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PhRMA Takes Aim at IPAB, a Longtime Target


Lawmakers from both parties have expressed their dislike for an entity that could take away their spending authority. But a leading Democrat also raised the fact that the new HHS Secretary, Tom Price, MD, would be harsh on the most vulnerable.

In a blog post Monday, Pharmaceutical Research and Manufacturers of America (PhRMA), took aim at a longtime target: the Independent Payment Advisory Board (IPAB), which was created under the Affordable Care Act (ACA) to rein in spending without reducing quality.

To be sure, IPAB attracts daggers from across the political spectrum—both Senators John Corwyn, R-Texas, and Ron Wyden, D-Oregon, have it in their crosshairs, even though the mechanics of IPAB are such that it has never been activated. But the idea of an executive agency taking away spending power has long rankled the GOP, which Roll Call reported cut funding from the group by $55 million over 4 years.

Under the ACA, the use of IPAB to make Medicare cuts only kicks in if spending rises by a certain target and if Congress fails to act on its recommendations.

PhRMA’s Nicole Longo wrote that the growth target could be met in 2017, which would set IPAB’s process in motion. It’s supposed to consist of 15 experts appointed by the president. But, as Longo wrote, “If no board is appointed, these powers transfer automatically to the Secretary of Health and Human Services,” an office just assumed by Tom Price, MD, an orthopedic surgeon who spent years as a Georgia Congressman fighting the ACA. Instead of checks and balances, Longo wrote the IPAB “is structured to be virtually exempt from such oversight.”

The blog post, and a letter PhRMA released signed by 650 healthcare group, argues that IPAB’s design gives it too much power, and it would be worst still if the power to make cuts fell to the HHS Secretary. “This places an enormous degree of power in the hands of one unelected individual,” the letter stated.

The American Medical Association says on its website it opposes IPAB for similar reasons.

Wyden’s recent statement against IPAB has a twist, however. He writes that Price and others appointed by President Donald Trump “have long records of supporting policies that would shift costs to seniors and other vulnerable Americans.”

Concern about IPAB grew after last year’s report from Medicare’s trustees said that while growth for 2016 had not exceeded targets in the ACA, that might not be the case in 2017. An outline published by the Kaiser Family Foundation projected that if the HHS actuary announces that targets are reached this April, recommendations would be due by September 1, 2017. Congressional committees would have until April 2018 to act. If they do nothing, the HHS secretary could move ahead with cuts by October 1, 2018, to take effect January 1, 2019.

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