How Would the IMAB Work?
Tim Jost gives a nice précis of the Senate bill’s IMAB provisions here:
A signature feature of the Senate bill is the creation of a new 15-member independent Medicare Advisory Board composed of health care, health policy, and health economics experts as well as representatives of employers, third-party payors, consumers, and the elderly appointed by the President that is responsible for presenting Congress with proposals for reducing excess Medicare cost growth. In years when Medicare costs are projected to exceed a target rate, the Board will be required to make a proposal to reduce cost growth, which will go into effect unless Congress, following expedited procedures develops an alternative proposal. The Board’s proposals cannot ration care; raise taxes or Part B premiums; change Medicare benefit, eligibility, or cost-sharing standards; or reduce payments for providers whose payments have already been reduced by the market-basket adjustments, which will limit the Board largely to reducing Part C or Part D expenditures. The CBO scored the Board as saving $23.4 billion over 10 years.
There has been some confusion, as Slate’s Mickey Kaus illustrates, about the significance of the fast-track mechanism under which Congress would consider revisions to the IMAB’s cost-cutting proposals. Kaus quarrels with the notion that the procedural mechanism will place any real limits on the ability of future Congresses to reject the IMAB proposals:
Congress could reject its proposals without substituting equivalent savings anytime it wanted to ([as long as it] could obtain the President’s approval or override his veto). The Reid bill simply says Congress would have to substitute equivalent savings if it wanted to use a ‘fast track’ filibuster proof legislative pathway it sets up (a pathway that still allows a presidential veto). Future Congress’ [sic] don’t have to use that fast-track and no law Congress passes this year can make them, as far as I can see . . . .
Actually, that’s not quite right. In fact Reid’s bill says that any future bill to repeal or modify IMAB recommendations is “not in order” unless it achieves the targeted savings. (See the Act, p. 1019-20.)
That means that any bill, fast track or slow, that fails to meet the savings target will be subject to an objection, or point of order. (Note that we’re really just talking about the Senate here. House rules permit sweeping waivers of such procedural niceties.) If the point of order is sustained by the Chair, the bill is dead—unless there are 60 votes to waive the requirement or appeal the Chair’s ruling. No doubt some parliamentary chicanery will be available in some circumstances to evade the requirements, but similar procedural mechanisms are effective in other contexts (notably, the budget process) and are by no means an empty gesture.
But couldn’t a future law simply change the rules and axe the IMAB recommendations? Not without 60 votes in the Senate. Any bill proposing to repeal or modify the IMAB procedures would be out of order under Reid’s bill—and thus would have to overcome the 60-vote waiver threshhold.
Kaus also misreads the bill’s (admittedly odd) provision giving Congress an opportunity in 2017 to discontinue the IMAB by joint resolution. Kaus writes that Congress could kill the IMAB “by joint resolution, without the President’s approval.” In fact, joint resolutions do require presidential approval; concurrent resolutions do not. And this joint resolution will require three-fifths majorities—not exactly a sure thing.
The real innovation here—and what makes the IMAB different from MedPAC (that’s the Medicare Payment Advisory Commission that Congress so loves to ignore today)—is the bill’s “default” mechanism: if Congress fails to enact substitute legislation within 7 months1, then the IMAB proposals will take effect automatically, without need of congressional or presidential approval.
- The IMAB would be required to submit its proposals by January 15 of the year prior to implementation. If superseding legislation were not enacted by August 15, the Secretary of HHS would implement the proposals . See the bill, the Patient Protection and Affordable Care Act, pages 1000-53 of the pdf. [↩]
The Phases of Healthcare Reform
Does the legislation before Congress reform the healthcare system, or merely expand it?
The overhaul of our country’s healthcare system has two broad objectives: to provide for the health security of all Americans and to reduce the growth in national health spending to sustainable levels. It has become a common complaint that the legislation currently under consideration by Congress neglects to seriously confront the crisis of healthcare costs—and thus fails to meet the second objective—even if it makes significant headway on the first objective by expanding insurance coverage. I am more inclined to view the current legislative efforts as a necessary first phase in the pursuit of both of these complementary, intertwined goals.
Photo by stephanebenito.
But I also think that both the House bill (H.R. 3692) and the Senate bill (H.R. 3590) take appropriate and significant strides towards reform of the fee-for-service payment system widely considered responsible for the disproportionate inflation in the healthcare economy.
The health-security phase of reform is largely about insurance coverage. Both the House and Senate bills seek to ensure that everyone, or nearly everyone, has access to adequate and affordable health insurance, regardless of income or health status. As means to this end, the bills impose new federal regulations on insurers, expand Medicaid eligibility, create new infrastructure for the individual (non-group) insurance market, and offer subsidies to help low-income Americans purchase insurance. (NYT has a great comparison of details of the House and Senate bills.)
Much of the focus of the reform legislation is on the coverage issues, but that doesn’t mean that the cost problem is being ignored. In fact, both bills lay important groundwork for reforming the delivery system and “bending the cost curve.” In a very helpful review for Health Affairs, health law professor Tim Jost writes that the House bill contains:
a laundry list of virtually every idea for improving the delivery, enhancing the quality, or controlling the cost of medical care now current. It is like they read through the table of contents of every Health Affairs for the past five years. (See, for example, Bending The Cost Curve, The Crisis In Chronic Disease, and Overhauling The Delivery System.) Accountable care organizations, bundled payments for hospitals and physicians, medical homes, incentives to reduce hospital readmissions, increasing payments for primary care, quality and efficiency incentives for Medicare Advantage plans, comparative effectiveness research, promotion of shared decision-making, gainsharing, reporting on infections acquired in hospitals and ambulatory surgical centers, and more—it is all in there. While some of these programs are funded as demonstration projects, a number of them like accountable care organizations and medical homes are authorized as “pilot programs,” meaning that HHS can extend and expand them if they prove successful.
Health economist Jonathon Gruber, as related by Ronald Brownstein (in a piece reportedly circulated in the West Wing by the president), says the Senate bill also throws the kitchen sink at cost control and delivery reform. It also includes two important measures, not in the House bill, with the potential for even greater cost-curving effect: the Independent Medicare Advisory Board (aka, “Super-MedPAC”) and the excise tax on high-value insurance plans (aka, “Cadillac plans”). For more on these two provisions, see Peter Orszag’s OMB blog on the IMAB (back when it was called IMAC) and Ezra Klein on the excise tax.
I’ll explain why I think it’s a good idea to do coverage reform before cost reform in another post. The point here is that these bills do address the cost problem, and they make a promising start at moving us away from fee-for-service medicine.
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