The Independent Payment Advisory Board (IPAB) is a controversial element of the recently passed health care reform.  The American Medical Association is "opposed to the current scope and authority of IPAB."  Says the AMA "Modification of the IPAB authority and framework is one of the highest legislative priorities for the AMA in the next session of Congress."

The IPAB will be a 15-member panel who's charge is "to extend Medicare solvency and reduce spending growth through the use of a spending target system and fast-track legislative approval process" reports the AMA in their reporting on this issue.

They report that beginning in 2013, the CMS will project whether Medicare's per-capita spending growth rate in the following two years will exceed a targeted rate.  If the targets are expected to be exceeded the IPAB will propose recommendations to Congress and the president to reduce the growth rate. The IPAB's first set of recommendations would be proposed on Jan. 15, 2014.

The AMA reports that "Spending rate reductions will be established at:
0.5 percent in 2015
1.0 percent in 2016
1.25 percent in 2017
1.5 percent in 2018 and beyond"

If Congress fails to pass legislation by Aug. 15 each year to achieve the required savings through other policy changes, the IPAB's recommendations will automatically take effect.

"The IPAB is prohibited from submitting proposals that would ration care, increase revenues, change benefits, modify eligibility, increase Medicare beneficiary cost-sharing (including Parts A and B premiums), or change the beneficiary premium percentage or low-income subsidies under Part D. Hospitals and hospice will not be subject to cost reductions proposed by the IPAB from 2015 through 2019. Clinical labs would be exempt for one year," states the AMA.

Beginning in 2014, the IPAB must also submit an annual report on system-wide health care costs, patient access to care, utilization and quality of care that allows comparison by region, types of services, types of providers, and payers—both private insurers and Medicare. By 2015, and at least every other year thereafter, the IPAB will submit recommendations to slow the growth in national health care expenditures while preserving or enhancing quality of care.

Congress cannot consider any bill or amendment that does not meet the IPAB targets or that would repeal or change the fast-track congressional consideration process without a three-fifths vote (60) in the Senate. The HHS secretary must implement the IPAB proposal on Aug. 15 of the year in which the proposal is submitted.

The IPAB members are to include:
Fifteen members appointed by the president, by and with the advice and consent of the Senate; in selecting individuals for nominations for appointments to the board, the president shall consult with:
(i) the majority leader of the Senate concerning the appointment of three members; (ii) the speaker of the House of Representatives concerning the appointment of three members;
(iii) the minority leader of the Senate concerning the appointment of three members; and
(iv) the minority leader of the House of Representatives concerning the appointment of three members

Those qualified to be appointed members of the IPAB will include "individuals with national recognition for their expertise in health finance and economics, actuarial science, health facility management, health plans and integrated delivery systems, health facilities reimbursement, allopathic and osteopathic physicians, other providers of health services, and other related fields who provide a mix of professionals, broad geographic representation, and balance between urban and rural areas," the AMA reports.