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Herger Opening Statement: Hearing on Reforming Medicare Physician Payments

May 12, 2011

We are meeting today to hear from four individuals who have experience to share that will inform us as we consider how to reform Medicare payments to physicians.  This is a priority for the Subcommittee as Medicare physician payment rates will be cut by nearly 30% on January 1st unless Congress acts.
The flaws of Medicare‚Äôs Sustainable Growth Rate are well-known to members of this subcommittee.  Congress has repeatedly enacted legislation to avert scheduled rate cuts that have been called for under the SGR every year since 2003.  Often times, this created a deeper hole for the following year and next year, with the scheduled 30% cut, is no different.
These cuts could be devastating for patients and physicians, especially in rural areas like my Northern California district.  Many physicians have warned they will have little choice but to stop participating in Medicare, leaving seniors without access to the medical care they need.
Republicans and Democrats alike have kicked the can down the road long enough.  We cannot continue to patch over this problem with short-term fixes of a few months or a year at a time. The uncertainty of Medicare payment policies is taking a toll on physicians. And with each passing year, the cost of a long-term solution grows larger.  It is time that we work together to find a fiscally responsible solution to this problem.
In addition, we need the physician and provider community to be willing participants in this endeavor to reform the SGR.  Medicare spending is on an unsustainable path and we must find a better way.
This is the first of what will be a series of hearings the subcommittee will hold on physician payment reform.  It is my hope, that by starting early, we will arrive at a payment system overhaul that can pass the House.
Today we will explore innovative delivery models that are taking place across the country.  The testimony we will hear shares a common theme: that coordinated care produces more efficient care with better outcomes at a lower cost; and that fee-for-service delivery systems encourage higher spending without regard to quality.  I believe that the future of Medicare depends on a transition away from the fragmented fee-for-service system to a system where the incentives are aligned with better patient care not just more patient care.  I am also open to hearing other ideas as we continue to explore alternatives to the SGR.