An ObamaCare Board Answerable to No One
Signs of ObamaCare's failings mount daily, including soaring insurance costs, looming provider shortages and inadequate insurance exchanges. Yet the law's most disturbing feature may be the Independent Payment Advisory Board. The IPAB, sometimes called a "death panel," threatens both the Medicare program and the Constitution's separation of powers. At a time when many Americans have been unsettled by abuses at the Internal Revenue Service and Justice Department, the introduction of a powerful and largely unaccountable board into health care merits special scrutiny.
For a vivid illustration of the extent to which life-and-death medical decisions have already been usurped by government bureaucrats, consider the recent refusal by Health and Human Services Secretary Kathleen Sebelius to waive the rules barring access by 10-year old Sarah Murnaghan to the adult lung-transplant list. A judge ultimately intervened and Sarah received a lifesaving transplant June 12. But the grip of the bureaucracy will clamp much harder once the Independent Payment Advisory Board gets going in the next two years.
The board, which will control more than a half-trillion dollars of federal spending annually, is directed to "develop detailed and specific proposals related to the Medicare program," including proposals cutting Medicare spending below a statutorily prescribed level. In addition, the board is encouraged to make rules "related to" Medicare.
The ObamaCare law also stipulates that there "shall be no administrative or judicial review" of the board's decisions. Its members will be nearly untouchable, too. They will be presidentially nominated and Senate-confirmed, but after that they can only be fired for "neglect of duty or malfeasance in office."
Once the board acts, its decisions can be overruled only by Congress, and only through unprecedented and constitutionally dubious legislative procedures—featuring restricted debate, short deadlines for actions by congressional committees and other steps of the process, and supermajoritarian voting requirements. The law allows Congress to kill the otherwise inextirpable board only by a three-fifths supermajority, and only by a vote that takes place in 2017 between Jan. 1 and Aug. 15. If the board fails to implement cuts, all of its powers are to be exercised by HHS Secretary Sebelius or her successor.
The IPAB's godlike powers are not accidental. Its goal, conspicuously proclaimed by the Obama administration, is to control Medicare spending in ways that are insulated from the political process.
This wholesale transfer of power is at odds with the Constitution's separation-of-powers architecture that protects individual liberty by preventing an undue aggregation of government power in a single entity. Instead, power is diffused both vertically—with the federal government exercising limited and enumerated powers and the states exercising all remaining authority—and horizontally, with the powers of the federal government divided among the executive, legislative and judicial branches.
This diffusion of power advances another key liberty-enhancing constitutional requirement: accountability. Accountability enables the people to know what government entity is affecting them, so that they can hold officials responsible at the polls. Congress can also hold the executive responsible through oversight and measures like impeachment.
As Chief Justice John Marshall observed in Wayman v. Southard (1825), Congress may delegate tasks to other bodies, but there is a fundamental constitutional difference between letting them "fill up the details" of a statute versus deciding "important subjects," which "must be entirely regulated by the legislature itself." Distinguishing between the two, the court said, requires an inquiry into the extent of the power given to the administrative body.
The power given by Congress to the Independent Payment Advisory Board is breathtaking. Congress has willingly abandoned its power to make tough spending decisions (how and where to cut) to an unaccountable board that neither the legislative branch nor the president can control. The law has also entrenched the board's decisions to an unprecedented degree.
In Mistretta v. United States (1989), the Supreme Court emphasized that, in seeking assistance to fill in details not spelled out in the law, Congress must lay down an "intelligible principle" that "confine[s] the discretion of the authorities to whom Congress has delegated power." The "intelligible principle" test ensures accountability by demanding that Congress take responsibility for fundamental policy decisions.
The IPAB is guided by no such intelligible principle. ObamaCare mandates that the board impose deep Medicare cuts, while simultaneously forbidding it to ration care. Reducing payments to doctors, hospitals and other health-care providers may cause them to limit or stop accepting Medicare patients, or even to close shop.
These actions will limit seniors' access to care, causing them to wait longer or forego care—the essence of rationing. ObamaCare's commands to the board are thus inherently contradictory and, consequently, unintelligible.
Moreover, authorizing the advisory board to make rules "relating to" Medicare gives the board virtually limitless power of the kind hitherto exercised by Congress. For instance, the board could decide to make cuts beyond the statutory target. It could mandate that providers expand benefits without additional payment. It could require that insurers or gynecologists make abortion services available to all their patients as a condition of doing business with Medicare, or that drug companies set aside a certain percentage of Medicare-related revenues to fund "prescription drug affordability." There is no limit.
If the Independent Payment Advisory Board exercises these vast powers, political accountability will vanish. When constituents angrily protest, Congress, having ceded its core legislative power to another body, will likely just throw up its hands and blame the board.
Since ObamaCare eliminates both judicial review for any of the board's decisions and public-participation requirements for rule making, this unprecedented insulation of the board guts due process. Even the president's limited ability to check the board's power—since he can remove members only for neglect or malfeasance—represents a more circumscribed standard than usual for presidential appointees.
The bottom line is that the Independent Payment Advisory Board isn't a typical executive agency. It's a new beast that exercises both executive and legislative power but can't be controlled by either branch. Seniors and providers hit hardest by the board's decisions will have nowhere to turn for relief—not Congress, not the president, not the courts.
Attempts to rein in government spending are laudable, but basic decisions about how and where to cut spending properly belong to Congress. In the 225 years of constitutional history, there has been no government entity that violated the separation-of-powers principle like the Independent Payment Advisory Board does.
While the board is profoundly unconstitutional, it is designed to operate in a way that makes it difficult to find private parties with standing to challenge it for at least its first several years in operation. An immediate legal challenge by Congress might be possible, but also faces standing difficulties. Unless and until courts rule on IPAB's constitutionality, Congress should act quickly to repeal this particular portion of ObamaCare or defund its operations.
Mr. Rivkin, a partner at Baker Hostetler LLP, served in the Justice Department under Presidents Reagan and George H.W. Bush and represented 26 states in challenging ObamaCare. Ms. Foley is a professor of constitutional law at Florida International University and the author of "The Law of Life & Death" (Harvard, 2011).
A version of this article appeared June 20, 2013, on page A21 in the U.S. edition of The Wall Street Journal, with the headline: An ObamaCare Board Answerable to No One.