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What is the Independent Payment Advisory Board?

Within the 1,200 pages of the Affordable Health Care Act passed in March, 2010 is a provision to establish an Independent Payment Advisory Board (IPAB). This Board is mandated to reduce provider payment rates to meet Medicare spending targets, preserve the program's solvency, and recommend other policy changes to reduce health spending growth.

IPAB and Controversy

IPAB is arguably one of the most controversial provisions in the recently enacted Health Care Reform legislation. The Board is independent of Congress and the Department of Health and Human Services, and opponents fear it could be used as a mechanism to control Medicare and, with it potentially all health care expenditures. In fact, some seniors are concerned that the IPAB allows 15 bureaucrats to make substantial changes to Medicare without full transparency and accountability to America's senior citizens and their elected officials. This new, independent and unelected body of individuals has the potential to have unprecedented power to set payment rates and make other Medicare policy decisions.

IPAB Powers

Specifically, beginning in January, 2015, if there is any year that Medicare statistics project an increase in per person Medicare expenditures that exceed a specific target, then the IPAB is to develop a detailed proposal to scale back Medicare expenditures for that year. 

MedPAC vs. IPAB

Currently, the role of advisors is held by the Medicare Payment Advisory Commission (MedPAC), an independent Congressional agency tasked to advise Congress on issues affecting the Medicare program. In addition to advising Congress on payments to private health plans participating in Medicare and providers in traditional Medicare programs, MedPAC is also tasked with analyzing access to care, quality of care and other issues affecting Medicare.

The Affordable Care Act's IPAB will not immediately replace MedPAC, as IPAB starts staffing up in late 2011, but there will be overlapping functions leaving many wondering if the two bodies will compete, cooperate or merge.

The Bottom Line

So why bother to create the IPAB when MedPAC is already in place? MedPAC recommendations can be ignored and the Commission has little to no authority, but IPAB's recommendations will become law unless the House and the Senate each adopt, by a 3/5 majority, a resolution to block them.

Senior Citizens should keep a close eye on this advisory panel that could legislate their health care benefits.