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Ways and Means Hearing Looks to Private Sector for Ways to Reform Medicare FFS

February 10, 2012—The House Ways and Means Health Subcommittee Feb. 7 held a hearing to explore private sector cost-saving health care innovations as Congress considers options to overhaul Medicare’s fee-for-service (FFS) reimbursement system. House Republicans have vowed to repeal the problematic Medicare sustainable growth rate (SGR) formula and replace it with new payment models that reward quality and efficiency.  In early 2011, both the Ways and Means and Energy and Commerce committees held hearings focused on replacing the SGR [see Washington Highlights, May 13, 2011]. 

Health Subcommittee Chair Wally Herger (R-Calif.) opened the hearing saying, “As we continue to seek a long-term solution to the Medicare physician payment system, this hearing will enable the subcommittee to learn more about how programs developed by physicians and private payers are successfully rewarding quality and efficiency in care delivery while reducing complications and wasteful spending.” Subcommittee Ranking Member Pete Stark (D-Calif.) agreed on the need to discuss reforms to the current system; however, he emphasized, “The fact of the matter is that if we don’t fix Medicare’s physician payment formula, we are going to lose the ability to effectively collaborate with the private sector because America’s physicians will abandon Medicare.”

Witnesses discussed some of the new and ongoing private-public partnerships that are being piloted through the Centers for Medicare and Medicaid Services (CMS) Center for Medicare and Medicaid Innovations (CMMI); programs where AAMC members are participating [see Washington Highlights, Dec. 22, 2011].  Len Nichols, director of the Center for Health Policy Research and  Ethics  referenced some of the programs currently in place at CMMI including “32 full speed Pioneer ACOs to eight states coordinating large multi-payer collaborations to transform physician practices into patient centered medical homes, 5-7 sets of private plans providing incentives to transform primary care with 75 physician practices each within defined local markets... and very high interest in both the four bundled payment models about to be tested and the open-ended innovation challenge grants which were just submitted.”

Other industry witnesses included Lewis G. Sandy, M.D., senior vice president of clinical advancement at the UnitedHealth Group; David Share, M.D., M.P.H., vice president, Value Partnerships, Blue Cross Blue Shield Michigan; Jack Lewin, M.D., chief executive officer of the American College of Cardiology; and John L. Bender, M.D., president and CEO for Miramont Family Medicine.

Additionally, the (H.R. 3630) House-Senate conference committee, which is tasked with addressing the current SGR patch, continues to focus on the payroll tax deduction holiday, unemployment insurance, and potential offsets.  The committee has yet to discuss seriously SGR reform or an extension of the current patch, which runs through February [see Washington Highlights, Jan. 6].


Len Marquez
Director, Government Relations
Telephone: 202-862-6281


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Telephone: 202-903-0806