HHS says heav­ily crit­i­cized IPAB may not meet this decade

If spend­ing trend con­tin­ues, pay­ment board may not meet in this decade

Modern Healthcare - - NEWS - Jes­sica Zig­mond

Op­po­nents of the health­care re­form law’s In­de­pen­dent Pay­ment Ad­vi­sory Board warn that its uni­lat­eral de­ci­sions could be dis­as­trous for the in­dus­try and Medi­care pa­tients. But if Medi­care spend­ing keeps go­ing the way it has the past few years, the board will never hold a meet­ing.

Un­pop­u­lar in Congress and the health­care in­dus­try, IPAB was cre­ated as a back­stop mea­sure if Medi­care spend­ing per ben­e­fi­ciary grows at a rate of gross domestic prod­uct per capita plus 1%. The board’s rec­om­mended cuts would be­come law un­less Congress acts to achieve the same level of sav­ings through other means.

A year ago, Pres­i­dent Barack Obama’s an­nual bud­get sug­gested chang­ing that level to GDP per capita plus 0.5%, a pro­vi­sion that has not been adopted. Mean­while, Congress has hosted a se­ries of hear­ings on IPAB (July 18, 2011, p. 6), and the House of Rep­re­sen­ta­tives voted to re­peal it last year.

Shortly af­ter Obama won re-elec­tion and Repub­li­can lead­ers largely re­signed them­selves to the Pa­tient Pro­tec­tion and Af­ford­able Care Act stay­ing on the books, House Ma­jor­ity Leader Eric Can­tor (R-Va.) sug­gested in a let­ter to House GOP mem­bers that an IPABre­peal mea­sure could resur­face in 2013.

New num­bers from HHS sug­gest there’s not much to fear about the still-un­named panel of pol­icy ex­perts. On the same day last week that the CMS re­leased its an­nual health­care spend­ing statis­tics, a sep­a­rate anal­y­sis from HHS’ Of­fice of the As­sis­tant Sec­re­tary for Plan­ning and Eval­u­a­tion used the CMS num­bers to com­pare an­nual in­creases in Medi­care spend­ing-per-ben­e­fi­ciary with GDP per capita—the very mea­sure­ment used to de­ter­mine whether IPAB would need to step in and make rec­om­men­da­tions to slow the rate of growth.

The find­ings showed Medi­care spend­ing­per-ben­e­fi­ciary rose at a rate of 3.6% in 2011 (up from 1.8% in 2010), while GDP per capita rose at a rate of 3.2%. Us­ing ad­justed fig­ures from the CMS Of­fice of the Ac­tu­ary for spend­ing growth in 2012, the ASPE’s anal­y­sis showed an even lower Medi­care-per-ben­e­fi­ciary growth rate for that year: 0.4% com­pared with a GDP per-capita rate of 3.4% in 2012. Both sets of fig­ures fall well within the tar­get out­lined in the law.

“CBO (Con­gres­sional Bud­get Of­fice) said very clearly that the IPAB would not be called into play in any year in the next 10 years,” said Paul Van de Water, a se­nior fel­low at the Cen­ter for Bud­get and Pol­icy Pri­or­i­ties in Washington. “That’s un­cer­tain and spec­u­la­tive, but again th­ese new num­bers from CMS don’t ar­gue to the con­trary,” he con­tin­ued. “They do sug­gest that health­care spend­ing growth con­tin­ues to be rel­a­tively sub­dued.”

Van de Water said he doesn’t ex­pect any changes for IPAB in the near fu­ture, but that the new num­bers pro­vide an op­por­tu­nity to ques­tion what the fu­ture holds for the panel. “There re­mains the con­cern that Congress may not al­ways be will­ing to take the ad­di­tional steps that need to be taken to con­trol cost, so the no­tion was IPAB was this process if Congress couldn’t agree on bet­ter things,” he said. “That’s also a use­ful ap­proach to have in re­serve.”

But Dou­glas Holtz-Eakin, former di­rec­tor of the non­par­ti­san CBO, said IPAB could sti­fle in­no­va­tion and op­er­a­tions in health­care. For ex­am­ple, he sug­gested, in­no­va­tors who de­velop bi­o­log­ics, de­vices or ther­a­pies—all of which re­quire up­front costs—might hold back un­der con­cerns that IPAB would “ran­domly de­cide” not to re­im­burse ex­pen­sive de­vices that aren’t used by many pa­tients.

IPAB is a prob­lem be­cause it re­lies on provider cuts as a tool to con­trol costs, HoltzEakin said. “It’s a really bad set of pol­icy in the way it’s con­structed,” he said. “If it’s used, it’s bad news.”

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.