June 27, 2011

Ixnay on IPAB’s unconstitutionality

By Ixnay on IPAB’s unconstitutionality

Author: Timothy Sandefur

Secretary of Health & Human Services Kathleen Sebelius has published an article on Politico defending the Independent Payment Advisory Board, which we’ve explained here. It’ll probably come as no surprise that Sec. Sebelius is silent about the constitutional problems with IPAB—and the article is typical of today’s political dialogue, in that it carefully selects what “facts” to present in order to present an entirely misleading idea of what’s really going on. Sebeius, for example, describes IPAB as an “advisory board,” when in fact, IPAB is charged with the power to write policies that automatically become law, and which Congress is more or less powerless to restrict. And while Sebelius writes that IPAB’s “work will be transparent, independent and accountable to Congress and the president,” the fact is that something cannot be simultaneously independent and accountable—and IPAB is very much the former and nothing of the latter.

In fact, IPAB is extremely independent—so independent that Congress has no power to alter or redirect its “recommendations” before they become law. Congress can only add further Medicare cuts to those that IPAB recommends. Congress can only abolish IPAB if it passes a joint resolution by 3/5 of all elected members of Congress, which must be introduced between January 3 and February 1 of 2017 and must pass by August 15 of that year. If Congress doesn’t shoot the arrow through the axe-handles in just this way, IPAB becomes a permanent feature of American law, and Congress is deprived of any power to do anything about it. That’s pretty darn “independent”!


But how “accountable” is IPAB? As we’ve seen, Congress has no meaningful power to change IPAB’s “recommendations” before they become law. But the same is also true of the President. Under another section of the law, if IPAB fails to come up with “recommendations” for cutting Medicare, the Secretary of Health and Human Services is required to come up with her own “recommendations”—which must comply with the same standards as those that apply to IPAB. In other words, the Secretary just has to do what IPAB was going to do. And the President must then present them to Congress without any alteration or other recommendation. This, too, is unconstitutional, as we argue in our amicus brief in Coons v. Geithner, because the Constitution gives the President power to recommend whatever laws he thinks are a good idea—and Congress has no constitutional power to limit the President’s recommendation authority.

In fact, President Obama himself said as much when he signed a bill last March; he objected to a bill because “[s]everal provisions…effectively purport to require me and other executive officers to submit budget requests to the Congress in particular forms. Because the Constitution gives the President the discretion to recommend only ‘such Measures as he shall judge necessary and expedient’ the specified officers and I shall treat these directions as precatory.” Yet the statute that creates IPAB imposes the same kind of requirements! So much for Presidential oversight.

Sec. Sebelius is correct that IPAB is “expressly prohibited from making recommendations that ration care,” but IPAB isn’t in charge of care in the first place; it’s in charge of funding—and with the narrow exceptions provided in the law, it enjoys totally unreviewable and unaccountable power to make “recommendations” of any sort that have anything to do with Medicare. That’s why Timothy Jost, one of the Administration’s keenest supporters on this issue, has confessed that IPAB could end up setting the prices for medical care in the private market—thereby squeezing out what few choices remain in the free market for health care services: “There is no reason to believe that Congress is ready to adopt price controls in the private sector,” writes Jost, “and thus the gap between Medicare and private payment is likely to continue to be an issue. At some point, however, the gap may become unacceptable, which may require Congress to take the private sector recommendations of the IPAB more seriously. If this leads to all-payer rate setting, this may be the most revolutionary contribution of the IPAB concept. If the IPAB plays a role in all-payer rate setting, it will truly have become the Platonic Guardian of our health care system.”

And if IPAB’s just a responsible advisory institution, as Sebelius claims, that leaves a number of questions unanswered. As the Republican Policy Committee writes,

Why did the statute not require IPAB to take comments from the public before making its recommendations? Just last month the Administration proposed requiring state Medicaid programs to obtain public comments before reducing provider reimbursement levels. Why is the Obama Administration imposing public comment requirements on state Medicaid programs, but not imposing a similar requirement on its controversial IPAB? Why is the IPAB exempt from administrative and judicial review? If no patients will be harmed by IPAB’s recommendations, then why are Medicare beneficiaries prohibited from taking legal action against it?

When it comes to these and other questions, the Administration’s position seems to be “ignore the Constitution and hope it goes away.”

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