In a policy paper released Wednesday, Douglas Holtz-Eakin -- president of the American Action Forum and former director of the Congressional Budget Office -- writes that the Independent Payment Advisory Board created by the Affordable Care Act could move Medicare "dangerously close to a rationed system," The Hill's "Healthwatch" reports (Baker, "Healthwatch," The Hill, 10/24).
Under the health reform law, IPAB can suggest lowering payment rates for treatments and medications, which would take effect unless Congress develops an equivalent alternative. However, it is prohibited from recommending specific changes to Medicare as strategies to control costs.
In addition, IPAB cannot ration care, raise taxes, revise Medicare benefits or eligibility, or increase beneficiaries' premiums and cost-sharing requirement (Burton/Radnofsky, "Washington Wire," Wall Street Journal, 10/4).
Policy Paper Details
Because IPAB is restricted to cutting providers' payments, Holtz-Eakin argues that it lacks adequate tools to ensure that steep cuts will not affect access to care. "'Rationing' will occur in complex and often subtle ways, and patients may never know that they could have received a more effective treatment," he writes, noting that any reduction in Medicare payments made by the board could prompt some physicians to stop accepting Medicare patients.
Holtz-Eakin writes that any cuts proposed by IPAB also could affect medical innovation. "New medicines for conditions like Alzheimer's or Parkinson's will likely have rapid cost growth, especially early after their introduction on the market," he writes, adding, "That will make them targets as IPAB is directed to focus on areas of 'excess cost growth.'"
He also notes that an exemption for hospitals means IPAB's purview would be limited to just over half of all Medicare spending in the panel's early years. While acknowledging that the exemption might have been developed to avoid charges of rationing, Holtz-Eakin suggests that it likely will lead to deeper cuts in other areas ("Healthwatch," The Hill, 10/24).
IPAB Has "Unprecedented Power," Cantor Says
Meanwhile, House Majority Leader Eric Cantor (R-Va.) in a new report argues that IPAB is "an unprecedented power that has the potential to dramatically impact the availability (by limiting reimbursements) of care for the nation's seniors."
The report -- titled "The Imperial Presidency" -- offers a critical review of the Obama presidency and his administration's policies.
IPAB "does not make just mere recommendations," the report states, adding that it "has the power to reduce what Medicare will pay doctors, hospitals and other health care providers, and [the panel's] recommendations will have the force of law unless Congress enacts a law to stop them" (Viebeck, "Healthwatch," The Hill, 10/23).