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Administration Vetting IPAB Candidates, Though Panel Likely Won't Make Recommendations Until 2018

By Rebecca Adams, CQ HealthBeat Associate Editor

February 28, 2012 -- The Obama administration is slowly vetting candidates to serve on the controversial Independent Payment Advisory Board (IPAB) that House Republicans plan to soon vote to repeal, Health and Human Services Secretary Kathleen Sebelius recently told Ways and Means Committee members.

"Active discussions are under way about those possible candidates," Sebelius said. "Vetting those folks is not an easy task because this must be a full-time job."

The 2010 health care overhaul law (PL 111-148, PL 111-152) created the IPAB. But even some Democrats say that they would vote to kill it. The commission is supposed to issue recommendations to Congress to cut Medicare funding when the program's spending growth is higher than targets that the law sets out. The board's recommendations to cut future Medicare spending would take effect unless Congress acts to override the board's decisions in an up-or-down vote. The House Energy and Commerce Health Subcommittee is scheduled to meet this week to mark up repeal legislation (HR 452), which is sponsored by Rep. Phil Roe, R-Tenn., and has enough votes to pass the GOP-led House.

There is no real rush for the administration to nominate the members that it would like to seat on the commission because they have to be confirmed in the Senate, which is unlikely to do so before the fall elections. Also, the board is not expected to issue its first cost-cutting recommendations until at least 2018.

Sebelius reminded Budget Committee Chairman Paul D. Ryan, R-Wis., that because Medicare spending has been lower than projected when the health care law was passed, "IPAB is really not likely to be operational into 2018 or 2019."

Because Medicare spending has been lower than expected, the Congressional Budget Office (CBO) estimated last year that the commission would not be called upon to issue cuts until about 2018.

The fact that the administration is trying to persuade candidates to serve on the board is another indication, however, that President Obama is not backing away from IPAB despite its unpopularity with even some members of his own party. The president's fiscal 2013 budget calls for IPAB to hold Medicare spending even lower than the health care law requires, even though the Centers for Medicare and Medicaid Services actuary has said that the cuts in the law are already so deep that Congress probably will not allow some of them to take effect. The budget proposes modifying the trigger for the board to make recommendations, which is set at gross domestic product per capita growth rate plus 1 percentage point beginning in 2018. The budget plan would reduce that 1 percentage point by a half, forcing the board to offer proposals sooner, as Obama suggested in his deficit reduction plan last fall.

The move to repeal IPAB has less of a chance to pass in the Senate, which is home to the board's biggest defenders, such as John D. Rockefeller IV, D-W.Va. A similar repeal bill (S 668) in that chamber, sponsored by Texas Republican John Cornyn, does not yet have the votes to pass.

Sebelius' comments about IPAB came in a wide-ranging hearing based on the 2013 budget proposal. Lawmakers also quizzed her about Medicare Advantage reductions, which Sebelius agreed represent about 4 percent of the cuts that are expected to affect the program in the next few years.

Sebelius also defended the administration's contraception policy, saying that the agency is moving ahead on plans to forge a compromise on contraception. She is meeting with groups representing a wide range of views about the next steps, she said.

The secretary also was asked whether the health care law gives HHS the authority to create a federal exchange. Sebelius told lawmakers that the agency does have power to create an exchange and plans to use it.

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