Rep. Paul Ryan is disputing claims that two independent advisory boards he introduced as part of his Patients’ Care Act (PCA) mirror the Affordable Care Act’s Independent Payment Advisory Board — a 15-member panel that he argues would “ration” health care. Responding to a blog post by the Incidental Economist’s Don Taylor that highlighted the similarities between Ryan’s boards and the IPAB, Conor Sweeney — the House Budget Committee’s Communications Director — sent Taylor a letter defending its chairman:

-The PCA empowers beneficiaries whereas the ACA enmpowers IPAB — “an unconstitutional board.”

-The ACA IPAB will “impose price controls, cut provider reimbursements, or make coverage determinations by fiat,” but the PCA’s Health Services Commission “exists solely for the purpose of encouraging transparency and proper metrics with respect to health care services.”

-IPAB will control Medicare costs by cutting provider reimbursements, “denying care for seniors.” Ryan’s Health Services Commission has “no authority to influence Medicare spending.”

But Ryan’s “differences” don’t mask the striking similarities between IPAB and the two boards proposed under the PCA — the Health Services Commission and the Forum for the Quality and Effectiveness in Health Care. In fact, in many ways, the PCA’s boards are more intrusive and hit providers harder. Read the pages 206-215 of the PCA Act here. ThinkProgress has also assembled a chart to illustrate:

-Sarah Bufkin

Rep. Michael Burgess (R-TX) badgered Health and Human Services Secretary Kathleen Sebelius during this morning’s Energy and Commerce hearing focused on the Independent Payment Advisory Board, insisting that HHS should cut a check to Congress for the money it has not spent in establishing the panel:

BURGESS: Who has been nominating to that board and is awaiting confirmation?

SEBELIUS: No one

BURGESS: And why is that?

SEBELIUS: Well, I think Congressman, the board is not activated until 2014, and I know that the President is in discussion with a number of potential nominees and I know that he’s consulted with various members of Members of Congress, but it will be up and running at the time.

BURGESS: So can we keep that $15 million that’s due October 1st because you apparently don’t need it…

SEBELIUS: We have no intention of using the money before there is a board up and running.

BURGESS: Well, who does the check go to?

SEBELIUS: I don’t think there is a check, there is money available that we would draw down.

BURGESS: Can we have that money back? We’re in a debt crisis, you may have heard.

Watch it:

First, keeping the Medicare growth rate below a certain point would do far more to reduce government spending than returning the $15 million needed to establish the board. Second, Sebelius couldn’t cut a check to Burgess even if she wanted to. The money is a mandatory annual appropriations that likely expires at the end of the year if it’s not spent by the agency. As Burgess well knows, that’s how the federal government operates.

Rep. Paul Ryan (R-WI) got to the heart of the GOP’s criticism of the Affordable Care Act’s Independent Payment Advisory Board (IPAB) — a 15-member commission that would make recommendations to Congress about lowering Medicare reimbursements if costs increase beyond a certain point — during this morning’s House Budget Committee hearing when he said that reducing payments to providers would undercut seniors’ access to doctors and hospitals and thereby ration their care. His argument is that Medicare already underpays providers, forcing them to either shift costs to individuals with private insurance or close off their Medicare business altogether, and any additional cuts will only exacerbate this problem.

The point is somewhat disingenuous, since Ryan’s budget maintains many of the provider reductions in the Affordable Care Act (while repealing the IPAB), and it ignores the fact the ACA will begin to change not just how much providers are paid for their services, but how they’re paid for delivering them. The law invests in delivery reforms that move away from the inefficient fee-for-service system and pay providers for episodes of care and greater care coordination. That’s something the Ryan budget does not do, as HHS Secretary Kathleen Sebelius, who was testifying before the committee, highlighted in her back and forth with the Chairman:

RYAN: Obviously if we underpay them it will save more money. The question is, if we underpay them, will they keep delivering the benefit? … Don’t you agree that if we underpay them they will just stop seeing beneficiaries?

SEBELIUS: Mr. Chairman, I think the assumption is that nothing changes in care…that we keep paying at the same not only rates, but keep saying for the same kinds of services. So if you assume that care delivery doesn’t change at all, that we keep paying for good care, the same that we pay for bad care, if we don’t have any changes in underlining care, if we dont’ coordinate care, if we don’t have more home based patient based care….That trend line is probably accurate.

I would suggest that what the Affordable Care Act does and what we have begun to do pretty successfully with the innovation center and the very enthusiastic support of a lot of health care providers across the country is look at where the best practices are…groups that have actually delivered very high quality care well below the trend line and capture that and then reach out to others to try to accelerate that change and use the enormous levers of the Medicare payment system to do just that to drive best practices.

