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Washington Highlights

Finance, Ways and Means Committees Mark up Bipartisan, Bicameral SGR Legislation

December 13, 2013—The Senate Finance and House Ways and Means committees each passed Dec. 12 the SGR Repeal and Medicare Beneficiary Access Improvement Act of 2013.  While the committees passed slightly different versions of the legislation, both bills would repeal the sustainable growth rate (SGR) formula, move Medicare physician payment towards a system that rewards quality over quantity, and incentivize physicians to participate in Alternative Payment Models (APM) [see Washington Highlights, Dec. 6]. 

In his opening statement, Senate Finance Committee Chair Max Baucus (D-Mont.) praised the Medicare physician payment reform effort saying, “Our comprehensive bill reflects input we’ve received from the entire health care community.  Over the past several years, we’ve heard from stakeholders at numerous roundtable discussions and hearings.  Our counterparts in the House have engaged in a similar effort. As we began to develop our proposal, we realized that we all share the same goals: improve the fee-for-service system, reward value over volume, and encourage physicians to transition to alternative payment models, such as medical homes and accountable care organizations.”

Echoing the Chairman’s comments and acknowledging the collaborative nature of the legislation, Ranking Member Orrin Hatch (R-Utah) opened the hearing saying, “In drafting this proposal, we have had almost a year’s worth of hearings, roundtables, and countless meetings to get feedback from everyone involved, including physician and other health care provider groups as well as policy experts.  And, the legislation has been shaped and altered in response to that feedback.”

The Senate Finance Committee considered numerous amendments and ultimately included several modifications to the Chairman’s mark.  Included in the final bill, which passed by voice vote, was an AAMC-supported amendment addressing the Centers for Medicare and Medicaid Services (CMS) “Two Midnight Rule” [see Washington Highlights, August 9].  Submitted by Sens. Robert Menendez (D-N.J.) and Sherrod Brown (D-Ohio), the amendment requires CMS to “seek advice and consultation from hospitals, physicians, and other expert stakeholders to determine appropriate criteria to account for medically necessary inpatient admissions that last less than two midnights.”

Sens. Bill Nelson (D-Fla.), Charles Schumer (D-N.Y.), Debbie Stabenow (D-Mich.), Robert Casey, Jr. (D-Pa.), and Menendez offered and withdrew an AAMC-supported amendment that would increase the number of Medicare-supported residency slots by 15,000 over five years.  Speaking in support of the amendment, Sen. Nelson reminded the committee of the physician shortage saying, “We still face a shortage in this country of 91,000 doctors and it’s going to get worse.  Now with the baby boom generation retiring more folks are going to be on Medicare and physicians are retiring as well.”  Sen. Nelson continued, “We’re going to have to provide the number of doctors that is necessary.”

Joining Sen. Nelson in speaking in support of the amendment, Sen. Schumer reiterated the importance of increasing Medicare support for graduate medical education (GME) saying, “It’s a very good program and we’re going to need to expand it and I hope my colleagues will be mindful of it.”

House Ways and Means Committee Chair Dave Camp (R-Mich.) offered a substitute amendment to the Medicare Patient Access and Quality Improvement Act of 2013 (H.R. 2810), passed by the House Energy and Commerce Committee on July 31 [see Washington Highlights, August 2], and the committee approved the revised bill unanimously (39-0).  One key component of securing stakeholder support and committee passage was the late inclusion of a 0.5 percent Medicare pay increase for three years. 

In his opening statement, Chairman Camp praised the committee’s efforts to address the looming physician pay cut and problematic SGR stating, “This legislation today provides stability for physicians so they will no longer face massive cuts, but also begins the process of improving how we pay for medical care to focus on positive outcomes and new innovative treatment options.”

Rep. Joseph Crowley (D-N.Y.) joined several members in questioning how the legislation would be paid for and urged his colleagues to avoid targeting Medicare GME funding saying, “We cannot cut GME funding particularly when it is time to develop offsets for this bill.  I hope my colleagues all recognize this fact as we move forward. We need more docs not less.”

Rep. Crowley also encouraged committee members to consider legislation that would address the physician shortage stating, “We need to look at steps to ensure that we are producing and retaining qualified doctors. Part of that is ensuring a stable payment system for doctors and today’s bill is a good step forward towards that end. But it also means making sure there are resources for our medical schools and teaching hospitals to train the next generation of physicians. That means addressing the issue of how many residency slots are available for our medical school graduates.”

Since neither Medicare physician payment reform bill addresses the 20.1 percent Medicare physician payment cut due Jan. 1, 2014, the House passed a three-month SGR patch to Medicare physician payments to allow Congress additional time to finalize and pass a permanent SGR repeal. The patch is expected to be considered by the Senate the week of Dec. 16 [see related story].


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

Courtney Summers
Senior Legislative Analyst
Telephone: 202-862-6042


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Jason Kleinman
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Telephone: 202-903-0806