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Brady Opening Statement: Hearing on the President’s and Other Bipartisan Proposals to Reform Medicare Post-Acute Care Payments

June 14, 2013

I want to welcome everyone to today’s hearing on bipartisan proposals, including those in the President’s budget, to reform how Medicare pays for care after patients are hospitalized. This is the fifth hearing for our subcommittee this Congress and the fourth hearing in a series focusing on bipartisan proposals to reform Medicare and Social Security. 

I am proud to say that today’s effort is truly a bipartisan hearing and that the Ways and Means health subcommittee staffs from both the majority and the minority have collaborated on this hearing.  Today’s discussion focuses on reforming how care delivered after a hospitalization in the Medicare program is paid for. 

We will focus on five policies from the President’s 2014 budget that are also supported by several bipartisan organizations.

Our goal is to discuss the details around the following specific policies:

1. Reducing Medicare market basket updates for home health, nursing homes, rehab hospitals and long-term care hospitals;
2. Creating site neutral payments between rehab hospitals and nursing homes;
3. Establishing more stringent criteria for rehab hospitals;
4. Tackling readmissions from nursing homes; and
5. Creating bundled payments.

The President’s budget estimates these five policies will save $93 billion over 10-years and CBO estimates these policies would save $54 billion.  These are real savings for a program that is facing bankruptcy in 13 years.

The topic for today’s hearing was chosen, in part, from listening to my colleagues. 

Mr. McDermott, during our last hearing you suggested that we were “cherry-picking” proposals from the President’s budget that only focused on beneficiaries. 

Though we still firmly support redesign of the Medicare benefit, we know it is only one factor in the Medicare program that needs reform and we should look at other items in the President’s budget.

Today, we are exploring after hospitalization care because it is in desperate need of reform.  It has been over a decade since Congress has made meaningful changes to the way after hospitalization care is reimbursed.

While we recently received some good news from the Medicare Trustees Report, which noted the life of Medicare’s main trust fund was extended by two additional years, I think some additional perspective is necessary. 

To me, two years is equivalent to the Titanic hitting the iceberg an hour later.  Folks, the Titanic still sunk. 

I challenge this Committee and our witnesses today to think bolder. 

The question that we should be asking ourselves is:  How can we extend Medicare solvency for 10 years?  How about 20? 

We owe it to current and future seniors to meet these goals. 

These will require hard decisions, but making them now will ensure a vibrant Medicare for generations to come.