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House moving to kill key provision in 'Obamacare'

Updated at 4:05pm ET  In one week, the Supreme Court will hear oral arguments surrounding the key provision of the 2010 health care law – the individual mandate.

But outside of the courts, efforts in Congress to tinker with the complex and controversial law continue, including a vote this week  to abolish a central piece of the 2010 health care law: the Independent Payment Advisory Board.

Related: House GOP fights to notch signature wins

The intent of the board was to try and take the politics out of Medicare by giving some of its spending decisions to independent experts.  The controversy around the panel’s very existence, however, shows just how difficult that goal will ever be to achieve.

The board fulfills a promise President Barack Obama made in his 2009 health care speech to a joint session of Congress: “We will also create an independent commission of doctors and medical experts charged with identifying more waste in the years ahead.”

IPAB supporters say that setting up a non-politicized cost-cutting process is necessary in order to control the growth in Medicare costs, with IPAB as a backstop if other cost-limiting parts of the law do not work.

IPAB would be akin to the idea of the Base Realignment and Closure Commission. Past BRAC panels have been successful in eradicating redundant military bases.

Mandel Ngan / AFP - Getty Images

West Virginia Democratic Sen. Jay Rockefeller said in 2009 that the Independent Payment Advisory Board is "a large idea with large consequences for the future."

“This is a game-changer,” said the father of IPAB, Sen. Jay Rockefeller, D-W.Va., in 2009 when he and other Democrats were drafting the law in the Senate Finance Committee. IPAB is “a large idea with large consequences for the future.”

This week’s vote, coming as early as Wednesday, will be an election-year propaganda event, allowing House Republicans to tell conservatives in their districts, “We killed part of Obamacare.”

The White House issued a veto threat Tuesday, in a Statement of Administration Policy, which said the bill "would repeal and dismantle the IPAB even before it has a chance to work. The bill would eliminate an important safeguard that, under current law, will help reduce the rate of Medicare cost growth responsibly while protecting Medicare beneficiaries and the traditional program."

From the start, Obama’s opponents started calling IPAB a “death panel” which would deny older people treatment they needed -- even though the law states that the board can’t ration care, restrict benefits, increase the premiums Medicare recipients must pay, or alter the eligibility for Medicare (which is open to most Americans aged 65 and older).

What’s important in this battle is not the all-too-familiar “death panel” rhetoric, but the 19 House Democrats who cosponsored the bill to abolish IPAB -- 15 of whom voted for the Affordable Care Act in 2010.

One of those Democrats, Rep. Allyson Schwartz of Pennsylvania, said, “The promise of health care coverage to our seniors must not be broken. Abdicating this responsibility, whether it is to insurance companies or to an unelected commission, undermines our ability to represent the needs of our seniors and disabled individuals. IPAB is the wrong approach to the right goal.”

Another Democrat who voted for the 2010 health care overhaul but voted last month in a House committee to abolish IPAB, Rep. Frank Pallone of New Jersey, said “IPAB, like other independent commissions, encroaches upon legislative authority ... It's not the job of an independent commission to make decisions on health care policy for Medicare beneficiaries.”

But it’s congressional involvement that is exactly the problem, say Rockefeller and other IPAB supporters.

When Congress tries to control Medicare spending, Rockefeller complained in 2009, there are “too many lobbyists involved and it's very, very difficult if you have a lobbyist that comes in … who represents an industry in your state which could gain an enormous advantage by having an increase in the reimbursement rates for Medicare , for oxygen or for something else.”

Rather than members of Congress deciding what Medicare will pay for, Rockefeller said, “These are decisions that should be made by professionals, people who are public policy professionals. They're not lobbyists. And they're not necessarily sitting with congressmen or senators.”

Uwe Reinhardt, a health care economist at Princeton University and an IPAB supporter, said Congress “micro-manages in the most amazing way” in deciding how Medicare operates.

And yet, he said, members of Congress are “beset by incredible conflicts of interest. With Congress, you really always have to worry: Whom do they represent: the people, or particular interest groups that give them money?” Companies that sell services to Medicare also contribute to congressional campaigns, he noted.

IPAB will be composed of 15 experts, yet to be appointed by Obama, who’ll be given the task of keeping per-capita growth in Medicare spending from exceeding a target: national income growth rate, plus 1 percent.

IPAB’s recommendations must be carried out by the secretary of the Department of Health and Human Services unless Congress acts to block them, by a two-thirds vote in each chamber, or passes its own bill which achieves the same cost reductions as the IPAB recommendations. Under Rockefeller’s original proposal, Congress wouldn't have voted on IPAB decisions at all.

The law says IPAB can’t ration care or restrict benefits, so what could IPAB do to curb spending?

It could change how Medicare pays hospitals and doctors “in ways that would encourage more efficient delivery of care,” said Paul Van de Water, a health care analyst at the Center for Budget and Policy Priorities, a think tank that strongly supports IPAB. Medicare could reallocate its payments from medical specialists that get relatively higher reimbursements to specialists that get relatively smaller payments, or could pay primary care doctors more and specialty doctors less than it currently does, Reinhart said.

The fate of IPAB won’t be settled this week and will need to wait at least until the Supreme Court renders its judgment on the 2010 health care law -- and probably until after the November elections.

The vote this week is being muddled by House Republican leaders’ decision to tack on a separate provision putting a limit on damages awarded in medical malpractice cases. Almost all Democrats are likely to oppose that idea, and thus, the larger anti-IPAB bill.

But some Democrats still want to put their opposition on IPAB on the record. Schwartz said GOP leaders ought to bring a clean abolish-IPAB bill to a floor vote and forget about their attempts to limit malpractice awards.