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Herger Opening Statement: Hearing on Programs that Reward Physicians Who Deliver High Quality and Efficient Care

February 07, 2012

We are meeting today to hear from individuals who have experience to share that will inform us as we continue our effort to reform Medicare payments to physicians.  At our last hearing on this topic, we heard about different payment model options and efforts to test them in the private sector. 

Today’s hearing, our second, focuses on more incremental, private sector-driven approaches to reforming payments.  We will hear shortly from private payers, a physician organization, and a practicing physician, all of whom are engaged in efforts that reward physicians who provide high quality and efficient care to patients.  A common theme will be how these key stakeholders are collaborating in private sector efforts to improve care while lowering the cost of providing it.  Four of our witnesses, including those representing health plans, are physicians who are leading efforts to achieve this shared goal.  I fully expect you will find their stories compelling. 

Our end goal in all of this remains addressing the Sustainable Growth Rate formula through comprehensive physician payment reform done in a fiscally responsible manner.  This past December, the House passed a bill that would have provided a two-year reprieve from SGR cuts.  This would have provided the longest period of stability for Medicare physician payments in nearly a decade.  It is worth noting that the last time that physicians knew what their payment updates would be for 24 months was when a Republican-led Congress enacted the Medicare Modernization Act in 2003. 

The House bill would have also provided time to develop a payment reform policy that represents a true solution.  Merely averting cuts is not a fix.  The House bill would have facilitated the collection of information to assist in determining a sound policy prescription for paying physicians moving forward.  The bill mandated studies by the non-partisan Medicare Payment Advisory Commission and the Government Accountability Office.  It also required the Congressional Committees with Medicare jurisdiction to consult with physician organizations.  A key focus of this data collection effort is, not  coincidentally, the topic of today’s hearing – how to reward physicians for providing high quality, efficient care to beneficiaries.

Unfortunately, the Democrat-controlled Senate continued its habit of providing patches for a couple months at a time which led us to our current situation – one that again sees us too close to an unsustainable Medicare physician payment cut.  While I am concerned about the continued uncertainty this poses for the Northern California beneficiaries and physicians I represent and those across the country, I hope that the Conference Committee will address this issue in a more responsible manner. 

In the meantime, this Committee is continuing to focus on what we can do now to bring a permanent resolution to the SGR problem.  I am confident the experiences that our witnesses share today will be very helpful in that regard.