I want to welcome everyone to the second hearing in the Subcommittee on Health for the 113th Congress.  Today we will be hearing from the Medicare Payment Advisory Commission (MedPAC) on the recommendations in their March 2013 report on Medicare payment policies.

We heard from MedPAC during our Medicare structural reform hearing two weeks ago.  It was insightful to hear the Commission’s recommendations for improving the design of Medicare in a way that’s less confusing for seniors, limits their out-of-pocket costs and provides financial incentives to seek the most appropriate care in the most appropriate setting.

It’s my hope that the Committee can work together in a bi-partisan way to advance these much needed structural reforms to save Medicare for the long haul.  

Today, however, we are hearing from MedPAC on the topic of Medicare payments to providers.  We’re pleased to have the Commission here to discuss the recommendations in its March report – which was released this morning – for updating payments in a way that ensures Medicare families have access to high-quality care while also being fair to local health care providers and American taxpayers.  

The insight and guidance we receive from MedPAC is very important as we seek ways to reform the Medicare program – for instance, improving the accuracy of provider payments.   

The MedPAC recommendations also focus on payment system changes that encourage accountability by local health care providers to deliver high-quality care at the most affordable cost. These are important discussions as we move toward payments that reward providers for the quality they provide rather than the quantity of what they have done.

I really appreciate the point that Ranking Member Jim McDermott made at our first hearing. To paraphrase, he said we need to bring value over volume to the Medicare program.  The challenge, of course, is to find common ground as we seek these solutions.

One payment system I want to mention specifically is the physician payment system that is governed by the Sustainable Growth Rate formula, or SGR.  Democrat or Republican, enough is enough.

This year – right now – we have a golden opportunity to eliminate the long-problematic SGR once and for all and reform how Medicare pays physicians.

I know that MedPAC has put significant thought into this topic and I look forward to hearing more about those ideas today.  

Structural changes to the program and payment systems that are accurate and provide the right incentives are complementary pieces.  I applaud the MedPAC Commissioners and its staff for the work they have done in this area.  But I respectfully ask you to do more.

It’s abundantly clear that Medicare is on an unsustainable path.  In fact, two independent agencies, the Congressional Budget Office (CBO) and the Actuaries at the Department of Health and Human Services estimate that Medicare’s Part A Trust Fund will be bankrupt by 2023.

Additionally, CBO projects that by 2022 Medicare spending will top $1 trillion, 90 percent more than we currently spend.  If these trends continue, we can’t save Medicare for every generation or guarantee a sustainable future. Finding solutions to these problems now is our challenge.

The President’s health care law didn’t actually lower health care spending. Congressional Budget Office Elmendorf recently testified that it could not attribute any particular factor to explain recent lower health care spending – other than, of course, the economy.

Additionally CBO estimated that the ObamaCare delivery changes will yield a miniscule $14.7 billion in savings. That barely registers.  

Regardless of how we feel about the new health care law, the glaring fact remains that Medicare’s Hospital Insurance Trust Fund will go bankrupt by 2023.

We have to act. Now. The clock is ticking. Today’s hearing will help us address our challenges.

MedPAC’s analysis is invaluable in helping us better understand when growth in Medicare spending is appropriate and when Medicare payments need to be adjusted.  We also look forward to receiving MedPAC’s next report to Congress in June which will highlight additional opportunities for reform beyond changes in payment systems.

Congress relies on MedPAC’s recommendations because they are based on strong data analysis. That’s a key element in designing policies that improve the Medicare program and save it over the long-term.

So I welcome our invited witness, MedPAC Chairman Glen Hackbarth. Thank you for joining us today, and I look forward to hearing your testimony.

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