The Patient Protection and Affordable Care Act (PPACA) created the Independent Payment Advisory Board (IPAB, or the Board) and charged the Board with developing proposals to “reduce the per capita rate of growth in Medicare spending.”  The Secretary of Health and Human Services (the Secretary) is directed to implement the Board’s proposals automatically unless Congress affirmatively acts to alter the Board’s proposals or to discontinue the automatic implementation of such proposals.  The health reform law goes much further than any previous law in the way it constrains Congress from changing prior laws, in this case laws that are the result of recommendations by the Independent Payment Advisory Board, according to the Congressional Research Service.  The law also is unprecedented in the way it makes it nearly impossible to undo the fast-track process for turning IPAB recommendations into law.

The Goldwater Institute is challenging the constitutionality of IPAB in a federal district court in Arizona.  That suit, Coons v. Geithner, highlights that the law specifies that Congress may only repeal the law’s fast-track procedures during a 14-business day period in 2017 – between Jan. 1, 2017 and Jan. 31, 2017.  The repeal must receive a three-fifths vote in the House and Senate.  The law further dictates that the repeal must be a joint resolution, and it even prescribes how that joint resolution must be written.  “The Act thus burdens and/or purports to deny members of Congress, including Plaintiffs Representatives Flake, Franks and Shadegg, of their legislative power and right to consider, review, debate and vote on the legislative proposals of IPAB like any other legislative proposal and to repeal IPAB like any other administrative agency that is legislatively established,” the complaint states, referring to Arizona Republican Reps. Jeff Flake, Trent Franks and John Shadegg.  Goldwater says the IPAB provision violates lawmakers’ free speech.

When the Senate first included IPAB in its version of health reform, House lawmakers from both parties raised concerns because the board's annual recommendations automatically become law if Congress does not replace them with an alternative that saves as much money.  Those who defended the IPAB provision said it was modeled after the Base Realignment and Closure (BRAC) Commission, which also was designed to make politically difficult decisions that Congress had repeatedly failed to handle.  Both the IPAB and BRAC procedures set up a process by which certain policy recommendations automatically go into effect unless a law is enacted within a certain time to block the changes.  Such disapproval resolutions are not unique.  For example, every regulation issued by the executive branch is subject to a special congressional disapproval mechanism under the Congressional Review Act, though that mechanism has rarely been used.

The annual IPAB sequence of events begins each year, starting April 30, 2013, with the Chief Actuary of the Centers for Medicare & Medicaid Services calculating a Medicare per capita growth rate and a Medicare per capita target growth rate.  If the Chief Actuary determines that the Medicare per capita growth rate exceeds the Medicare per capita target growth rate, the Chief Actuary would establish an applicable savings target—the amount by which the Board must reduce future spending.  This determination by the Chief Actuary also triggers a requirement that the Board prepare a proposal to reduce the growth in the Medicare per capita growth rate by the applicable savings target.  The Board cannot ration care, raise premiums, increase cost sharing, or otherwise restrict benefits or modify eligibility.  In generating its proposals, the Board is directed to consider, among other things, Medicare solvency, quality and access to care, the effects of changes in payments to providers, and those dually eligible for Medicare and Medicaid.  If the Board fails to act, the Secretary is directed to prepare a proposal.

Board proposals must be submitted to the Secretary by September 1 of each year and to the President and Congress by January 15 of the following year.  Board proposals are “fast-tracked” in Congress, and IPAB proposals go into force automatically unless Congress affirmatively acts to amend or block them within a stated period of time and under circumstances specified in the Act.  Section 3403(d) of the Act establishes special “fast track” parliamentary procedures governing House and Senate committee consideration, and Senate floor consideration, of legislation implementing the Board or Secretary’s proposal.  These procedures differ from the parliamentary mechanisms the chambers usually use to consider most legislation and are designed to ensure that Congress can act promptly on the implementing legislation should it choose to do so.  PPACA also established a second “fast track” parliamentary mechanism for consideration of legislation discontinuing the automatic implementation process for the recommendations of the Board.

Patti Cullen, CAE
952.851.2487
pcullen@careproviders.org