Watch it:

Ryan’s other sleight of hand is his fundamental assumption: Medicare’s lower reimbursement rates are responsible for providers losing money. That may not always be true, however. Research into hospital costs suggests that the real culprit of lower hospital margins from Medicare is some combination of private payer laxity in setting competitive rates and provider clout in negotiating higher prices for their services. A study published in Health Affairs found that the higher reimbursements hospitals earn on payments from private payers are actually a “key reason that Medicare margins have declined.” “The apparent chain of causation is as follows. Strong market power leads hospitals to reap higher revenues from private payers. This in turn leads these hospitals to have weaker cost controls. The weaker cost controls lead to higher costs per unit of service. As a result, hospitals have a narrower margin on their Medicare business.”

In other words, hospitals are losing money precisely because the current reimbursement system — the very system that Ryan’s budget perpetuates — does not incentivize delivering efficient care — it encourages providing more care! That’s something the ACA seeks to change and IPAB can help accelerate.

The House Budget and Commerce Committees will both hold hearings today to examine the Independent Payment Advisory Board (IPAB) created under the Affordable Care Act, which could provide GOP lawmakers with the forums they need to continue to push their vocal opposition to the provision. Rep. Paul Ryan, who chairs the Budget Committee, has come down loudly against IPAB, calling the proposal a “rationining” board that will “diminish the quality of care for seniors.”

And yet Ryan introduced a bill that would create two similar boards just over two years ago in May 2009. The Patients’ Care Act, which he and three other GOP lawmakers sponsored, focused on the use of tax credits to secure health insurance from state insurance exchanges, but also provided for the establishment of two independent advisory boards charged to design research-based guidelines for reducing health care costs. Don Taylor of The Incidental Economist even described Ryan’s independent-advisory boards as having “more teeth, including provisions to allow for penalties for physicians who did not follow the guidelines, than does the Independent Payment Advisory Board.”

As ThinkProgress detailed in May, the parallels between the two proposals, IPAB and Ryan’s Health Services Commission and Forum for Quality and Effectiveness in Health Care, are impossible to overlook:

According to a Kaiser report, “IPAB is an independent board housed in the executive branch and composed of 15 full-time members appointed by the President and confirmed by the Senate. IPAB is directed to recommend savings for Medicare if the per capita growth in Medicare spending exceeds defined target growth rates.”

Compare this to Taylor’s description of the Patients’ Care Act:

“Health Services Commission [is] to be run by five commissioners appointed by the president and confirmed by the Senate. The purpose of the commission is to ‘enhance the quality, appropriateness, and effectiveness of health care services through the publication and enforcement of quality and price information.’

A systematic look at the Medicare program (treatment coverage decisions, payment approaches, quality improvement strategies) that was insulated from Congress in a manner similar to the military base-closing commission would be a good first step toward addressing cost inflation in Medicare in a comprehensive and reasoned manner. Lessons learned from Medicare could then be applied more broadly to the health system.”

It appears the GOP is determined to repeal the Affordable Care Act and its provisions, even when that means attacking policy proposals they once championed.

–Sarah Bufkin

Greg Sargent notices that despite the GOP’s best efforts to malign the Independent Payment Advisory Board (IPAB) as a health care-rationing, grandma-killing, Big Government takeover, a new Kaiser Family Foundation poll finds that Americans have more trust in “an Independent panel of full-time experts appointed by the president and confirmed by the Senate” proposing ways to reduce Medicare spending than Congress or a federal agency:

The problem, as the public knows, is that politicians spend too much time soliciting contributions from medical providers to ever pursue an even handed approach to reducing their reimbursement rates. And one need to look no further than the GOP’s latest round of health care additions to the Korean trade agreement to see why elected officials are just no good at controlling health care costs.

Sen. Mike Crapo (R-ID), who has received $131,900 from hospitals/nursing homes and $152,050 from Health care professionals in 2010 (both represent his top 10 contributors), has proposed amendments to make “adequate” payment updates to ambulatory surgery centers and prevent CMS from cutting physician payments when developing rates for Medicare Advantage. Similarly, Sen. Pat Roberts (R-KS) took in $140,100 from the industry before offering an amendment to exempt Critical Access Hospitals from consideration by IPAB for payment reduction through 2018.

This isn’t to say that there was some specific quid pro quo attached to the dollars, but I imagine that it’s a lot easier to make cuts on the benefits side of the program when you spend a lot of time with providers and they in turn contribute to your campaigns.

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.