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The wrong fix for Medicare

Unaccountable Independent Payment Advisory Board will harm seniors

By Gary Pushkin and Anuradha D. Reddy

7:07 AM PDT, April 2, 2012

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Medicare is in desperate need of reform. Program costs are spiraling out of control and threatening to bankrupt the country. Here in Maryland, on average, each Medicare enrollee costs about $11,400 per year — that's a thousand dollars higher than the national average.

Policymakers need to determine how to cut the program's costs. However, during that process, they need to be wary of compromising the care of beneficiaries. Some 800,000 Maryland seniors depend on Medicare to survive. Reducing their benefits or undermining the quality of their treatments could be devastating.

Unfortunately, a new federal board now threatens to change Medicare for the worse. The Independent Payment Advisory Board (IPAB) was established by the 2010 Affordable Care Act. The board will consist of 15 members, appointed by the executive branch. The board is tasked with slashing spending if Medicare's growth rate exceeds a certain target.

The fate of the Affordable Care Act now rests with theU.S. Supreme Court. But whether the law is ultimately upheld in full, upheld in part or completely thrown out, the Independent Payment Advisory Board should not be allowed to stand.

Why? For starters, the IPAB is largely unaccountable. And the specific cost cuts it's empowered to make will harm the quality of care provided to seniors — both here in Maryland and across the country.

The IPAB's recommendations automatically become law unless Congress goes through a complicated procedure to cut the same amount from the Medicare budget, or vetoes the recommendations entirely via a very unlikely supermajority vote.

As Peter Orszag, former Office of Management and Budget director under President Barack Obama, has noted, the IPAB constitutes the "single biggest yielding of power to an independent entity since the creation of the Federal Reserve."

The IPAB is not empowered to actually improve the quality of Medicare or reform its outdated payment system. It can only cut its costs.

Therefore, it is unlikely the IPAB will be able to take patient issues into account. Seniors and their advocates can't even examine the proceedings: The IPAB is, by design, not subject to the Federal Advisory Committee Act, which makes other such bodies operate openly, with meeting agendas and minutes available to the public.

The Congressional Budget Office examined how the IPAB might make cuts and concluded that the board will probably reduce payment rates for doctors and hospitals participating in Medicare.

But Medicare reimbursements are already dangerously low. The American Medical Association found that current rates have prompted 17 percent of physicians — and 31 percent of primary care professionals — to cap how many Medicare patients they can offer care. The last five years of data show the number of doctors who do not accept new Medicare patients doubling because of the low reimbursement rates.

IPAB cuts to reimbursement rates would make this situation even worse. Treating Medicare patients would become unprofitable for even more doctors. More caregivers would stop taking on new enrollees or leave the system entirely. And seniors would be stuck with fewer physicians to treat them, jeopardizing their health.

The IPAB is also likely to start lowering payment rates for drug plans under Medicare Advantage and Part D. Doing so would push out drug providers, leaving fewer treatment options for patients. Here in Maryland, 44 percent of Medicare recipients have Part D drug coverage. That means close to 400,000 local seniors could see their benefits drop as a result of the IPAB.

Hundreds of health care groups support the repeal of the IPAB, including the Maryland State Medical Society. So does the bipartisan group of 235 legislators who have cosponsored an IPAB repeal bill in the House of Representatives.

The IPAB is unaccountable. And it's likely to enact policies that will seriously degrade the quality of care for Maryland's Medicare population. The program's costs do need to be controlled — but not in a way that hurts the health of our state's elderly.

Dr. Gary Pushkin (gpush@comcast.net) is an orthopedic surgeon and past president of the Baltimore County Medical Association; Dr. Anuradha D. Reddy (anured2005@yahoo.com) is a rheumatologist and past president of the Baltimore City Medical Society.