Unbiased Analysis of Today's Healthcare Issues

Is IPAB the new “Doc Fix”?

Written By: Jason Shafrin - Oct• 12•12

There has much debate in the Presidential debates about IPAB, the Independent Payment Advisory Board. IPAB can make cuts to Medicare spending, but the question is whether any of these recommended cuts would  ever actually be enacted, since Congress can reverse any IPAB recommendation.  According to an article in The Hill, the answer may be ‘no’:

The IPAB’s job is to identify payment cuts if Medicare spending rises faster than a certain rate. After the first few years, the IPAB will kick in if Medicare rises faster than inflation plus 1 percentage point.

The board technically makes “recommendations” to Congress, but as a practical matter, its cuts will take effect automatically unless Congress votes to block them — and comes up with equivalent savings.

Here are some of my own posts on the Sustainable Growth Rate and the Medicare Economic Index.

A healthcare lobbyist suggested that the IPAB’s cuts could become a sequel to the “doc fix” — the scheduled cuts in doctors’ Medicare payments that Congress scrambles to avoid at least once a year. Medicare’s chief actuary has raised the same possibility concerning the healthcare law’s other Medicare cuts, saying Congress could end up postponing them time and time again, just as it does with the doc fix.

Background on the ‘Doc Fix’

This CBS issue brief provides a nice summary on the “Doc Fix”:

The Medicare Sustainable Growth Rate, dubbed the “doc fix”, was created in 1997 to curb medical spending by setting payment targets for physicians administering to Medicare patients. The measure has required yearly reductions in physician payments since 2002, but Congress has blocked the reduction every year. Abandoning the doc fix by freezing physician payments between 2012 through 2020, according to the Simpson-Bowles deficit commission report, would cause an additional $267 billion in Medicare spending.

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One Comment

  1. article says:

    A motivating discussion is definitely worth comment.

    There’s no doubt that that you should publish more about this issue, it might not be a taboo matter but usually people don’t speak about such topics.
    To the next! All the best!!

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