[Congressional Record Volume 156, Number 47 (Wednesday, March 24, 2010)]
[Extensions of Remarks]
[Pages E465-E466]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       RECONCILIATION ACT OF 2010

                                 ______
                                 

                               speech of

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                         Sunday, March 21, 2010

  Mr. STARK. Mr. Speaker, I, on behalf of myself and Ms. Slaughter, 
rise to speak about the Independent Payment Advisory Board, IPAB, which 
is a new executive branch body created in the Senate-passed health 
reform bill and charged with constraining Medicare spending. The IPAB 
is given unprecedented power to make sweeping changes to the Medicare 
program without going to Congress for approval. I and many of my 
colleagues in the House are concerned about some of the specific 
provisions and procedural changes included in section 3403 of H.R. 
3590.
  Since its inception in 1965, Medicare has guaranteed access to health 
care for 115 million Americans who would otherwise find it nearly 
impossible to obtain affordable health insurance in the private market: 
senior citizens, people with disabilities, and those with end-stage 
renal disease. Medicare is a critical part of this nation's social 
compact, and it is our obligation as elected representatives of our 
constituents to protect and preserve the program now and in the future. 
The health care reform legislation fulfills this responsibility by 
making a number of substantial improvements to Medicare, including 
provisions that improve benefits, extend solvency by at least 9 years 
and winnow out waste, fraud and abuse.
  As part of the effort to make improvements to the Senate-passed bill, 
key chairmen and Members of the House and Senate, along with the 
administration, were also working on a number of important and 
necessary changes to the IPAB policy. Unfortunately, the Senate 
Parliamentarian indicated that any attempt to improve IPAB in the 
reconciliation bill would be ruled out of order, and could jeopardize 
the status of the entire reconciliation bill.
  Since we were unable to make any changes to the IPAB as part of the 
reconciliation bill, I would like to identify critical improvements 
that need to be made in subsequent legislation. Many of these changes 
had been agreed to by our colleagues in the Senate, as well as the 
administration, and I look forward to working with them to ensure they 
are enacted in the near future.
  While IPAB is designed to help control growing costs in Medicare 
through swift implementation of payment and delivery reforms, the 
actions of the board will be driven by the need to meet targets for 
Medicare cost growth. As we have seen with prior attempts to control 
health care spending, limiting spending to arbitrary and 
unrealistically low growth caps is a recipe for failure. In order for 
IPAB to have any real hope of controlling Medicare cost growth without 
threatening access to care, as is required, the growth targets must be 
rational and realistic. The current spending targets mandated by IPAB 
are neither. They fail to fully take into account the three variables 
that drive health spending growth: price, volume of services, and 
intensity of services. The target only accounts for price growth, and 
does so at an unrealistically low rate. Controlling costs in the health 
care system is important, and I am committed to doing so. In fact, 
Medicare growth has typically been below private sector health care 
cost growth. However, the growth targets established by IPAB need to be 
revised and increased to reflect a more realistic expectation about how 
much growth can be slowed in order to ensure continued access to care 
and a strong program infrastructure in the future.
  The IPAB policy as written by the Senate also tips the balance of 
power too far in favor of the executive branch. In the event that IPAB 
cannot agree on Medicare recommendations required by the targets, the 
Senate bill requires the Health and Human Services Secretary to make 
recommendations instead. Like IPAB's proposal, the Secretary's proposal 
would become law unless Congress passes an alternative. It is one thing 
to give an independent board of health care experts such sweeping power 
to change the Medicare program, but it is quite another to give that 
power to a partisan political figure who reports directly to the 
President. I say this not as a negative comment directed toward our 
current Secretary or President, but a general concern about whether we 
should empower one person with the ability to make such potentially 
sweeping changes to the Nation's signature health program.
  Furthermore, by placing unprecedented procedural barriers to 
congressional consideration of alternatives to the IPAB or secretarial 
proposals, the bill attempts to virtually lock Congress out of the 
process of making changes to Medicare. In the event IPAB or the 
Secretary mandates implementation of draconian cuts to Medicare, 
Congress will encounter procedural barriers to changing those 
recommendations in a meaningful way.
  Thus, in order to maintain a proper balance between Congress and the 
executive branch, all parties had agreed to use a sequestration process 
to meet the mandated savings targets should IPAB fail to make 
recommendations on how to meet those targets. Instead of the decisions 
going to the executive branch, the onus would fall on Congress to 
arrive at thoughtful ways of reducing spending. If Congress failed to 
agree on ways to reduce spending, sequestration would go into effect. 
But it would be my hope and expectation that this would not happen, and 
that Congress would instead be spurred to action by the threat of 
sequestration.
  Another important flaw with IPAB that needs to be addressed is the 
fact that it ignores the broken system used to update Medicare 
physician payment rates. Under current law, the sustainable growth rate 
formula will require physician payment rates to be reduced by more than 
30 percent over the next decade. Yet, the IPAB could decide to make 
additional cuts on top of those already set to take place. The House 
has passed legislation that would make comprehensive permanent reforms 
to the physician payment formula, but that bill has not been taken up 
by the Senate. As such, all parties agreed that physician payment rates 
should be off limits to IPAB until the sustainable growth rate is 
replaced with a permanent, stable way of updating payments to 
physicians.
  I also want to clarify legislative intent with regard to one issue in 
IPAB. Section 1899A(c)(2)(A)(iii) of the Social Security Act, as added 
by Section 3403 of PPACA, states that in the case of IPAB proposals 
submitted prior to December 31, 2018, IPAB shall not include any 
recommendations that would reduce payment rates for providers that 
receive an additional market basket cut on top of the productivity 
adjustment. The rationale for this provision is that these providers 
are already facing extra downward adjustments in their payments and 
thus should not be subject to ``double jeopardy'' by also being subject 
to IPAB recommendations which will further reduce spending. In creating 
this exclusion, it is the intent of Congress to exclude all payment 
reductions applicable to providers captured by this language in all the 
relevant years. Therefore, in the case of inpatient hospitals, the 
provision excludes from IPAB recommendations payment reductions 
applicable to hospitals including payment reductions for indirect 
medical education under 1886(d)(5)(B), graduate medical education under 
1886(h), disproportionate share hospital payments under

[[Page E466]]

1886(d)(5)(F), and capital payments, as well as incentives for adoption 
and maintenance of meaningful use of certified electronic health record 
technology under 1886(n). In addition, further clarifications are 
needed to ensure that IPAB is empowered to seek savings or payment 
improvements for all items and services provided to Medicare 
beneficiaries.
  There are smaller, but no less important additional improvements that 
I believe need to be made. Changes made to the Medicare program by IPAB 
are granted broad exemption from judicial review. We should remove this 
exemption to ensure that IPAB is not above the law and its actions can 
be reviewed in a court of law.
  The legislation also prevents IPAB from making changes that would 
increase premiums or ration care, but it is important to include the 
specific protections that are scattered through the Social Security 
Act. Medicare law contains an array of beneficiary protections that are 
designed to ensure that seniors and people with disabilities have 
access to affordable care. The IPAB should not be permitted to make 
changes to these key beneficiary protections.
  Finally, as the legislation is written, IPAB would be required to 
reduce spending above the growth targets resulting from unforeseen and 
unavoidable health events, such as a flu pandemic, hurricane, or act of 
terrorism. Increases in spending from these kinds of catastrophic 
events should be excluded from the overall spending targets.

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