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Energy and Commerce Health Subcommittee Holds Hearing On Fiscal Priorities

December 12, 2014—The House Energy and Commerce Health Subcommittee held a Dec. 9 hearing aimed at examining setting fiscal priorities related to healthcare spending. The hearing focused on healthcare spending reforms and policy decisions the committee may address in the 114th Congress. Medicare Payment Advisory Commission (MedPAC) Executive Director Mark Miller, Ph.D., testified on the first panel.

In his opening statement, Subcommittee Chair Joe Pitts (R-Pa.) stated, “Federal spending on healthcare programs is the major driver of the spending and debt challenge that America confronts. If Congress is going to tackle these problems and others facing us next Congress, we will need to come up with responsible ways to pay for these issues. Rather than turning to blunt tools like the Medicare sequester, we need policies that drive reform and savings that make sense.”

Highlighting specific budgetary challenges he added, “Researchers, scientists, patient advocates, and many others have consistently told the Committee that Congress should consider stabilizing and strengthening the National Institutes of Health (NIH) as part of the 21st Century Cures Initiative. The National Institutes of Health and other discretionary program priorities will continue to face budgetary challenges if entitlement program spending continues to take a larger and larger share of the budget.”

Ranking Member Frank Pallone (D-N.J.) acknowledged similar concerns but expressed frustration with Medicare cuts proposed in previous Republican budget proposals that “simply undermine the program’s guarantee of access to care and shift costs to beneficiaries, providers, and states.” He added that Congress should rather “build on the Affordable Care Act (ACA), continue to improve the value we get from our programs in a thoughtful and sensible way, and find ways to take care of all Americans.”

In his written testimony, Dr. Miller detailed MedPAC’s three guiding principles: “to ensure the beneficiary has access to high quality care, to protect taxpayer dollars, and to pay providers and plans in a way to accomplish these two goals.” He noted that although Medicare spending has slowed recently, there is still a need to examine the Medicare program due to “baby boomers transitioning into Medicare and higher beneficiary spending, projected for the future.”

While questioning Dr. Miller, Rep. Eliot Engel (D-N.Y.) stressed his concerns with the physician workforce shortage and previous MedPAC recommendations on Medicare Graduate Medical Education (GME) stating, “I have concerns that cutting Medicare support for GME or physician training would make it very difficult for teaching hospitals and medical schools to carry out their missions in training the future workforce. Additionally, these proposals would change the long established shared investment between medical schools, residency training programs, and the federal government to financially support doctor training.”

Rep. Engel then asked Dr. Miller, “Medicare GME cuts could financially exhaust the ability of teaching hospitals to train additional resident positions. With this said, does MedPAC support the notion of cutting Medicare GME funding?” 

In response, Dr. Miller replied that in 2010, MedPAC offered a broad recommendation to reform Medicare GME to focus on providing team based care, training residents outside the hospitals, and training in rural settings. The recommendation also included redirecting Medicare indirect medical education (IME) payments to entities providing this reformed approach. Dr. Miller then clarified, “To try and answer your question directly, we didn’t take the dollars out of the system.”

While describing several short-run policies intended to improve Medicare, Dr. Miller specifically mentioned site-neutral payment policies saying, “MedPAC has also identified areas where the choice of setting to treat a patient is driven by payment differentials between settings. In principle, the Medicare program should pay the same amount for the same service, regardless of the setting in which it is provided, unless payment differentials are justifiable by differences in patient mix, provider mission (e.g., maintaining stand-by capacity for emergencies), or other justifiable factors.”

Other issues raised during the hearing included Medicare Fee for Service benefit redesign, hospital readmissions, and Medicare Supplement Insurance (Medigap) reform. A second panel of witness testimony was heard from Chris Holt, Director of Health Care Policy, American Action Forum; Marc Goldwein, Senior Policy Director, Committee for a Responsible Federal Budget; and Judy Feder, Ph.D., Professor of Public Policy, Georgetown Public Policy Institute.


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


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