Vast powers of new Obamacare agency
No doubt you've already heard of the new Independent Payment Advisory Board - Sarah Palin's "Death Panel." The sweeping, unaccountable powers of this agency threaten widespread rationing of Medicare dollars. Thankfully, due to incompetence and the administration being busy with other Obamacare chores, the 15 experts that will sit on the IPAB board haven't even been nominated yet, so we are spared their tender ministrations for the time being.
But you've probably never heard of Center for Medicare and Medicaid Innovation - a wicked stepchild of Obamacare - that will have broad, sweeping powers to change Medicare without congressional approval.
The Center for Medicare and Medicaid Innovation has flown below the political radar. That's due to its seemingly innocuous mission: promoting new and more efficient "payment systems" and "models of care." But this agency is just as dangerous as IPAB. It is a bureaucracy within the massive Department of Health and Human Services superstructure and therefore run by the president's political appointees. But unlike most of the federal bureaucracy, the agency never has to go back to Congress to get an appropriation. ObamaCare provided it with $10 billion, upfront, to cover its costs for a full 10 years.
At the end of that first decade, and every decade thereafter, the agency will get another $10 billion appropriation. This massive infusion of funding has allowed the Center for Medicare and Medicaid Innovation to grow from 68 employees in 2012 to a planned 440 full-time workers in 2015. About 10% of the agency's funding is going to personnel and administrative expenses.
Permanent, recurring appropriations are sometimes provided to federal agencies fighting fraud and abuse. But Congress generally requires other agencies to request a new appropriation every year. It's one important check against bureaucratic abuse of power. And it's a check that this agency will never have to go through.
The statute also gives the Center wide-ranging authority to alter the Medicare and Medicaid programs without further congressional action. It is supposed to be testing new ways to pay providers of medical services. Changes that are found through pilot programs to reduce costs without harming quality, or found to be budget neutral while improving quality, can be implemented nationwide through regulatory fiat.
A billion dollars over 10 years for staffing this agency. All those people have to be given something to do. Just what is it they're planning?
The agency's broad mandate reveals the mind-set of ObamaCare's authors. The premise is that the federal government is best positioned to lead an effort in innovation in medical delivery, despite all evidence to the contrary. The history of Medicare's payment systems over four decades is one of politicized decision-making by regulators, protection of incumbent providers, and roadblocks to new medical technologies and new ways of doing business, such as using information technology to consult with patients, or employing non-physician clinics for routine patient care. It's the opposite of an environment conducive to innovation. Consequently, inefficiency is rampant in Medicare's traditional fee-for-service program.
Rather than build on this progress, ObamaCare cuts payments to Medicare Advantage plans by more than $150 billion over a decade—and relies instead on the Center for Medicare and Medicaid Innovation to prop-up the more costly fee-for-service program with government-led innovation. What's likely to transpire isn't innovation but price controls on medical procedures to give fee-for-service a chance to compete against more efficient Medicare Advantage plans. The agency's authority is broad enough to allow across-the-board cuts in payments to hospitals and physicians, and lower reimbursements for pharmaceuticals and related products as well, all in the name of innovation.
Once again, we see that Obamacare is not about improving quality or access, but rather control. The Medicare Advantage plans had to go because the government didn't control them - even if they were working well and consumers were happy with them. What we're likely to get with the CMMI is slash and burn management of Medicare - with the IPAB doling out services to all those "deserving" of treatment.