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Our New Obamacare Masters

Meet the Independent Payment Advisory Board Original Article

The day after the Obama administration’s shellacking at the polls, Peter Orszag, former director of the White House Office of Management and Budget, defended Obamacare from the ramparts of the New York Times. Dubiously asserting that the Patient Protection and Affordable Care Act is a money saver, Orszag extolled the establishment of an arcane new commission to oversee the Medicare budget:

Perhaps most important, the legislation creates an Independent Payment Advisory Board, a panel of independent medical experts who will look for more ways to improve Medicare’s cost-effectiveness. Under the law, any policy that the board issues takes effect unless legislation to block it is passed by Congress and signed by the president. This way, inertia works in favor of cost containment rather than against it.

In other words, the only way to stop the commission’s fiscal “recommendations” from taking effect is for Congress to act. Talk about creating a new level of raw bureaucratic power.

Orszag was actually restrained in describing the depth of the Independent Payment Advisory Board’s statutory authority. At present, Congress is responsible for setting the policies that govern all aspects of Medicare, including payments to health care providers and facilities. That arrangement is inevitably messy because the people have a strong say.

The creators of Obamacare saw the ability of constituents to influence their representatives as a problem. Saying, in effect, “Stop us before we spend again,” Democrats transferred most of Congress and the president’s policy-making authority to the 15 “expert” members of the Independent Payment Advisory Board, appointed by the president and confirmed by the Senate. If this board determines that the growth of Medicare costs will exceed a predetermined target, it has the power to enact a remedy through “fast track” legislation, which works like this:

  • By January 15 each year, the Independent Payment Advisory Board must submit a proposal to Congress and the president for reaching Medicare savings targets in the coming year. The majority leaders in the House and Senate must introduce bills incorporating the board’s proposal the day they receive it.
  • Congress cannot “consider any bill, resolution, amendment, or conference report … that would repeal or otherwise change the recommendations of the board” if such changes fail to meet the board’s budgetary target.
  • By April 1, the committees of jurisdiction must complete their consideration of the proposal. Any committee that fails to meet the deadline is barred from further considering the bill.
  • The secretary of health and human services must implement the Independent Payment Advisory Board’s proposal, as passed by Congress and signed by the president, on August 15 of the year in which the proposal is submitted.
  • If Congress does not pass the proposal or a substitute plan meeting the Independent Payment Advisory Board’s financial target before August 15, or if the president vetoes the proposal passed by Congress, the original Independent Payment Advisory Board recommendations automatically take effect.

Further demonstrating the Star Chamber-like powers of the Independent Payment Advisory Board, Congress cannot consider any bill or amendment that would repeal or change this fast-track congressional consideration process without a three-fifths vote (60) in the Senate. Not only that, but the implementation of the board’s remedy is exempted from administrative or judicial review.

Obamacare defenders claim that the iron fist of the Independent Payment Advisory Board is necessary to ensure cost containment, given Congress’s spinelessness about controlling Medicare costs. They also note that the board does not have a completely free hand. For example, as it pursues its mission of frugality, it is not allowed to recommend health care rationing, changes in Medicare benefits, or revision of eligibility standards.

That is hardly reassuring. Legislators love to abdicate responsibility as a way of protecting their political behinds. If this transfer of limited authority to a faceless board goes down smoothly, what’s to stop Congress from expanding the board’s authority, allowing it to make more substantive changes in Medicare by bureaucratic fiat? Think of all the questions legislators could sidestep at town hall meetings by pointing an accusatory finger at the board!

Nor is there any reason to believe that the Independent Payment Advisory Board’s undemocratic approach to governance would long remain limited to Medicare. If our controversy-averse elected officials ever think they can protect their jobs by delegating their most difficult decisions to unaccountable commissions—as Congress did with regard to setting its own salaries—independent “advisory” boards could proliferate. In this sense, the success of Medicare’s new cost-containment board could portend the construction of an unaccountable bureaucratic state.

When the Founding Fathers wrote the Constitution, they did not envisage governance by “we the experts.” Regardless of where one stands on the wisdom of Obamacare generally, the unaccountable power of the Independent Payment Advisory Board as a mini-government within a government needs to be revoked by the new Congress, and if that proves undoable, its organization and staffing should be defunded.

Wesley J. Smith is a senior fellow at the Discovery Institute’s Center on Human Exceptionalism. 

Wesley J. Smith

Chair and Senior Fellow, Center on Human Exceptionalism
Wesley J. Smith is Chair and Senior Fellow at the Discovery Institute’s Center on Human Exceptionalism. Wesley is a contributor to National Review and is the author of 14 books, in recent years focusing on human dignity, liberty, and equality. Wesley has been recognized as one of America’s premier public intellectuals on bioethics by National Journal and has been honored by the Human Life Foundation as a “Great Defender of Life” for his work against suicide and euthanasia. Wesley’s most recent book is Culture of Death: The Age of “Do Harm” Medicine, a warning about the dangers to patients of the modern bioethics movement.