Just the Facts…..Please

April 10, 2012
10:10 am

Today, I saw an argument in support of the Independent Payment Advisory Board (IPAB) – the 15-member board of political appointees with unprecedented power to reduce Medicare expenditures – that was so off the mark one would think it came from some sort of fringe website.  In fact, it was found on CBS News’s Marketwatch site.

CBS provided webspace for a consulting actuary to argue that there is really no difference between IPAB and private insurers.  IPAB will, he said, “assess whether certain procedures will be denied reimbursement, either due to ineffectiveness or excessive costs,” the same as private health insurers.  IPAB members may be unelected, but, he argues, private insurance claims adjusters aren’t elected either.

“It’s just a reality that any insurance program, whether commercial or governmental, will deny some claims, states this CBS News-hosted editorial.

We won’t even get into some of the obvious differences between IPAB and private coverage, such as the fact that employers can take their business to different insurers.  Or the fact that private insurers have appeals mechanisms, whereas IPAB decisions aren’t even subject to judicial review.

But that’s not even the biggest problem with this pro-IPAB argument.  IPAB isn’t structured to cut costs by denied payment for ineffective procedures.  It’s not about that at all.

As the Congressional Budget Office has made quite clear, the law creating IPAB explicitly forbids the board from rationing care, changing Medicare benefits or increasing beneficiary cost-sharing.  According to CBO, the board will, for all practical purposes, be limited to cutting healthcare provider payments to meet its cost-cutting targets.

That’s not distinguishing one treatment or therapy from another based on cost and effectiveness.  That’s simply paying physicians less to treat Medicare patients.  And, in so doing, IPAB threatens to widen the payment level gap between Medicare and, you got it, private insurers.  It will result in care for Medicare beneficiaries that is less accessible, not more cost-effective.

There is a legitimate debate to be had over whether IPAB is a wise public policy choice.  To have that debate, though, we need to be on the same platform in terms of understanding what this board will actually do.

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