IPAB is the kind of solution you get. It is an unaccountable board “whose sole job is to make care decisions on the basis of a budget … it does not have a mandate to improve patient care -- it has a mandate to meet a budget, and that harms patient care,” according to Tennessee Congressman Phil Roe, MD. Roe is the sponsor of HR 452 (the Medicare Decisions Accountability Act of 2011), a bill that would strip the IPAB provision from the ACA.

Roe has been joined in his calls for repeal of the IPAB by more than 75 medical societies and organizations, including the Cardiology Advocacy Alliance, which opposes the IPAB because it “minimizes the role of Congress, creates a payment authority that has tremendous power but is not accountable to anyone but the President (who appoints IPAB members), and most likely will result in significant Medicare payment cuts based on ivory tower analyses that do not take into account real-world situations.”

At a time when physicians everywhere are already facing the twin pressures of rising business costs and declining reimbursement, the last thing they need is another government “solution” that requires them to give up more pay to fix a mess they didn’t create. This particular board review definitely gets a failing grade.

Thank you for reading.

Mike Hennessy