MedPAC talks cost cutting as IPAB looms
Misvalued clinician services targeted as savings opportunity
Washington—A major challenge facing the new president and Congress in 2017 will be to find a solution to the financial crisis facing Medicare, and medical specialists such as urologists whose patient bases are largely composed of older Americans will undoubtedly be affected.
Two days of discussions at the Sept. 7 and 8 meetings of the Medicare Payment Advisory Commission (MedPAC) highlighted the difficulties and complexities that will face policymakers as they consider solutions, as well as some of the implications for specialists as efforts to improve payment levels for primary care physicians continue.
IPAB could start in 2017
One key point that emerged: The Independent Payment Advisory Board (IPAB), which the physician community, including the key organizations representing urology, has so strongly opposed, could kick in next year—despite efforts in Congress to kill it off. The IPAB, established by the Patient Protection and Affordable Care Act, would consist of 15 presidentially appointed and senatorially confirmed advisers. Its job is to propose Medicare payment policies aimed at reducing spending growth.
Although IPAB members have not been appointed, MedPAC Special Assistant Maggie Herman reminded commission members that the IPAB’s responsibility passes to the Secretary of Health and Human Services, who becomes responsible for making the necessary recommendations should target growth rates be exceeded.
“To date, the target growth rates have not been exceeded,” Herman said. “However, the Medicare actuaries project that it may be triggered next year.”
The IPAB, according to law, cannot ration care, raise beneficiary premiums, increase cost sharing, or alter eligibility. The savings proposed by the IPAB, or the Secretary should it fail to act, automatically become law unless Congress acts to amend or block them within a specific time period. Congress must then produce savings that at least equal the IPAB’s.
MedPAC Senior Analyst Jennifer Podulka outlined a stark forecast for Medicare’s solvency that went far beyond predictions by Medicare trustees, who predict that the Hospital Insurance Trust Fund will run out of money by 2028, 2 years earlier than projected last fall. But Podulka pointed out that Part A services, financed by a payroll tax, are projected to become insolvent in 12 years as payroll tax revenues are not keeping up with Part A spending.
The infusion of baby boomers into the Medicare program and increases in drug costs and some diseases such as diabetes are all contributing to increased costs, she said, predicting that Medicare spending is projected to rise from 3.5% of the economy today to just over 6% by 2040.