HealthLawProf Blog

Editor: Katharine Van Tassel
Case Western Reserve University School of Law

Sunday, June 8, 2014

Guest Blogger Professor Erin Fuse Brown: IPAB May Be A Super-Independent Agency, But It Is Constitutional

Faculty headshot Fuse BrownThe Ninth Circuit is scheduled to hear oral argument on June 10 in the Coons v. Lew case (9th Cir., No. 13-15324, formerly Coons v. Geithner) challenging the constitutionality of the Independent Payment Advisory Board (IPAB). The plaintiffs allege that Congress’s creation of IPAB violates the separation of powers doctrine.

The District Court upheld IPAB’s constitutionality, concluding without much explanation that Congress provided a sufficiently intelligible principle to survive a nondelegation challenge. On appeal, the plaintiffs argue that in addition to nondelegation, the court should consider a free-floating separation of powers argument that Congress violated the doctrine when it insulated IPAB from judicial review and made IPAB’s decisions and authority unrepealable. However, courts have not recognized such a free-floating separation of powers claim, and as explained below, IPAB and its proposals are repealable. Because they are challenging the degree of authority and discretion given by Congress to IPAB, the plaintiffs’ claim is at base a nondelegation claim, and the Supreme Court has only struck down a delegation of authority as lacking an intelligible principle on only two occasions, neither of which are even close to being comparable to this case. Congress provided a litany of principles to constrain the discretion of IPAB when it formulates its proposals to contain Medicare costs. Even with a conservative panel, it seems unlikely the Ninth Circuit will stretch the nondelegation doctrine so far beyond its narrow scope to invalidate IPAB on these grounds. The separation of powers challenge to IPAB is likely to fail.

IPAB is constitutional, but it explores the frontier of delegation because it is structured to be exceptionally independent from the various branches of government. If it is ever staffed, IPAB has many hallmarks of an ordinary independent agency, but what make IPAB a super-independent agency are the features that insulate it not only from executive or judicial oversight but also from congressional control. IPAB’s proposals become law and are automatically implemented unless Congress passes its own proposal through a fast-track procedure that achieves the same cost-reduction goals. Congress may not waive this cost-neutrality requirement without a three-fifths supermajority vote of the Senate. In addition, Congress may terminate IPAB and the automatic implementation of its proposals only though joint resolution enacted by a three-fifths majority of both houses no later than August 15, 2017.

The supermajority voting requirements are the reason the plaintiffs (and other critics) call IPAB “unrepealable.” The provision appears at first blush to bind a future legislature’s ability to exercise its authority—a practice known as legislative entrenchment. Nevertheless, as pointed out by the government in its reply, the IPAB supermajority provisions do not actually constitute legislative entrenchment because these requirements themselves remain subject to amendment or repeal by a simple majority. A future Congress could, through ordinary legislation, repeal the entrenching provisions of IPAB and enable itself to override IPAB’s proposals or nullify IPAB itself without a supermajority. Alternatively, because the supermajority requirements and fast track procedures were crafted as procedural rules changes, they can be altered in the same way that any House or Senate rule can be altered by the members of that chamber.

Although the supermajority requirements garnered political attention, more significant are the automatic implementation of IPAB’s proposals and the requirement that any congressional alternative contain at least equal cost-cutting results.  Together, these provisions do more to keep Congress out of the business of addressing Medicare cuts than the supermajority voting rules. The automatic implementation provision changes the default position: if Congress fails to act, a likely scenario made more likely by the cost-neutrality requirement, IPAB’s proposal takes effect. Could Congress amend or repeal IPAB’s automatic implementation or cost-neutrality provisions? Sure, but a future Congress may appreciate being able to deflect blame for unpopular Medicare cuts to IPAB under the political cover provided by these provisions.

IPAB may be an example of an evolution toward increasing delegation by a divided Congress to agencies insulated not only from presidential and judicial control, but also its own legislative interference and dysfunction.  As gridlock increases, we may see further efforts by Congress to create super-independent, expert agencies to deal with intractable and politically thorny issues and for massive government programs like Medicare, Social Security, or the tax code. The common critique of such delegation is that it undermines representative democracy and political accountability. However, super-independent agencies may be desirable to the extent they allow government to work when political gridlock prevents needed action by Congress. In this instance, Congress decided that government by expert commission is better than no governing at all.

- Professor Erin Fuse Brown

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