	Introduction

The Patient Protection and Affordable Care Act (PPACA, P.L. 111-148 , as amended) created the Independent Payment Advisory Board (IPAB, or the Board) to "reduce the per capita rate of growth in Medicare spending." The Board's proposals will be implemented by the Secretary of Health and Human Services (the Secretary) unless Congress acts either by formulating its own proposal to achieve the same savings or by discontinuing the automatic implementation process defined in the statute. Again, the legislation's stated goal of the Board is to reduce the per capita growth in Medicare expenditures, not to reduce overall Medicare expenditures. Therefore, while the Congressional Budget Office (CBO) projects that the cumulative impact of the Board's recommendations from 2015 through 2019 will reduce total spending by $15.5 billion, during the same period total Medicare expenditures are projected to be $3.9 trillion with average spending per beneficiary increasing from $13,374 in 2015 to $15,749 in 2019. If the Chief Actuary determines that projected five-year per capita growth rate in Medicare expenditures two years hence exceeds the projected per capita target growth rate, the Chief Actuary needs to establish an applicable savings target—the amount by which the Board must reduce future spending. The Chief Actuary is required to calculate
the Medicare per capita growth rate (the "growth rate"), and the Medicare per capita target growth rate (the "target growth rate"). The IPAB Medicare Proposal Process

If the Chief Actuary makes a determination by April 30 of the DY that the growth rate for an IY is forecast to exceed the target growth rate for that year, the Board is to develop a detailed proposal to reduce the growth rate by the applicable savings target . By March 1 of each PY, the Secretary submits comments to Congress on Board proposals. Scope of Proposals

PPACA directs the Board that its proposal
relate only to the Medicare program; result in a net reduction in total Medicare program expenditures in the IY that are at least equal to the applicable savings target established by the Chief Actuary; not include any recommendation to ration care, raise revenues or Medicare beneficiary premiums, increase cost-sharing, restrict benefits, or alter eligibility; not reduce payments to providers or suppliers scheduled to receive a reduction in payment as the result of productivity adjustments under Section 3401 (see Appendix C ); include, as appropriate, recommendations to reduce Medicare payments under parts C and D, such as reductions in direct subsidy payments to Medicare Advantage and prescription drug plans that are related to administrative expenses (including profits) for basic coverage, denying high bids or removing high bids for prescription drug coverage from the calculation of the national average monthly bid amount and reductions in payments to Medicare Advantage plans that are related to administrative expenses (including profits) and performance bonuses for Medicare Advantage plans; and include recommendations with respect to administrative funding for the Secretary to carry out the Board's recommendations. Other Board-Related Activities

While the Board's principal function is to develop proposals that reduce per capita growth in Medicare spending, this is not its sole activity. "Fast Track" Procedures for Congressional Consideration

The Secretary must implement the Board's proposals unless Congress affirmatively acts to amend or block them within a stated period of time and under circumstances specified in the act. To begin, Section 3403(d) of the act establishes special "fast track" parliamentary procedures governing House and Senate committee consideration, and Senate floor consideration, of legislation implementing the Board or Secretary's proposal. These procedures differ from the parliamentary mechanisms the chambers usually use to consider most legislation, and are designed to ensure that Congress can act promptly on the implementing legislation should it choose to do so. 111-148 establishes a second "fast track" parliamentary mechanism for consideration of legislation discontinuing the automatic implementation process for the recommendations of the Independent Payment Advisory Board described above. The President's FY2013 Budget

The President's FY2013 budget, as submitted to Congress on February 13, 2012, includes a proposal to strengthen the IPAB. 452 , the Medicare Decisions Accountability Act of 2011, introduced on January 26, 2011, would repeal the Independent Payment Advisory Board. 452 was combined with the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 ( H.R. On March 22, 2012, the House passed the combined version of H.R. 5 .
In response, in part, to overall growth in Medicare program expenditures and growth in expenditures per Medicare beneficiary, the Patient Protection and Affordable Care Act (PPACA, P.L. 111-148, as amended) created the Independent Payment Advisory Board (IPAB, or the Board) and charged the Board with developing proposals to "reduce the per capita rate of growth in Medicare spending." The Secretary of Health and Human Services (the Secretary) is directed to implement the Board's proposals automatically unless Congress affirmatively acts to alter the Board's proposals or to discontinue the automatic implementation of such proposals.
The annual IPAB sequence of events begins each year, starting April 30, 2013, with the Chief Actuary of the Centers for Medicare & Medicaid Services calculating a Medicare per capita growth rate and a Medicare per capita target growth rate. If the Chief Actuary determines that the Medicare per capita growth rate exceeds the Medicare per capita target growth rate, the Chief Actuary would establish an applicable savings target—the amount by which the Board must reduce future spending. This determination by the Chief Actuary also triggers a requirement that the Board prepare a proposal to reduce the growth in the Medicare per capita growth rate by the applicable savings target. The Board cannot ration care, raise premiums, increase cost sharing, or otherwise restrict benefits or modify eligibility. In generating its proposals, the Board is directed to consider, among other things, Medicare solvency, quality and access to care, the effects of changes in payments to providers, and those dually eligible for Medicare and Medicaid. If the Board fails to act, the Secretary is directed to prepare a proposal.
Board proposals must be submitted to the Secretary by September 1 of each year and to the President and Congress by January 15 of the following year. Board proposals are "fast-tracked" in Congress, and IPAB proposals go into force automatically unless Congress affirmatively acts to amend or block them within a stated period of time and under circumstances specified in the act. Section 3403(d) of the act establishes special "fast track" parliamentary procedures governing House and Senate committee consideration, and Senate floor consideration, of legislation implementing the Board or Secretary's proposal. These procedures differ from the parliamentary mechanisms the chambers usually use to consider most legislation and are designed to ensure that Congress can act promptly on the implementing legislation should it choose to do so. PPACA also established a second "fast track" parliamentary mechanism for consideration of legislation discontinuing the automatic implementation process for the recommendations of the Board.
The Board's charge is to develop proposals for the Secretary to implement that reduce the per capita growth in Medicare expenditures, not to reduce Medicare expenditures. Therefore, while the CBO projects that the cumulative impact of the Board's recommendations from 2015 through 2019 will reduce total spending by $15.5 billion, during the same period, Medicare expenditures will total $3.9 trillion with average spending per beneficiary forecast to increase from $13,374 to $15,749. While the Board's potential impact on total expenditures is likely to be relatively small compared to overall Medicare expenditures, its impact on particular Medicare providers or suppliers may be significant, particularly if the Board alters payment mechanisms.
The President's FY2013 budget, as submitted to Congress on February 13, 2012, includes a proposal to strengthen the IPAB. On March 22, 2012, the House passed a combined version of the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 (H.R. 5) that contained provisions from H.R. 452, the Medicare Decisions Accountability Act of 2011, which would repeal the IPAB.