Health Affairs

The Independent Payment Advisory Board

Bethesda, MD --An important and controversial element of the Affordable Care Act is the Independent Payment Advisory Board (IPAB). Beginning in 2013, the panel will have significant authority to recommend ways to put on the brakes if projected increases in Medicare spending exceed target growth rates. This latest health policy brief from Health Affairs and the Robert Wood Johnson Foundation explains why IPAB was created and summarizes the arguments for and against its existence.

The brief covers the following:

• Background. Because of intense stakeholder politics, Congress has had difficulty enacting policies to curtail the growth of Medicare spending.  The brief details how IPAB was conceived as a new agency housed in the executive branch to insulate the board at least somewhat from stakeholder pressure.
  
  

• The Board's Structure and Operations. The brief describes how IPAB members will be selected; how Medicare spending growth targets will be calculated; and what steps IPAB must recommend if targets are exceeded.

• 
  The Arguments for and Against. As the brief explains, proponents argue that IPAB will provide a much-needed backstop to current cost containment efforts, and that IPAB's existence may in fact help prompt Congress to undertake needed steps to reduce Medicare spending. Opponents fear that IPAB gives too much control to a group of unelected officials--and that the steps it is likely to take to shave Medicare spending would have consequences for beneficiaries, such as prompting more primary care doctors to stop treating Medicare patients.

• 
  What's Next: The brief details how some Republican lawmakers have introduced legislation to abolish IPAB, at the same time that the Obama administration has proposed expanding the board's authority. The fate of IPAB may be bound up with the Supreme Court's ruling in 2012 on the constitutionality of the Affordable Care Act.

Health Affairs, published by Project HOPE, is the leading journal of health policy. The peer-reviewed journal appears each month in print, with additional Web First papers published weekly at www.healthaffairs.org. You can also find the journal on Facebook and Twitter and download Narrative Matters on iTunes. Address inquiries to Sue Ducat at (301) 841-9962 or sducat@projecthope.org