Providers won't see IPAB-recommended cuts till 2016

CMS says healthcare price increases won't hit predetermined trigger
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With Medicare cost growth under control for the time being, the controversial Medicare Independent Payment Advisory Board (IPAB) is "effectively neutered" until at least fiscal 2016, The Washington Post's Wonkblog reported.

The IPAB's power to regulate provider pay activates only if Medicare per-enrollee spending grows faster than the average consumer prices and medical prices based on the Consumer Price Index, the blog's Health Reform Watch noted.

Medicare's chief actuary had to determine by April 30 whether that so-called trigger point would be hit in time for the board to act in fiscal 2014 for implementation in fiscal 2015, the first year the board could have acted, the Post noted. The determination by acting chief actuary Paul Spitalnic: No.

"The projected 5-year average growth in Medicare per capita spending is 1.15 percent, and the 5-year average growth target is 3.03 percent," Spitalnic said in an April 30 letter (.pdf) to Marilyn Tavenner, acting administrator of the Centers for Medicare & Medicaid Services. "Because the projected 5-year Medicare per capita growth rate does not exceed the Medicare per capita target growth rate, there is no applicable savings target for implementation year 2015 (determination year 2013)."

The IPAB is unpopular politically, as well as in the medical community. In an issue brief opposing the board, for example, the American Medical Association worries that because hospitals and hospices are excluded from rate reductions until 2020, "only a few providers, including physicians, will bear the brunt of the cuts."

The provider group also notes that IPAB target growth rates have been met only four times in the last 25 years.

The AMA has plenty of company. Last month more than 500 medical organizations banding together under the banner of the Healthcare Leadership Council sent a letter to Congress urging for a repeal of IPAB. The organizations argued the board "will not only severely limit Medicare beneficiaries' access to care but also increase healthcare costs that are shifted onto employers and working men and women in the private sector."

To learn more:
- read the blog post
- here's the letter (.pdf)
- check out the AMA issue brief (.pdf)
- see the Healthcare Leadership Council letter (.pdf)

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