Board at center of ACA is stuck in political ‘purgatory’

The Independent Payment Advisory Board (IPAB) has been a lightning rod for discussion since its inclusion in the Affordable Care Act (ACA). But while supporters viewed it as a centerpiece of reform, and detractors called it rationing, IPAB may never get a chance to impact healthcare at all, according to an article published May 29 in the New England Journal of Medicine.

“If low Medicare spending growth persists in the near term, then the most controversial feature of the IPAB — congressional consideration of IPAB proposals under expedited procedures — will not come into play,” wrote Jonathan Oberlander, PhD, and Marisa Morrison, both of the University of North Carolina, Chapel Hill.

IPAB was intended as a fail-safe that would moderate growth in Medicare spending, explained Oberlander and Morrison. In theory, should spending growth reach a certain level, the 15-member, nonelected board would make recommendations to reform Medicare, and those changes would have to be implemented unless Congress proposed its own policies containing the same savings. IPAB’s recommendations were protected by limits on legislative debate and the requirement of a supermajority to override these procedures. Under the ACA, the board itself can’t be eliminated until 2017, and that also would require a supermajority.

These protections were hailed as a way of insulating the board from political pressures to allow it to create policy, according to Oberlander and Morrison. Republican politicians, however, saw IPAB as way to ration care—the “legacy of mythic ‘death panels,’” wrote the authors—and legislation was introduced to repeal the board. Some healthcare industry groups opposed IPAB saying medical providers would be the focus of proposals through reduced Medicare payments since recommendations were barred from raising revenues or restricting benefits.

But for all the hand-wringing, Medicare spending growth is not projected to reach the threshold levels that would trigger IPAB proposals, according to Oberlander and Morrison. The target growth rate set by the ACA is the average of overall inflation and medical inflation, which is currently around 3 percent. According to an April 30 report from the Centers for Medicare and Medicaid Services, per-person Medicare spending is expected to grow at an average rate of only 1.15 percent between 2011 and 2015, well below the target level.

“In other words, because Medicare spending growth has moderated, the IPAB will not be as important as either its supporters or its detractors have claimed,” wrote the authors. “It's much more likely to be irrelevant than to become the centerpiece of cost containment.”

Even if action would be required of IPAB, it faces another problem—it currently has no members. Oberlander and Morrison explained that the members of the board are to be nominated by the President, with six chosen in consultation with Democrats in Congress and six chosen in consultation with Republican in Congress. Republican congressional leaders have refused to recommend appointees, and any nominees must still be confirmed by the Senate, which would likely lead to filibuster in a contentious political environment.

“These dynamics are unlikely to recede soon, which means that the IPAB is stuck in purgatory, neither operational nor canceled — an institution designed to be above politics that cannot escape the political binds holding it back,” wrote Oberlander and Morrison.

“Regardless of the IPAB's future, one thing is clear: rather than removing politics from Medicare, the board's difficult early journey has underscored just how entrenched politics are in health care policy.”

For an update on Medicare spending projections click here.