The Independent Payment Advisory Board, or IPAB, is a fifteen-member
United States Government agency created in 2010 by sections 3403 and
10320 of the Patient Protection and Affordable Care Act which has the
explicit task of achieving specified savings in Medicare without
affecting coverage or quality. Under previous and current law, changes
to Medicare payment rates and program rules are recommended by MedPAC
but require an act of Congress to take effect. The new system grants
IPAB the authority to make changes to the Medicare program with the
Congress being given the power to overrule the agency's decisions.
Beginning in 2013, the Chief Actuary of the Centers for Medicare and
Medicaid Services will determine in particular years the projected per
capita growth rate for Medicare for a multi-year period ending in the
second year thereafter (the "implementation year"). If the projection
exceeds a target growth rate, IPAB must develop a proposal to reduce
Medicare spending in the implementation year by a specified amount. If
it is required to develop a proposal, the Board must submit that
proposal in January of the year before the implementation year; thus,
the first proposal could be submitted in January 2014 to take effect in
2015. If the Board fails to submit a proposal that the Chief Actuary
certifies will achieve the savings target, the Secretary of Health and
Human Services must submit a proposal that will achieve that amount of
savings. The Secretary must then implement the proposal unless Congress
enacts resolutions made to override the Board's (or the Secretary's)
decisions under a fast-track procedure that the law sets forth.
IPAB
was created as a strengthened version of the Medicare Payment Advisory
Commission (MedPAC), a body with no regulatory power that solely advises
Congress, but can not enact regulations in and of itself. Since 1997,
MedPAC had recommended cuts totaling "hundreds of billions of dollars"
to Medicare that were ignored by Congress. Also, Congress has pressured
Medicare administrators to cover "ineffective or needlessly costly
methods of care", while Medicare's founding legislation says "Nothing in
this title shall be construed to authorize any Federal officer or
employee to exercise any supervision or control over the practice of
medicine". Henry J. Aaron, a health care expert at the Brookings
Institution, says that many observers see that some in Congress are "in
thrall to campaign contributors and producers and suppliers of medical
services" and most are not well enough informed to wisely use Medicare's
buying power to reform health care. The idea behind the IPAB was to take
power away from Congress (and special interests) in order to give it to
those knowledgeable in health care policy.
