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Dick Gephardt Comes Out Against IPAB, Despite Past Support For Similar Measure

By Igor Volsky  

"Dick Gephardt Comes Out Against IPAB, Despite Past Support For Similar Measure"

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Dave Weigel notices that former House Majority Leader Richard Gephardt (D) — who now spends his time lobbying on behalf of health care providers — is opposing the Independent Payment Advisory Board (IPAB), a 15-member commission that would make recommendations to Congress about lowering Medicare spending if costs increase beyond a certain point. From Gephardt’s op-ed:

Under the new law IPAB has been made responsible for suggesting and implementing cuts to Medicare. It is critical that Congress continue to be able to fulfill its duty to the American people and maintain direct oversight of Medicare on behalf of their constituents. Changes to Medicare’s payments should be based on careful consideration of the Medicare program itself — and not arbitrary budget targets.

Under the current law, IPAB will be an unelected and unaccountable group whose sole charge is to reduce Medicare spending based on an arbitrary target growth rate. It will propose cuts to Medicare that Congress can override only with supermajority votes, an unnecessarily high and unrealistic bar. Just as important, these cuts are likely to have devastating consequences for the seniors and disabled Americans who are Medicare’s beneficiaries because, while technically forbidden from rationing care, the Board will be able to set payment rates for some treatments so low that no doctor or hospital or other healthcare professional would provide them.

Since groups like the American Chiropractic Association — which could face cuts under the IPAB — are now signing the front of Gephardt’s paychecks, his opposition is expected, even if his tone isn’t. (There is nothing “unelected” or “unaccountable” about a body that is confirmed by the Senate and sets rates in a transparent manner, for instance.)

But there’s one other problem with his critique. As a long-time proponent of controlling health care costs, Gephardt has supported greater government intervention in the health sector and in 1994 proposed empowering the Secretary of Health and Human Services to establish “target rates of growth” for health costs that included the private sector (thus going further than the IPAB). The following is from the Congressional Budget Office’s (CBO) description of his plan:

The proposal would set target rates of growth for the Medicare program (Parts A, B, and C, together) and for the private sector. It would set Medicare’s payment rates accordingly and would establish a standby system of cost containment for the private sector.

Medicare’s cost controls would go into effect in 1996 for Parts A and B and in 1999 for Part C. The target for total Medicare spending per capita would increase by the rate of growth of gross domestic product (GDP) per capita plus 1.8 percentage points in 1996 and by lesser amounts thereafter. In 2000 and beyond, the target would increase by the five-year average rate of growth of GDP per capita. The per capita estimates would be allocated among 10 or more classes of health care services using complex procedures specified in the proposal The Secretary of Health and Human Services (HHS) would set reimbursement rates for providers, with the goal of meeting the targets.

Spending targets would also be established for the private sector. The per capita targets would be allocated by class of service, as in Medicare, and by state of residence, and the Secretary of HHS would determine maximum payment rates that corresponded to the targets. The maximum payment rates would be only advisory through 2000. Starting in 2001, however, they would become mandatory in states that exceeded their per capita spending target.

Gephardt is not the only critic of the IPAB who supported it in a past life. In 2009, House Budget Chairman Paul Ryan (R-WI) also proposed a plan which sought to establish “two governmental bodies to broadly apply cost effectiveness research in order to develop guidelines to govern the practice of, and payment for, medical care.”

ThinkProgress intern Sean Savett contributed research to this post.

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