What is the Obamacare Independent Payment Advisory Board (IPAB)?

By Barbara Day, M.S., R.D., C.N.

The Independent Payment Advisory Board (IPAB) was very cleverly buried in the 2700 pages of Obamacare that NO ONE especially the Democrats who forced this legislation through Congress actually read. According to an article by Daily Caller writer Matthew Boyle, Congressman Phil Roe, M.D., a Tennessee Republican, the IPAB is the “real death panel” in the health care law for seniors. Cuts to Medicare are already happening and by 2014 more will be implemented for current Medicare recipients.

According to National Review’s, Stanley Kurtz, “as IPAB caps Medicare payments for various services, the elderly will be unable to obtain many kinds of care, or will experience de facto rationing via long treatment delays and sharp declines in the quality of care…IPAB rationing will hit many current seniors whereas  Ryan’s plan (The Path to Prosperity) will never affect anyone now 55 or older.”

The Power of the IPAB

The purpose of the 15 member board is to develop proposals to reduce the growth of Medicare spending. Medicare health decisions for care will be based on cost rather than best possible option for care. According to Kurtz,  Obama’s debt commission headed by Simpson and Bowles, “has pushed for IPAB to be granted a much wider range of powers including the extension of its authority beyond Medicare to all of Obamacare.”  With this added power, the IPAB could effectively force rationing care for all Americans to save money.

According to The Heritage Foundation, members of the IPAB will be persons with professional background such as physicians and experts in prescription drug benefits and third-party payment but the majority of board members cannot be “directly involved” in providing Medicare benefits or services.

IPAB members will be appointed by President Obama.  Congress will not be allowed to interview any of the IPAB members prior to appointment. Obama will appoint members who share his political & ethical views on senior care.  Each member will make $160,000+ per year in salary. According to Matthew Boyle’s column, “the salary is slated to come out of the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Trust Fund, funds that pay for medical costs for some Medicare recipients. Annually about $2.5 million that would normally cover Medicare patients’ medical costs would go toward paying the salaries of the 15 IPAB members.” According to Medicare’s Chief Actuary, Richard Foster, “the Secretary of HHS is required to implement the BOARD’S recommendations unless the statutory process is overridden by new legislation.”

Medicare Payment Rates will be Cut 30% over the Next 3 years!

According to the Health Reform Report written by Peter Ferrara, Director of Entitlement and Budget Policy at the Institute of Policy innovation, Medicare payments rates for doctors and hospitals serving seniors will be cut by 30% over the next 3 years. By 2019, Medicare payments will actually be lower than under Medicaid. Richard Foster, the Chief Actuary of Medicare, “reports that ultimately under Obamacare Medicare, payment rates will be only 1/3 of what will be paid by private insurance and only ½ of what is being paid by Medicaid, where the poor often can’t find access to essential care.”  The reality is seniors will have a very difficult time finding physicians who will agree to care for them based on poor reimbursements under Obamacare.

IPAB Help on the Way for Slashing Medicare Costs

The purpose of the IPAB is to cut the costs of Medicare spending. Keep in mind, the only cuts the IPAB is allowed to make would be CUTTING PROVIDERS’ REIMBURSEMENTS.  In fact, according to The Heritage Foundation’s Obamacare and the Independent Payment Advisory Board: Falling Short of Real Medicare Reform By Robert Moffit, PhD, “the board can make no recommendations that affect hospitals or hospice care until 2020.  As more and more baby boomers are retiring, Medicare under Obamacare continues to make huge cuts. Ferrara reported under Obamacare legislation, up “to $818 billion will be cut over the first 10 years of full implementation, 2014 – 2023 and $3.223 trillion over the first 20 years, 2014 – 2033, for Medicare Part A alone!” In addition, Ferrara reported “another $1.048 trillion cuts under Medicare Part B for the first full 10 years and $4.95 trillion over the first 20 full years. These are cuts for seniors that are already retired!”  Looking at the actual percentages of cuts that comes out to 60% per year for Medicare Part A and 43% for Part B. Most of these cuts are Medicare payments to physicians, hospitals and other health care providers who take care of the health of our seniors. How long will it take for hospitals that employ physicians to go bankrupt as a result of drastic cuts? According to the Medicare Chief Actuary currently 2/3 of hospitals are losing money on Medicare patients.

IPAB Actions = Cost Shifting to Private Sector + Mass Exodus By Physicians

The IPAB actions will help accelerate the cost shifting to the private sector. Plus, as additional cuts to physician Medicare reimbursements occur, more physician exodus from Medicare will be realized. If seniors have less access to care then maybe Medicare will actually realize a savings?  Oops!

IPAB Cuts Deeper to Medicare Advantage

As many as 50% of all seniors who currently have Medicare Advantage will lose their plan, a promise broken by Obama. In fact, the IPAB is authorized to make deeper cuts to administrative costs of Medicare Advantage than have already been cut under Obamacare.

Many health insurance companies will have to tweak their Medicare Advantage type health insurance policies to bridge the gap so that Medicare patients can actually have access to care. Since the Federal Government will not subsidize these programs like in the past, the premium costs will be much higher as a result but at least seniors may have access to care if these programs may higher reimbursements to health care providers.

Electronic Medical Record (EMR) May Increase the Exodus of Physicians

While EMRs may help to rein in Medicare spending, private practice physicians may not want to take the time away from patients to utilize an EMR or pony up the $100,000 cost to implement a computerized system that will be approved by Medicare. By 2015, all physicians who care for Medicare patients will have to utilize approved EMRs or they will receive Medicare payment cuts. Priavate practice physicians can receive $44,000 of federal aid (that’s $56,000 the practice has to eat) paid over a six year period to computerize while the reimbursements by Medicare keeps getting smaller and smaller. Practices will have to look at the cost of computerizing versus the loss of revenue from the decrease is reimbursements from Medicare to determine if they can afford to continue to see Medicare patients.

EMRs will allow the Federal Government more effectively keep track of each Medicare patient’s age, diagnosis, prognosis and how many dollars each Medicare recipient will cost the taxpayers. Will that be the next way to control costs? Oops!

Concierge Medicine to the Rescue for Senior Care

Seniors who can afford concierge medicine would benefit since rationing of care under Obamacare Medicare will become the standard of care and seniors will have a difficult time finding a physician who will care for them. Concierge medicine is defined by paying a flat yearly fee to a physician in return patients have 24/7 access to the physician at no additional fees. Concierge practices limit their patient numbers to be more accessible.  Yearly fees currently are from $1500 – $4200 per year per patient.

The Bottom Line: Obamacare will Hurt Senior Care Dramatically!

As A. Barry Rand, chief executive of AARP, the lobby for older Americans, stated to the New York Times, “Relying on arbitrary spending targets is not a good way to make health policy, especially when decision may be left to the unelected and unaccountable.” Senator John D. Rockefeller (D-WV) said “Medicare payment policy should be determined by experts, using evidence, not by the undue influence of special interests.”

Barbara Day, M.S., R.D., C.N, is a registered dietitian (www.DayByDayNutrition.com) who has been teaching healthy lifestyles strategies to consumers for over 35+ years.  

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