Thursday, May 19, 2011

"Upgrading" the Independent Payment Advisory Board As a Way to Control Costs?

In yesterday's post about "risk transfer" as Medicare savings "in drag," the Disease Management Care Blog mentioned and linked a largely favorable New England Journal summary article about the Independent Payment Advisory Board (IPAB).  Describing it as a very complicated part of the Affordable Care Act (ACA), author Henry Aaron notes the 18 member IPAB will be seated in 2013 and start issuing recommendations to Congress on ways to reduce health care costs for 2015.  By law, none of the IPAB recommendations  can result in any “rationing,” changes in premiums, increased cost sharing, benefit limitations, physician fee schedule adjustments or alterations in Medicare's eligibility standards.  While there are other services that can get "whacked" (for example, dialysis centers, Medicare Advantage and the Part D prescription program), it looks like the IAPB - for now - will be relying on data from comparative-effectiveness studies, approaches to bundled payments, value-based insurance designs, health insurance exchange-based competition and ACOs for most of its recommendations.

Yet, asks the DMCB, suppose Medicare's costs continue to rise despite vague promises about risk pools, innovation and quality while there are dozens of inconclusive demos and pilots?  What if providers find comparative effectiveness rules, bundled payment arragnements, insurance designs and ACOs burdensome and figure out how to circumvent them?  What happens if the electronic health record craters, like it did across the pond

The DMCB thinks it's remotely possible that a frustrated Congress and a President could choose to further "upgrade" the IAPB so that the 18 member board does have the power to change payment rates or other aspects of the Medicare program.  While unlikely, the alternative - having to vote to increase taxes or cut benefits - is also difficult to imagine.

Hmph, you say?  Check out this quote from the U.S. House of Representatives Ways and Means Committee Chairman Camp's letter to the President:

"President Obama discussed giving more power to the IPAB, but didn't share specific details regarding how it would reduce Medicare Costs.  The Chairman's letter asked "What specifically do you mean by 'giving the IPAB additional tools to improve the quality of care reducing costs, including allowing it to promote value based benefit designs?  Would this require a statutory change, given that the IPAB is not currently allowed to consider changes to the Medicare benefit package?"

Based on the scenario above, the DMCB thinks it knows the answer.

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