Goodbye, IPAB: Budget Act Shuts the Door on Unimplemented ACA Piece

Born as part of the Affordable Care Act (ACA) in 2010, the controversial Independent Payment Advisory Board (IPAB) was eliminated last week as part of the Bipartisan Budget Act of 2018 without ever having been implemented.

The IPAB sought to reign in Medicare spending if targets went over certain levels, but it had almost universal opposition from the healthcare and medical communities. And in the beginning of its 8-year lifetime, the IPAB was the subject of Republican claims that it would lead to Medicare “death panels.”

IPAB had called for CMS to calculate whether Medicare’s projected average growth rate in per capita spending falls below a specified target. If targets were exceeded, IPAB would make recommendations for mandatory cuts unless an alternate plan to achieve the same savings was approved by a three-fifths Congressional majority.

The board was supposed to have been made up of 15 health policy experts, but those experts were never appointed.

Last December, more than 650 organizations sent a joint letter to Congress asking for the board to be eliminated, saying that IPAB threatened healthcare access. The letter also pointed out that since the board was never staffed, the decisions on what to cut, if IPAB was implemented, would fall to the HHS secretary. That was too much power to place in 1 individual, as there was no process in place for a review of decisions, the letter said.

There were concerns that IPAB would make changes to the Medicare program that are typically within Congressional authority, such as modifications to the formulas used to establish payments for Medicare Advantage and Part D plans, provider payment rates, and prescription drugs. There was also concern that recommendations could indirectly affect beneficiaries, despite explicit limits on IPAB’s scope of authority with respect to benefits, premiums, cost sharing, and “rationing,” according to Kaiser Health News.

Kaiser reported that some features of the ACA explicitly prohibited this from ever happening: there was no rationing of healthcare, no raising of revenues, or increasing of Medicare beneficiary premiums or cost sharing, nor otherwise restricted benefits or modified eligibility criteria.

CMS had estimated in a report last year that Medicare spending growth will exceed the target growth rate for the first time in 2021, which would have triggered IPAB’s mechanisms to control spending.