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House Energy and Commerce Committee Holds Hearing on Draft SGR Legislation

June 7, 2013—The House of Representatives continued their ongoing efforts to address the Medicare sustainable growth rate (SGR) as the Energy and Commerce Health Subcommittee June 5 held a hearing titled “Reforming SGR: Prioritizing Quality in a Modernized Physician Payment System,” which centered on the committee’s recently released discussion draft SGR legislation [see Washington Highlights, May 31]. 

Health Subcommittee Chair Joe Pitts (R-Pa.) opened the hearing explaining, “From the beginning of this process, there has been one clear goal: to remove the annual threat of looming provider cuts by permanently repealing the flawed SGR and replacing it with a system that incentivizes quality care, not simply volume of services.” 

Chairman Pitts also briefly recapped the process during the 113th Congress, summarized the draft legislation, and encouraged stakeholders to submit additional comments on the draft by June 10.

Addressing the substance and policies in the legislation, Chairman Pitts said, “Some specifics, such as the duration of payment stability or the methods of assessing providers on quality measures have intentionally been left open in our discussion draft. We look forward to input on these and other topics from today’s witnesses and the stakeholder community at large, with the goal of achieving meaningful Medicare payment reform and designing the best possible system for patients and providers alike.”

Energy and Commerce Full Committee Chair Fred Upton (R-Mich.) addressed a major concern shared by many stakeholders: how the committee plans to pay for SGR reform.  Chairman Upton indicated  the legislation “does not contain ‘pay-fors’ as we intend to avoid the error — made in years past — of discussing how to pay for reform before the policy is developed.  But make no mistake, SGR reform will be offset with a real and responsible pay-for when it comes to the floor of the House of Representatives for a vote.” 

Chairman Upton also reiterated that the committee continues to work with the Ways and Means Committee, saying, “Both committees, working closely together and with careful attention to public input, have been able to transform the initial February outline we jointly released into a solid policy framework. There remains much more work to be done, including the hope for bipartisanship, but we would not be where we are today without our great friends on the Ways and Means Committee. That collaborative effort continues.” 

Chairman Upton also reiterated the bipartisan nature of the effort, saying, “Over the past several weeks, Energy and Commerce Republicans and Democrats have labored, hand-in hand, to explore whether bipartisan reform might be possible. While the release last week was done without their name attached, the language it contained did reflect our talks and collaborative efforts with committee Democrats. I would like to thank Ranking Members Waxman and Pallone for their leadership and continued interest in exploring SGR reform.”

In a statement, Subcommittee Ranking Member Henry Waxman (D-Calif.) agreed on the need to address Medicare physician payment and the SGR, saying, “Today’s discussion will focus on some of the critical questions the Committee must address as we look to finally solve the problem of the broken [SGR] formula which has been plaguing Medicare for too long.  It’s clear from this and other hearings we’ve held on the topic that there is broad consensus on the need to fix this problem, and even consensus on which direction we need to move and the broader policy goals that will get us there. The question is how to get there, and, like all things, the devil is in the details.”

To address the specifics, Rep. Waxman identified three “key challenges” and questions he wanted addressed, including how to:

  • best deal with incentives that drive volume at the expense of value;
  • get physicians to accelerate the move to new delivery system models that can improve care without compromising cost; and
  • ensure that already established efforts are not lost as payment reform moves forward.



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


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