RWJF-Health Affairs Policy Brief: Independent Payment Advisory Board

This Robert Wood Johnson Foundation-Health Affairs policy brief describes the responsibilities of the Independent Payment Advisory Board (IPAB) established by the Patient Protection and Affordable Care Act.   This new board will have more authority than the current Medicare Payment Advisory Commission (MedPAC), whose recommendations for cost savings and other improvements in the Medicare program were often ignored.

While this new IPAB may not recommend any changes in Medicare program eligibility, rationing of care, restricting benefits, raising revenues, or increasing beneficiary premiums or cost-sharing, it will be able to make any other recommendations to achieve annual targeted savings, improve beneficiary access to care, improve the health delivery system, and improve health outcomes.  If Congress does not act on the IPAB’s specific annual  recommendations (or enact other legislation that achieves similar savings) within certain timelines, the Secretary of the Department of Health and Human Services is required to implement the IPAB’s recommendations and such actions are not reviewable or reversible by either the President or the courts.

Given the broad authority granted to the IPAB, there has been significant opposition to its establishment, primarily from those concerned about delegating such broad policy authority to an unelected body, and from health care providers who are anxious that the primary way program savings can be achieved would be reductions in Medicare reimbursement rates to providers.  There have been several bills introduced to abolish the IPAB and two House of Representatives committee hearings about eliminating it.   On the other hand, President Obama has proposed expanding the authority of the IPAB even further, with a mandate to achieve even greater savings and adding authority to recommend value-based benefit designs and even greater enforcement of its recommendations.

The IPAB is not scheduled to begin its work until 2013 so it is unclear whether presidential appointments naming the fifteen board members will be made prior to the November 2012 elections.

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