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May 17, 2011

Q & A: The Independent Payment Advisory Board

Q.  What is the Independent Payment Advisory Board?

 

A.  The Independent Payment Advisory Board for Medicare was created by the health care overhaul enacted last year.  The board is scheduled to be established in 2015.  If Congress doesn’t act to repeal or change it, this board would be a 15-member team of unelected advisors that would make binding recommendations on how to reduce Medicare spending when spending is projected to exceed a certain level.  In addition to making recommendations on reducing Medicare spending, the board would create annual reports on health care costs, access, use and quality. 

 

As it stands today, under the law, the board’s recommendations must be sent every January to Congress.  Congress would be able to waive the proposed cuts only with three-fifths of the Senate voting to do so.  Otherwise, Congress, in effect, would approve the recommended cuts.  If Congress rejects the cuts, then it would be required to come up with its own spending cuts equal to the amount of the board’s proposed cuts.  If Congress subsequently would fail to act by August 15, the Secretary of Health and Human Services would automatically implement the board’s proposed cuts. 

 

Q.  Who serves on the board?

 

A.  Under the 2010 health care law, board members are nominated by the President and must be approved by the Senate.  Board members would serve for six years.  The law requires the President to get suggestions from Congressional leaders of both parties for 12 of the 15 board members.  The President can nominate whoever he wants for the remaining three positions without outside input.  President Obama has said that he plans to nominate “doctors, nurses, medical experts and consumers” to the board.

 

Q.  Are there any limitations on the board? 

 

A.  The law says the board cannot make decisions that directly relate to the premiums, deductibles or copayments that Medicare beneficiaries pay.  It says the board can’t change the eligibility criteria for Medicare benefits.  Nevertheless, the board has tremendous power, even in these areas, because it can recommend the level of Medicare payments for doctors and other medical providers.  As we know in rural America, these payment rates impact access to Medicare providers.  When payments are too low, Medicare beneficiaries have fewer choices and sometimes no access at all to health care providers.  As a practical matter, the board’s power over payment rates may have the same effect on Medicare beneficiaries, and it may be even more dramatic, than if the board was able to call for changes to the premiums paid by beneficiaries, when it comes to patient access to care.

 

Q.  Why do you oppose the board?

 

A.  I’m a cosponsor of legislation to repeal the Independent Payment Advisory Board for a few reasons.  The current law gives an unelected group of 15 people authority that should be held by Congress, where the people have a voice through their elected representatives.  Board member terms alone are three times longer than terms of office for members of the House of Representatives, who are held accountable every two years when they must stand before voters.  The threshold required for Congress to override board recommendations is very high, even before considering the two-thirds vote required to override a presidential veto.  It’s also not accurate to say, as proponents do, that board recommendations cannot touch Medicare beneficiaries.  To meet its mandate the board must reduce payments to providers.  If there aren’t enough providers to serve patients, effectively, it will result in rationing of Medicare.  Today, home health agencies and doctors are strongly opposed to the board because they know it ultimately would make it impossible for them to participate in Medicare.  The health care law was enacted last year, and already this year, the President has proposed increasing the level of Medicare savings to be derived from this board.  It’s impossible to do that and also continue to serve Medicare beneficiaries.