Frequently Searched

GOP hearings shine spotlight on lawsuit to stop Medicare board

November 18, 2014

The Republican hearings this week on a cost-control panel for Medicare are drawing attention to a legal challenge that has been filed against it.

Diane Cohen, the lead attorney for plaintiffs challenging the Medicare board, is scheduled to testify Wednesday before the Energy and Commerce Committee.

Cohen will argue that Congress gave up too much of its power when it approved the creation of the 15-member Independent Payment Advisory Board (IPAB) in the healthcare reform law. Critics of the panel hope the argument will resonate with Democrats on the committee.

“Certainly we’re concerned that lawmakers don’t realize what they’ve done in terms of the delegation, and we’ll certainly keep pushing on and educate anyone who wants to listen,” Cohen told The Hill.

Republicans say the Medicare panel amounts to a “rationing board.” The House Budget Committee will also examine IPAB on Tuesday in a separate hearing.

The number of House Democrats who support Republican legislation to repeal the board now stands at eight, after Del. Donna Christensen (Virgin Islands) endorsed it Monday. And Republicans are hopeful that Rep. Frank Pallone Jr. (N.J.), the top Democrat on the Energy and Commerce Health panel, might sign on as well, after he told Politico that he “never supported it and … would certainly be in favor of abolishing it.”

The lawsuit against IPAB was filed in August 2010 by the libertarian Goldwater Institute and is currently in Arizona district court. The federal government wants the case dismissed, arguing that the IPAB provision gives lawmakers leeway in how to achieve the Medicare cost-saving goals identified by the board.

The complaint argues that plaintiff Eric Novack, a Glendale pediatrician, has standing because he sees Medicare patients and would suffer economic injury from recommendations to cut reimbursement rates without having the ability to ask his representatives for redress. The lawsuit claims that the provision violates the Separation of Powers doctrine.

“We believe the creation of the IPAB is the most sweeping delegation of congressional authority in history,” Cohen said. “It’s a delegation of authority to an independent agency; now, ‘independent,’ I would say, in the worst sense of the word — independent of Congress, independent of the president and independent of the will of the American people.”

Specifically, the complaint argues that the provision leaves no place for meaningful oversight from Congress, prohibits administrative and judicial review and is otherwise “unprecedented.”

The federal government counters that Novack has no standing because any cuts are purely hypothetical. The board would only recommend payment cuts, which Congress could replace with equivalent savings elsewhere, if Medicare spending exceeds a certain target.

“Contrary to plaintiffs’ claim,” the government’s motion says, “the IPAB is not ‘imminently likely’ to affect Dr. Novack’s Medicare payments. To the contrary: The Board does not even exist yet.

“Even if, years from now, the Board issues a proposal that would reduce payments to orthopedic surgeons, such a proposal would be subject to Congress enacting superseding legislation under the fast track procedures established by the [healthcare reform law],” the motion adds. “These possibilities render the claim of future injury here ‘remote’ and ‘hypothetical’.”

The complaint argues that the IPAB is “entrenched from repeal” because the law requires Congress to enact a joint resolution during a very specific timeframe in 2017 in order to repeal the board. But the government says that’s a misreading of the law.

“Nothing prevents Congress from repealing the Board via ordinary legislation,” the motion to repeal reads. “Plaintiffs’ unchallenged (albeit unsuccessful) … votes to repeal the (healthcare reform law) in its entirety, which necessarily included a repeal of the IPAB, establish this point conclusively.”

Republican lawmakers agree with the government on that point, as evidenced by their introduction of legislation to repeal the provision.

“Congressman Roe believes it’s a repealable provision; otherwise he wouldn’t have introduced legislation to repeal it,” said a spokeswoman for bill sponsor Phil Roe (R-Tenn.), the chairman of the Education and the Workforce Health subcommittee.

Still, Republicans acknowledge that their best chance to kill the board is now, before it goes into effect. The president can start making appointments to the board on Oct. 1, after funding is appropriated for fiscal 2012, with the first recommendations scheduled to take effect in 2015.



More on this issue

Donate Now

Help all Americans live freer, happier lives. Join the Goldwater Institute as we defend and strengthen freedom in all 50 states.

Donate Now

Since 1988, the Goldwater Institute has been in the liberty business — defending and promoting freedom, and achieving more than 400 victories in all 50 states. Donate today to help support our mission.

We Protect Your Rights

Our attorneys defend individual rights and protect those who cannot protect themselves.

Need Help? Submit a case.

Get Connected to Goldwater

Sign up for the latest news, event updates, and more.