Pitts Kicks Off 113th Congress with Hearing on Reforming the Medicare Physician Payment System

WASHINGTON, DC – The Health Subcommittee, chaired by Rep. Joe Pitts (R-PA), today kicked off the 113th Congress with a hearing focused on the Medicare physician payment system. Last week, the Energy and Commerce Committee, along with the Ways and Means Committee, released a framework for reforming the current system. As part of the committee’s commitment to gather input from stakeholders, the subcommittee heard from a range of witnesses today who reviewed the current Sustainable Growth Rate and suggested potential solutions for replacing the outdated formula to end uncertainty among physicians and protect seniors’ access to care.

“This subcommittee has had previous hearings that have addressed the shortcomings of SGR, including the repeated threats to patient access to care and provider income, and the mounting costs of Congressional actions to override the scheduled fee cuts,” said Pitts. “Congress has acted to override these statutory cuts on at least 15 occasions and the cost of these overrides has been staggering. The most recent one-year override comes at a price of $25.2 billion. All the money spent on avoiding cuts to physicians' fees has not gotten us any closer to a payment policy that will reimburse physicians for the value rather than the volume of services, will pay physicians and other providers fairly, and ensure access to high quality health care for all Medicare beneficiaries. Today’s hearing is an attempt to move us closer to that goal.”

Full Committee Chairman Fred Upton (R-MI) said, “By now, we are all too familiar with how the current Sustainable Growth Rate system has caused uncertainty among physicians and threatened access to care for our nation’s seniors. Unfortunately, this issue was ignored in the Affordable Care Act, but continuing to ignore it is no longer an option. Real reform will mean that doctors no longer have to wonder whether they will face substantial fee cuts and that our nation’s seniors will not have to wonder whether they will be able to see their doctors.”

During the hearing, Harold Miller, Executive Director at the Center for Healthcare Quality and Payment Reform, testified, “Too much time is spent debating whether to deny patients coverage for expensive treatments in order to reduce spending, when our focus should be on how to keep patients healthy, avoid unnecessary hospitalizations, and reduce the infections, complications, and readmissions which harm patients and cost billions of dollars.” Miller continued to explain that the fee-for-service system creates barriers to more quality health care, stating, “Many of the types of services that have been shown to prevent emergency room visits and hospitalizations are not paid for adequately or at all…under the fee-for-service payment system, physicians don’t get paid at all when their patients stay well.”

Medicare Advisory Payment Chairman Glenn Hackbarth expressed additional concern for the fee-for-service model, stating, “Continuation of fee-for-service, combined with the inevitable increase in fiscal pressure from the retirement of the baby boom generation, inevitably leads to ratcheting down on the rules around fee-for-service payment, more intrusion from central locations like Washington and Baltimore into clinical decision making, more detailed rules about what you have to do to qualify for this type of payment and what you’re not allowed to do if you qualify for that kind of payment.”

In response to a question from the Health Subcommittee’s Vice Chairman, Michael C. Burgess, M.D. (R-TX), Chairman Glenn Hackbarth cited positive examples from Medicare Advantage that could be applied. Hackbarth said, “Some Medicare Advantage plans, as you know, perform extremely well on both quality of care measures and costs. Among the plans that perform well are a variety of different models. Some are pre-paid group practice model like Kaiser Permanente, but there are other plans that contract with individual independent practices and don’t rest entirely on large, multi-specialty groups.” Burgess added, “It’s not just satisfaction of the agencies and the people who measure those things, but it’s also satisfaction of patients and satisfaction of physicians. Certainly my experience with a group like Scott and White in Temple, Texas, this has worked reasonably well and we certainly want to be careful that we don’t damage with whatever we do going forward.”

Rep. Phil Gingrey, M.D. (R-GA) also addressed the Independent Payment Advisory Board, explaining that even with substantive reform, as long as the Board exists, it will continue to threaten Medicare physician reimbursements. Gingrey stated, “The proposed cuts made by IPAB would fall particularly on providers during the next ten years almost. To me, this seems akin to the cuts that SGR has tried to impose on doctors. These types of cuts haven’t worked in SGR and they surely won’t work with IPAB.”

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