Healthcare groups urge Congressional subcommittee to curb IPAB

July 18, 2011

Potential Medicare budget cuts made through a new board are likely to significantly reduce healthcare access for beneficiaries, according to testimony presented to the U.S. House Energy and Commerce health subcommittee.

Potential Medicare budget cuts made through a new board are likely to significantly reduce healthcare access for beneficiaries, according to testimony presented to the U.S. House Energy and Commerce health subcommittee.

The Healthcare Leadership Council, which includes the Pharmaceutical Research and Manufacturers of America (PhRMA) and numerous other healthcare-related groups, recently testified that the Independent Payment Advisory Board (IPAB) structure is likely to lead to payment cuts to healthcare providers. “The combination of payment cuts, along with the projected shortage of physicians the nation will experience over the next several years … will create a healthcare access ‘perfect storm’ that will hit seniors the hardest,” said HLC President Mary Grealy.

The IPAB must be repealed by Congress and not simply be “fixed,” Grealy said. “Because the IPAB recommendations can take effect without an affirmative vote from Congress, it will become the de facto decision-maker for future Medicare policies. It is a mistake to invest such power in an unelected board that needs to be responsive to the public,” Grealy said.

Healthcare groups are also concerned about the rigidity of the IPAB mandate, which automatically triggers spending reductions when spending exceeds arbitrary levels. “It does not take into consideration public health demands which may necessitate greater, not reduced, Medicare spending. It also does not recognize that new innovations in medical practice and pharmaceutical development - which may involve high up-front cuts and thus be a prime IPAB target - can actually reduce healthcare costs in the long run,” Grealy said.

Grealy told Congressional representatives that there are “better, more patient-centered” ways to curb Medicare spending. Those include solutions from the private sector and from the Centers for Medicare and Medicaid Services (CMS), which has implemented programs such as PACE (The Program of All-Inclusive Care for the Elderly), value-based purchasing, and bundling of payments.