I want to welcome everyone to today’s hearing on addressing the broken Sustainable Growth Rate formula by which the federal government reimburses our local doctors for treating Medicare patients.  While this is our third hearing, SGR has also been a focal point at the first two.
 
The first hearing was on redesigning the Medicare benefit package to make it more rational and responsive to seniors and Medicare patients. In that discussion we heard that solving the SGR problem is key to maintaining a strong Medicare program.  

The second hearing was on the Medicare Payment Advisory Commission recommendations for improving the various payment systems.  In that discussion we heard that now is the time to repeal the SGR.  I couldn’t agree more with both of these sentiments.
 
We need to repeal the SGR so that seniors continue to have access to their local doctors.  Physicians are understandably frustrated.  In our communities we are witnessing first-hand how the current broken system is forcing doctors to rethink their future with Medicare, consider closing their private practices or joining up with a hospital.  Who can blame them?   The SGR is a major contributor to an unhealthy system – and it needs to change this year.

We need to reform the physician payment system to reward high-quality care to patients and value to health care.   

The current fee-for-service payment system treats all services the same.  It fails to take into account the quality of the care provided or how efficiently that care was furnished.  This needs to change too.  
 
Building on this Subcommittee’s efforts in the 112th Congress, Chairman Camp and I joined with our counterparts on the Energy and Commerce Committee to engage with physician organizations and other stakeholders on how best to achieve this goal.

These stakeholders have provided extensive feedback on two iterations of a proposal that would:

• Repeal the SGR and provide a period of payment stability;
• Reward quality and value by using metrics that physicians believe in; and
• Allow physicians to voluntarily opt for alternative payment models if they better meet their needs.

This hearing enables the Subcommittee to hear from a few of the many organizations that provided a constructive response to these proposals.  The Subcommittee will benefit from their experience and insights.  
 
The hearing also provides the Subcommittee the opportunity to hear some perspectives that compliment the voice of the physician specialty organizations.   These perspectives will help us understand that the payment system improvements we envision for Medicare can be accomplished.
 
Most importantly, this hearing will help the Subcommittee roll up its sleeves and get on with the hard work of developing a viable physician payment reform policy.  
 
And crafting this policy need not be a partisan exercise.  While we certainly have our differences, permanently fixing the SGR this year is a shared goal.  I am pleased that the majority and the minority jointly selected the witnesses we will hear from shortly.  This is an important step in the effort to find a bi-partisan policy solution.  My hope is that we continue to collaborate as we talk to physicians on an on-going basis.
 
While finding the money to pay for an SGR replacement policy remains a challenge, the most recent Congressional Budget Office SGR repeal estimate surely helps.
 
Using its new Medicare spending projections, CBO estimates that freezing Medicare physician payments at their current level over a 10-year period would cost $138 billion.  This is a significant reduction from its $243 billion estimate for the same policy just a few months before.
 
I do look forward to working with my friends on the other side of the aisle when we start talking about how to pay for an SGR solution.  We will eventually have to go down that hard road not only to pay for an SGR fix but also to address our spending problem.

But let’s put that aside for now.  Let’s work together – as Republicans and Democrats engaged with physicians and other stakeholders – to get the payment reform policy right.  The goal is not a perfect policy, but a good policy.
 
Let’s craft a good policy that builds on the momentum of the dialogue that continues here today and takes advantage of the more favorable CBO cost estimate.  Together, let’s get it done.

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