Policy & Regulation News

Independent Payment Advisory Board Threatens Medicare Costs

By Jacqueline DiChiara

- There are new Medicare cost concerns within the healthcare industry. Hundreds of healthcare organizations are actively voicing concerns to Congress about financial threats to private sector consumers and a possible watering down of industry-wide power.

Independent Payment Advisory Board

The American Podiatric Medical Association (APMA) signed a May 4 letter to Congress requesting lawmakers repeal the Independent Payment Advisory Board (IPAB) provision of the Patient Protection and Affordable Care Act (PPACA). APMA unites in signing this letter with over 500 national and state-based healthcare organizations, including physician groups and state hospital associations.

The reason for the repeal is an overarching concern IPAB weakens Medicare beneficiaries’ access to care and eliminates public accountability from the Medicare decision-making process, according to a recently released APMA statement. APMA expresses additional concern regarding a possible shift of power away from its executive branch appointees to Sylvia M. Burwell, Secretary of the Department of Health and Human Services (HHS). A lack of administrative or judicial review following a recommendation from Burwell to implement IPAB recommendations is problematic, APMA adds. 

The letter in brief

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  • Four specfic primary concerns are defined within the over 500 organizations’ letter to Congress. First, since IPAB is an unelected board, it lacks management and responsibility. It would therefore be implementing actions traditionally completed by the House and Senate, the organizations maintain. “Once the Secretary of Health and Human Services (HHS) implements an IPAB recommendation, that action is not subject to administrative or judicial review,” confirms the letter. “As constructed, IPAB is granted unprecedented powers – even the ability to change laws previously enacted by Congress – with virtually no oversight.”

    Second, IPAB should cut payments to healthcare providers instead of focusing on long term reforms to reach its one-year savings goals, claim the organizations. “IPAB proponents suggest that the board will be an asset in developing needed healthcare delivery reforms,” the letter states. “That goal, however, is not realistically achievable.” The IPAB must reach "scoreable savings within a one-year time period" or payment cuts for healthcare providers will be implemented as an unsound short-term financial resolution, the letter continues.

    The third point within the letter maintains that low reimbursement rates mean physicians are struggling to accept new Medicare patients. “IPAB-generated payment reductions would only increase the access difficulties faced by too many Medicare beneficiaries,” confirms the letter. “Furthermore, payment reductions to Medicare providers will almost certainly result in a shifting of health costs to employers and consumers in the private sector.”

    The fourth and final point made is that within the private sector, there will likely be a transference of health costs to employers and consumers due to payment reductions to Medicare providers. “This is an unacceptable decisionmaking process for a program that millions of our nation’s seniors and individuals with disabilities rely upon,” the letter maintains.

    The organizations actively urge Congress to eliminate the IPAB provision. “We strongly support bringing greater cost-efficiency to the Medicare program. We also advocate continuing efforts to improve the quality of care delivered to Medicare beneficiaries,” the letter concludes. “The Independent Payment Advisory Board will achieve neither of these objectives and will only weaken, not strengthen, a program critical to the health and well-being of current and future beneficiaries.”