Contrary to the title, the IPAB is not a new Apple product. Rather, it is the “Independent Payment Advisory Board” created by the Affordable Care Act to solve the problem of ever-increasing Medicare spending. In people’s worst nightmares, the IPAB is a death panel that will make decisions about how to ration health care for the elderly and disabled. Images of 15 people sitting in a room handing out death sentences flash through the minds of the anti-government crowd. Of course, nothing could be further from the truth, as the IPAB has no authority to limit benefits, increase beneficiaries’ out-of-pocket costs, or otherwise alter the Medicare program in any way that would “ration” care.
So, what can the IPAB actually do to promote slower spending growth in Medicare? They can suggest legislation, that’s what. Legislation that, for example, would reduce or alter the way in which payments are made to providers. It’s debatable if the recommendations from IPAB will work to actually control spending. What’s not up for debate is whether action will be taken, and that’s what I’m most pleased about.
You see, I hear often from family and friends about how Congress “never does anything” and how we should “vote the whole sorry bunch out and start from scratch.” It doesn’t seem to matter which party is in power, either. Congressional disapproval knows no party affiliations. And this isn’t just a trend among my social circle. Americans generally disapprove of the job Congress is doing. The IPAB puts an end to that, and here’s how:
Starting in 2013, the chief actuary of the Centers for Medicare and Medicaid Services (CMS) will report both a projected and a target Medicare growth rate for the next five years. If the projected growth rate exceeds the target growth rate, IPAB is tasked with making recommendations to bring things in line. These recommendations are formally submitted to Congress as proposed legislation. In the past, this is where progress ceased to occur, but no longer.
With the ball in Congress’ court, the options are straightforward. Congress may either enact the legislation recommended by IPAB, introduce and enact its own legislation that achieves the same cost savings as the recommendations from IPAB, or fail to act. If Congress fails to act, however, the secretary of the Department of Health and Human Services must implement IPAB’s recommendations, which cannot be overruled by either the executive or the judicial branches. In short, when Medicare spending increases too rapidly, something will be done to address it, even if Congress fails to act.