This Week – March 23, 2012

This Week in Washington DC:

  1. House votes to Repeal IPAB
  2. Supreme Court Readies for Health Reform Law Oral Arguments

House Passes Repeal of IPAB Along with Medical Malpractice Reform
On Thursday, March 22nd, the House of Representatives passed legislation that abolishes an appointed board responsible for slowing Medicare spending growth. The Independent Payment Advisory Board (IPAB) was created by the health reform law and is tasked with making cost-cutting recommendations if Medicare spending exceeds targeted growth rates. However, the IPAB is prohibited from making recommendations related to Medicare beneficiary coverage or cost-sharing as well as recommendations related to hospital payments before 2018. These legislative restrictions unfortunately leave physician reimbursement in the IPAB’s cross-hairs as the only means to substantially slow Medicare spending.

The vote was 223-181 and along party lines, with Democrats voting against the measure – even Democrats who oppose the IPAB – due to the House Republican Leadership’s decision to merge the repeal of IPAB with a bill restricting medical malpractice lawsuits. Democrats objected to the $250,000 cap on noneconomic damages as well as the infringement of states’ rights as medical malpractice and tort law fall under the jurisdiction of the state court systems. House Republicans have long advocated for the medical malpractice reform and decided to merge the issues into one bill as repealing the IPAB is estimated to increase federal spending by $3 billion over ten years. However, the Congressional Budget Office (CBO) concludes that reforming medical malpractice lawsuits reduce federal health care expenditures. Thus, the CBO estimate of this combined bill saves the federal government $45.5 billion over ten years due to a reduction in estimated spending in the Medicaid, Medicare, and federal employee health insurance programs. The bill is largely symbolic as the Senate is not expected to take up this legislation. President Obama also issued a veto threat in the unlikely scenario of the Senate Democratic Leadership bringing the legislation to the floor and then the full Senate passing the bill.

ACG supports this combined version and appreciates the House passing legislation that repeals a board whose de facto option to reduce Medicare costs is by cutting provider payments. This legislation also seeks to curb meritless medical malpractice lawsuits in addition to offsetting the costs for the IPAB repeal. ACG Governors and the ACG National Affairs Committee advocated for repeal of the IPAB as well as medical malpractice reform while visiting Capitol Hill in April and October 2011 respectively. ACG is thankful for those members who took time out of their busy practices to join ACG colleagues on Capitol Hill to educate members of Congress and staff.  Your efforts proved successful in helping get these measures passed in the House.

ACG will continue advocating for these legislative measures impacting clinical GI and will update membership as developments occur.

Supreme Court Preparing for Health Reform Law Oral Arguments
On Monday, March 26th, the Supreme Court will begin hearing oral arguments on whether two provisions contained in the Patient Protection and Affordable Care Act (now known as the “ACA”) are unconstitutional. In an ironic twist of fate, the ACA celebrates its two year anniversary this week as the bill was signed into law on March 23, 2010.

The central issue is whether the federal government can use its power under the Commerce Clause to require individuals to purchase health insurance or face a penalty. The court will also determine whether the law’s expansion of Medicaid, and the requirement that states help pay for this expansion, is constitutional. Since the law did not include a “severability clause” allowing other parts of the law to remain intact should any provision be found unconstitutional, the court must decide whether the entire law must also be struck down.

As background, the Supreme Court has previously held that Congress has the power to regulate interstate commerce as well as local activities having a substantial impact on interstate commerce under the Commerce Clause of U.S. Constitution. Also, the Anti-Injunction Act of 1867 bars consideration of tax suits until the tax is actually levied. Since the penalty for not purchasing health insurance would not be enforced until after 2014, the court will also hear arguments on whether it is premature to consider the challenge at this time. This was the holding of the 4th Circuit Court of Appeals in Virginia. Two other federal appellate courts (D.C. and 6th Circuit in OH) have upheld the constitutionality of the individual mandate under the Commerce Clause. However, it is important to note that the Supreme Court agreed to hear the case out of Florida, with 25 other states joining, which found the individual mandate unconstitutional. The 11th Circuit Appellate Court in Atlanta upheld this ruling in August 2011 but also held that the law should remain intact (including the Medicaid expansion provision). Some health care policy and constitutional law experts expect that the Supreme Court will uphold the law even if the individual mandate and Medicaid expansion are both found unconstitutional. However, other legal experts remain unsure on how the Supreme Court will rule.

ACG will monitor these oral arguments next week and will continue to update membership in future notifications.

Please stay tuned for further updates. Please also share and discuss your thoughts with fellow ACG members on the ACG GI Circle. To login and share your comments, go to and sign in as a member. Once you have done so, click here and then click the orange "Visit ACG GI Circle" button to be taken to the GI Circle site. If you have not yet activated your ACG GI Circle account, please email us at

Contact Brad Conway, VP Public Policy, with any questions or for more information.

Brad Conway