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Rationing Care or Controlling Costs? Medicare Board Takes Heat on the Hill

Health and Human Services Secretary Kathleen Sebelius spent two days on Capitol Hill this week, defending a board that some charge will ration Medicare. Photo by Alex Wong, Getty Images.

Echoes of the once-familiar drumbeat to “repeal and replace” the health care reform law returned to Capitol Hill this week as GOP lawmakers focused on bringing down one of the law’s key pillars. The Independent Payment Advisory Board (IPAB) drew the ire of lawmakers from both sides of the aisle as the panel and its ability to sidestep Congress to implement Medicare cuts became the focus of two congressional committee hearings.

Called everything from a “pernicious” ration board to realistic price control, the independent committee will recommend cuts to the ballooning Medicare system that would automatically take effect when Congress fails to implement cost-saving measures of its own.

While the Obama administration sees the board as a vital way to bring down prices in the health care industry, Health and Human Services Secretary Kathleen Sebelius defended the board Tuesday by downplaying its importance.

“IPAB is a backstop, a failsafe, to make sure Medicare is solvent for years to come,” she said at the hearing before the House Budget Committee. “It’s up to Congress whether to accept the recommendations (of IPAB) or to come up with recommendations of their own.”

Here’s an excerpt of her testimony on Tuesday:

Since health care reform became law last year, the IPAB has been dogged by rumors that it will contain Medicare costs by rationing care for seniors and deciding when to dispense life-saving treatment — essentially acting as “death panel,” according to some conservative critics. A year and a half later, it remains a pivotal part of the law — and will remain so unless repeal attempts succeed.

Made up of doctors, health care professionals, employers, economists and consumer representatives – IPAB will start making recommendations in 2015 only if Medicare costs rise too quickly based upon a rate specified by the health reform law.

If Congressional leaders don’t like the recommendations, they can either veto them with a supermajority in the Senate or propose an alternative for cutting the same amount from the entitlement program.

The real controversy comes if Congress decides to do no neither, in which case the panel’s recommendations would bypass elected officials entirely and automatically take effect. Unlike Medpac — an independent congressional agency that currently offers elected officials Medicare advice they can accept or deny at will — IPAB will have teeth.

That’s exactly what appeals to Judy Feder, a senior fellow at the Urban Institute and a former dean of the Georgetown Public Policy Institute.

“This is a backup to make sure the commitments of the Affordable Care Act are actually realized,” she told the NewsHour. “It mobilizes experts to keep an eye on things, to weigh what works against what doesn’t and to make sure the system moves forward in the right direction.”

Asked during Wednesday’s Energy and Commerce Committee hearing if she would serve on the panel, Feder said she hasn’t been “asked” but the prospect has come up in her talks with administration officials. “I indicated I would be proud to serve on the IPAB,” she told the committee.

In the end, IPAB’s 15 board members will be appointed by the president and confirmed by the Senate with both parties having an opportunity to weigh in on 12 of the nominees and the president receiving blanket authority to select the remaining three.

That setup “literally gives a bunch of bureaucrats a stranglehold on Medicare and in particular on reimbursement to providers,” said Rep. Phil Gingrey, R-Ga., one of the most outspoken IPAB critics and a member of the Energy and Commerce Committee. “IPAB has the ability to not only advise and recommend but to literally force Congress to make cuts based on Medicare expenditure from proceeding year.”

Because the health care law prohibits the board from rationing care, restricting benefits, or changing eligibility criteria, IPAB will be left with few options for its cost-cutting recommendations except such payment cuts.

Budget Committee Chairman Paul Ryan said at Tuesday’s hearing those payments could plummet by two-thirds in coming years. And if that happens, treating Medicare beneficiaries wouldn’t “make good business sense,” and many doctors would withdraw from the program, he said.

“When you pay less for something, you get less for it. This legislation assumes deep cuts and that absolutely is going to have an impact on patient care and patient access to care,” he said.

While questioning Sebelius at Tuesday’s Budget hearing, Ryan framed his argument that the board will “ration” care through payment cuts to doctors, hospitals and other health care providers:

Under Ryan’s controversial plan for Medicare, the government-run health plan for senior citizens would be replaced by stipends they would use to purchase private insurance.

The recent surge of Republican IPAB criticism can be tied to that idea. When Democrats and liberal groups bombarded the Ryan plan with a barrage of criticism — including a recent ad by a liberal group that showed a Ryan look-alike pushing “Grandma” off a cliff — Republicans fought back. According to Gingrey, IPAB would be much worse.

“I would say to my Democratic friends under our plan: Grandma has a chance. She may survive being pushed off a cliff or thrown under a bus,” Gingrey said. “But under the Democratic plan for IPAB and rationing, she has no chance.”

A number of Democrats have joined the Republicans, doctors, hospitals and drug companies opposing the law.

Rep. Allyson Schwartz, D-Pa., who testified at Wednesday’s Energy and Commerce Committee Hearing, said in a statement that Congress “must assume responsibility for legislating sound health care policy for Medicare beneficiaries” and that allowing IPAB to stand essentially translates to an abdication of that duty and “would undermine our ability to represent the needs of the seniors and disabled in our communities.”

Even with all the heated rhetoric, half of Americans support a cost-cutting board similar to IPAB, according to a June tracking poll from the Kaiser Family Foundation. Fifty percent of those polled said they would trust such an independent panel of full-time experts “a great deal” or a “fair amount” while Congress and private insurance companies garnered just 34 percent.

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