IPAB is Medicare's New Hammer for Spending Accountability

The Hospitalist. 2012 January;2012(01):

January 26, 2012 | The Hospitalist

Dr. Flansbaum believes that, in order to effectively bring down costs, the IPAB should not be restricted to supply-side proposals (i.e. provider reimbursement), but also should be allowed to propose demand-side changes to Medicare’s benefit plans, such as tiered network pricing with higher premiums to cover the latest and most expensive technologies.

SHM supports the need for an independent entity to check the growth in Medicare spending, but it does not support the IPAB as it is currently established under the ACA because certain groups (including hospitals) are protected from its scrutiny during its first several years—a limitation that SHM says puts the board’s legitimacy into question and seriously weakens its potential cost-saving effectiveness. SHM supports replacing the IPAB with an independent board that (1) subjects all Medicare providers and suppliers to the same scrutiny without special interest carve-outs, (2) balances cost-saving with QI considerations, (3) protects delivery of quality services, and (4) ensures board membership that represents all potentially affected groups, including physicians. (Read the entire statement in the “Where We Stand” section of SHM’s Advocacy microsite at www.hospitalmedicine.org/advocacy.)

By removing the IPAB’s present handcuffs—opening its scope to all providers, as well as to demand-side changes in Medicare’s benefit structure—an IPAB-like entity with the proper staff and expertise can rationally think-out the choices that Congress will never make, according to Dr. Flansbaum.

“For the sake of our economy and our future generations, healthcare costs have to come down, even if that means some short-term pain,” he says. “Hospitals may take a hit. Some physician income might take a hit. Otherwise, there won’t be any hospitals or salaries to be hit.”

Christopher Guadagnino is a freelance writer in Philadelphia.

The IPAB timetable

2012: IPAB member confirmation expected. Congress appropriates first IPAB money.
2013: Chief actuary determines if Medicare spending growth reaches level that triggers the IPAB process.
Jan. 15, 2014: First set of IPAB proposals due, if triggered.
2015: HHS Secretary will implement IPAB’s proposals, unless Congress enacts its own proposal package achieving equal savings, or the Senate rejects IPAB’s proposals with a 3/5 majority vote.

IPAB is Medicare's New Hammer for Spending Accountability

The IPAB timetable

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