The Voice of William MacBain
IPAB is a four letter word
The House is taking up a bill to remove Medicare’s independent payment advisory board (IPAB) from the Affordable Care Act. Opponents of IPAB call it a death panel and claim it will ration care. That’s nonesense, and flies in the face of the legislation that created the IPAB, which prohitits it from ratioining anything. In fact, the law goes so far to anticiate critics’ concerns, real and imagined, that the board is prohibited from almost anything. It can’t change benefits, increase the eligibility age for Medicare, increase beneficiary premiums or cost sharing, tamper with eligibility rules, raise revenues in any way, or reduce payments to hsoitpals and hospices until fiscal 2020. What’s left is to recommend pay cuts for doctors, other providers, Medicare Advantage and Part D drug plans. The IPAB requirement to recommend cost reductions is triggered when Medicare costs exceed a pre-set limit. IPAB preserves what we love most about the sustainable growth rate formula (SGR), the automitic trigger that imposes physician fee cuts, but extends the reach to more providers and to Medicare health plans. It is unreasonable to expect that IPAB recommendatioins will meet a better fate than the SGR. While the ACA ostensibly makes IPAB cuts automatic unless Congress finds a better way to make the same cuts, in practice Congress can always vote to suspend the IPAB recommendation just as it suspends the SGR cuts.
Word for the day: Volatile
Volatile. n. Fickle, inconsistent, easily vaporized.
Thanks to the Affordable Care Act, Medicare Advantage finances are going to be volatile. Unwary actuaries may be easily vaporized.
The End of Health Insurance?
Writing in the January 30 New York Times, Zeke Emanuel and Jeffrey Lieberman predict that accountable care organizations will totally replace health insurance within the next eight years.
Capitation in Accountable Care Organizations
If you don’t already subscribe, we suggest you check out Accountable Care News, an online publication focused specifically on Accountable Care Organizations.
Why it’s gonna get worse
Not since the Edsel has anything been so perfectly designed to fail as the Supercommittee. So now what? The doc fix, for one, is in big trouble. In Washington accounting, it will cost an arm and a leg to do a permanent doc fix, since the savings it is supposed to generate go on forever, or at least as long as we have Medicare. A permanent solution might have been possible under cover of a Supercommittee deal — just one more adjustment among the trillions. Now it’s out on its own. At least the final accounting is a little better than was projected: only a cut of 27.4%, not 29%. Not much comfort if you are a doctor with a big Medicare practice.
New ACO Reg has some zingers
The newly minted ACO regulation from Medicare has some zingers hidden in its 696 pages. Okay, to be fair, the actual regulation is only 70 pages long, double spaced. The rest is all preamble, where CMS describes the 1200 comments on the proposed rule, and how they have responded (or not) in the final rule.
Shared Savings in ACOs is not a fair game
In the proposed rules for ACOs, and in the rules for Pioneer ACOs, CMS has established a clear preference for ACOs to take down-side risk. CMS wants to be repaid if an ACO records costs that are higher than expected. This is proposed as a reasonable counter-balance to the proposed payments that CMS will make to an ACO if it succeeds in generating savings .
