Bipartisan vote moves forward a bill repealing Obamacare’s Medicare cost-cutting body.
The House Subcommittee on Health voted on Wednesday to move forward with a bill that would repeal the Independent Payment Advisory Board (IPAB), a Medicare cost-cutting entity that has been derided by some Republicans as a “death panel.”
The bill’s sponsor, Rep. Phil Roe, M.D. (R-Tenn.), said that he feared IPAB would harm patient care as it doesn’t “have a mandate to improve patient care, but simply to meet a budget.” The American Medical Association (AMA) has voiced support for repealing IPAB. Although IPAB is not required to cut physician pay, the AMA has argued that IPAB could subject physicians to “double jeopardy” of expenditure reduction targets and potential payment reductions through the Medicare Physician Payment Formula.
Although two Democrats joined the Republican majority in the subcommittee vote, the bill is not expected to receive wide bipartisan support. In anticipation of the vote, the Obama administration issued a statement defending IPAB by contrasting it with a GOP-proposed Medicare reform plan, which the administration claims does nothing to reduce overall healthcare costs.
Penn Law’s Professor Theodore Ruger noted that the legislation was unlikely to pass in the Senate and that repealing IPAB would “undercut an important tool” in the Patient Protection and Affordable Care Act’s cost saving provisions.
The IPAB, established by the Affordable Care Act and scheduled to start operating in 2014, will have the authority to make cost-cutting recommendations in any year the Medicare Actuary projects the per capita costs growth rate will exceed predetermined growth targets. The recommendations would go into effect automatically unless blocked by an alternative Congressional proposal within a designated time period.
IPAB recommendations are subject to certain limitations. They may not ration health care, raise revenues or Medicare beneficiary premiums, increase Medicare beneficiary cost-sharing, or otherwise restrict benefits or modify eligibility criteria. Proposals are subject to certification by the Medicare Actuary that the proposal will not increase net Medicare spending and must be submitted to the Medicare Payment Advisory Commission and the Department of Health and Human Services Secretary for comment and review.
Medicare reform has garnered significant attention from policy-makers in recent days. Earlier in February, two Republican Senators announced their plan to introduce a Medicare reform bill. The plan seeks to reduce Medicare spending by between $300 billion and $1 trillion in the next decade by increasing eligibility age to 67 for people born after 1959 and increasing the cap on premiums higher-income seniors pay. The House Ways and Means Committee has announced a hearing for March 6 that will examine IPAB’s impact on the Medicare program.
The IPAB was also the subject of a similar Senate bill in 2010, and another bill in 2011, both of which sought to amend the Affordable Care Act and eliminate the IPAB. Both bills have been referred to the Committee on Finance. Senator John Cornyn (R-TX) introduced a new bill seeking the repeal of IPAB on February 16, and it has been placed on the Senate’s legislative calendar.
In addition to the legislative efforts to repeal authority for the IPAB, the Board’s authority is being challenged by a 2010 lawsuit in an Arizona federal district court brought by the Goldwater Institute in which House GOP Reps. Jeff Flake and Trent Franks and former Rep. John Shadegg joined as plaintiffs.
