Protecting Medicare In New Jersey

By Lori A. Heberley LPC, CMC

The future of Medicare isn’t just a theoretical problem for New Jersey – it’s a matter of life and death.

Our state is home to nearly 2.5 million seniors, representing 13 percent of our population. Many seniors don’t have private insurance, and Medicare serves as their only source of health coverage. Indeed, fully 14 percent of New Jersey’s elderly are in poverty.


Even small degradations in Medicare services could seriously compromise the care of state seniors. And that’s why we should all be worried about the Independent Payment Advisory Board (IPAB) – a new federal panel established by the healthcare reform law aimed at bringing down Medicare costs.

Now, IPAB’s mission is sound: Medicare expenses are out of control and threaten the long-term financial health of this country. Here in New Jersey, the program costs roughly $8,500 per enrollee per year, with total program expenses jumping 5.6 percent annually. Both those figures are well above the national average.

But IPAB goes about cost-cutting the wrong way. The Board will be made up of 15 members appointed by the president. Starting in 2014, if total Medicare expenses exceed preset annual spending targets, IPAB is empowered to make cost-cutting recommendations

Technically, there are checks on IPAB’s powers. If Congress doesn’t like IPAB’s recommendations, it can either pass an alternative package of cuts that achieve the same spending target, or reject the recommendations entirely via a three-fifths super-majority in the Senate.

But our country’s political realities are such that both those possibilities are unlikely. It’s now nearly impossible to get members of Congress to even agree on a basic budget — imagine how much harder it will for them to pass huge Medicare cuts. And even if Congress decides to override IPAB, the President can still veto Congress’ move.

Worse still, unlike similar healthcare boards in the past, the Secretary of Health and Human Services can’t stop IPAB’s recommendations from taking effect if they’re determined to be damaging. Patients and doctors have zero administrative recourse to challenge the Board’s decisions.

So, at the end of the day, IPAB is effectively unaccountable to voters. And average Americans will have zero say in the Board’s policy decisions.

The particular cost-cutting tools afforded IPAB are also dangerous. The panel is prohibited from rationing care, raising premiums, adjusting benefits, or tightening eligibility criteria. However, IPAB can control Medicare spending by cutting reimbursements to some Medicare providers, like doctors.

These kinds of cuts have already been tried in Medicaid. Indeed, depending on the state, the program pays 20 percent to 25 percent below market prices for medical services. In some parts of the country, it actually costs doctors money to care for Medicaid patients. The result? Physicians have simply stopped accepting new Medicaid enrollees or exited the program entirely.

Patients have been left with fewer doctors and compromised care. A 2008 study from the Medicare Payment Advisory Commission found that nearly a third of Medicare enrollees have had problems finding a primary care doctor. And other research from 2008 from the Center for Studying Health System Change showed that 35 percent of general practitioners are no longer accepting new Medicaid patients.

Medicare beneficiaries will suffer from the exact same shortage of doctors if IPAB starts slashing doctors’ reimbursement rates.

As a licensed geriatric care manager, I’ve worked with senior patients for over 15 years all across New Jersey, including right here in Burlington.

In my time, I’ve learned that elderly patients have particularly complex and challenging healthcare needs. It’s crucial that they and their caregivers have easy access to the right medical specialists.

If IPAB starts slashing Medicare reimbursements and driving out doctors, senior patients could have to wait even longer to get treatment, during which time their conditions will undoubtedly deteriorate.

Our state representatives need to push to reform IPAB. The body was borne from a good idea — control Medicare spending. But right now, IPAB has the wrong tools at its disposable and doesn’t have to answer to voters at all. Those two ingredients combined will lead to worse care for seniors — both here in New Jersey and across the country.

Lori A. Heberley is the president of South Jersey Geriatric Care, P.C. based in Haddonfield

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