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Herger Opening Statement: Hearing on Certain Expiring Medicare Provider Payment Provisions

September 21, 2011

Today we are going to hear about a number of Medicare provider payments that will soon expire unless Congress intervenes.  But just because Congress must act, does not mean it should do so blindly.  This hearing offers us, and more importantly the American people, a chance to consider whether Congress should spend more than $2 billion to reauthorize these additional payments for another year.  Just as importantly, it affords interested parties the opportunity to make their case as to whether or not these payments should continue.

In undertaking this review, I am hopeful that we can learn whether or not these payment policies, some of which are more than one decade old, are in need of reform or can be allowed to expire and become the temporary policies they were originally intended to be.  

When these policies were created, many were billed as short-term or one-time payment adjustments.  However, Congress has extended most of them on an annual basis for the last decade.  In most cases, the payments have simply been extended five times or more without any changes to the underlying policy.  

Often, Congress has reauthorized these provider payments in the “doc fix” bills, which unfortunately more often than not pass late in the year, affording us little time to examine the policies and determine if they are still serving their intended purpose.  It is my hope that by beginning to closely study these provisions now, members of the Subcommittee will have ample time to learn about these policies and whether they’re worthwhile for providers and beneficiaries.  

The witnesses appearing before us this afternoon are well positioned to explain these provisions as they represent the very providers who benefit from these additional payments.  In some cases, the witnesses themselves continue to work as providers in their given field.  I welcome their testimony and trust it will offer Members an in-depth look at each of the expiring provisions and its impact on the affected provider groups.  I am encouraged that some members of our panel will offer recommendations for ways Congress can improve these policies, and I thank them for being forward thinking.  I believe such reforms are long overdue, given that some of these policies date back to 1997 and have never been updated.  I am especially pleased that several witnesses will share their ideas as to how Congress could offset the cost of extending these policies.

We will also hear from a former GAO official who will encourage Members to consider whether these additional payments actually benefit Medicare beneficiaries.  It is important that we hear this side of the story too because at the end of the day, we must ensure that the policies we support have a positive impact on seniors, especially since many of them result in higher premiums.

It is important to keep in mind that extending these provisions costs money, more than $2 billion for every year they are reauthorized.  As Members of Congress, we have been entrusted with the enormous responsibility of being good stewards of the taxpayers’ hard-earned dollars.  A $100 million extension may not seem expensive in the context of a Medicare program that spends more than one-half trillion dollars every year.  But it is a large sum of money nonetheless.  And history shows that Congress has continued to blindly extend these policies year in and year out, which raises the question:  Given that these additional payments do not appear to be “temporary,” isn’t the true cost of the annual $2 billion extenders package actually $25 billion, when measured over Congress’ standard 10-year budget window?

Today more than ever, Congress must show fiscal responsibility both in what is passed and how it is passed. We simply cannot afford to continue spending money we do not have, in a program that is going bankrupt.