[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
REFORMING SGR: PRIORITIZING QUALITY IN A
MODERNIZED PHYSICIAN PAYMENT SYSTEM
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON ENERGY AND
COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
JUNE 5, 2013
__________
Serial No. 113-50
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
__________
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84-440 WASHINGTON : 2013
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
RALPH M. HALL, Texas HENRY A. WAXMAN, California
JOE BARTON, Texas Ranking Member
Chairman Emeritus JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania GENE GREEN, Texas
MICHAEL C. BURGESS, Texas DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee LOIS CAPPS, California
Vice Chairman MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana JIM MATHESON, Utah
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington JOHN BARROW, Georgia
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey DONNA M. CHRISTENSEN, Virgin
BILL CASSIDY, Louisiana Islands
BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida
PETE OLSON, Texas JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia JERRY McNERNEY, California
CORY GARDNER, Colorado BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas PETER WELCH, Vermont
ADAM KINZINGER, Illinois BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
Subcommittee on Health
JOSEPH R. PITTS, Pennsylvania
Chairman
MICHAEL C. BURGESS, Texas FRANK PALLONE, Jr., New Jersey
Vice Chairman Ranking Member
ED WHITFIELD, Kentucky JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan LOIS CAPPS, California
TIM MURPHY, Pennsylvania JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee JIM MATHESON, Utah
PHIL GINGREY, Georgia GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey JOHN BARROW, Georgia
BILL CASSIDY, Louisiana DONNA M. CHRISTENSEN, Virgin
BRETT GUTHRIE, Kentucky Islands
H. MORGAN GRIFFITH, Virginia KATHY CASTOR, Florida
GUS M. BILIRAKIS, Florida JOHN P. SARBANES, Maryland
RENEE L. ELLMERS, North Carolina HENRY A. WAXMAN, California (ex
JOE BARTON, Texas officio)
FRED UPTON, Michigan (ex officio)
C O N T E N T S
----------
Page
Hon. Joseph R. Pitts, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 1
Prepared statement........................................... 28
Hon. Donna M. Christensen, A Representative in Congress from the
Virgin Islands, opening statement.............................. 29
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 30
Prepared statement........................................... 31
Hon. Ralph M. Hall, a Representative in Congress from the State
of Texas, prepared statement................................... 129
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, prepared statement.............................. 129
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, prepared statement........................ 130
Witnesses
Cheryl L. Damberg, Ph.D., Senior Policy Researcher, Professor,
Pardee Rand Graduate School.................................... 33
Prepared statement........................................... 36
Answers to submitted questions............................... 140
William Kramer, Executive Director for National Health Policy,
Pacific Business Group on Health............................... 54
Prepared statement........................................... 56
Answers to submitted questions............................... 156
Jeffrey B. Rich, M.D., Immediate Past President of the Society of
Thoracic Surgeons, Director at Large, Virginia Cardiac Surgery
Quality Initiative............................................. 69
Prepared statement........................................... 71
Answers to submitted questions............................... 162
Thomas J. Foels, M.D., M.M.M., Executive Vice President, Chief
Medical Officer, Independent Health............................ 82
Prepared statement........................................... 85
Answers to submitted questions............................... 232
Submitted Material
Discussion draft................................................. 3
Statement of National Senior Citizens Law Center, submitted by
Mrs. Christensen............................................... 131
Statement of Alliance of Specialty Medicine, submitted by Mrs.
Christensen.................................................... 137
REFORMING SGR: PRIORITIZING QUALITY IN A MODERNIZED PHYSICIAN PAYMENT
SYSTEM
----------
WEDNESDAY, JUNE 5, 2013
House of Representatives,
Subcommittee on Health,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:00 a.m., in
room 2123, Rayburn House Office Building, Hon. Joseph R. Pitts
(chairman of the subcommittee) presiding.
Present: Representatives Pitts, Burgess, Shimkus, Rogers,
Murphy, Blackburn, Gingrey, Lance, Cassidy, Guthrie, Griffith,
Bilirakis, Ellmers, Barton, Upton (ex officio), Dingell, Capps,
Schakowsky, Green, Barrow, Christensen, Castor, Sarbanes, and
Waxman (ex officio).
Staff Present: Clay Alspach, Chief Counsel, Health; Gary
Andres, Staff Director; Mike Bloomquist, General Counsel; Sean
Bonyun, Communications Director; Matt Bravo, Professional Staff
Member; Steve Ferrara, Health Fellow; Julie Goon, Health Policy
Advisor; Sydne Harwick, Legislative Clerk; Sean Hayes, Counsel,
O&I; Robert Horne, Professional Staff Member, Health; Katie
Novaria, Professional Staff Member, Health; Andrew Powaleny,
Deputy Press Secretary; Krista Rosenthall, Counsel to Chairman
Emeritus; Chris Sarley, Policy Coordinator, Environment &
Economy; Heidi Stirrup, Health Policy Coordinator; Lyn Walker,
Coordinator, Admin/Human Resources; Alli Corr, Minority Policy
Analyst; Amy Hall, Minority Senior Professional Staff Member;
Elizabeth Letter, Minority Assistant Press Secretary; and Karen
Lightfoot, Minority Communications Director and Senior Policy
Advisor.
OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Pitts. The subcommittee will come to order. The chair
will recognize himself for an opening statement.
On February 7th and April 3rd, 2013, the Energy and
Commerce and Ways and Means Committee Republicans released a
three-phased outline for permanently repealing the Sustainable
Growth Rate, the SGR, and moving toward a Medicare
reimbursement system that rewards quality over volume.
Stakeholder feedback followed each release and has been
integral to the development of this policy, culminating in the
draft legislative framework released on May 28th.
[The discussion draft follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. This discussion draft took into account the
conversations and work of the Energy and Commerce majority and
minority staffs, as well as the long collaborative relationship
we have had with the Ways and Means Committee.
It was also not a complete reform proposal. Rather, it was
designed to be a partial release that allows for input from
stakeholders and members of this committee. Again, we are
seeking substantive feedback on ways to complete this draft,
and I would encourage all interested parties to submit their
comments to the committee by June 10th.
The committee has sought to accomplish SGR reform through
an open and transparent process with consideration given to all
relevant stakeholders. To briefly summarize the draft
legislation, Phase I repeals the SGR formula and provides a
period of payment stability. During this time, providers will
work with the Secretary to identify quality goals and methods
of measurement. Phase II will build upon the work of Phase I,
tying quality measurement to fee-for-service payment. Provider
input will be essential to defining quality medicine during
Phases I and II. Any time throughout Phase I and II providers
may voluntarily opt out of fee for service by participating in
an alternate payment model.
These models will be flexible. Some exist today, such as
medical homes, while new and innovative models may also be
created and adopted. 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.
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. If we are to succeed in getting reform to the
President's desk during this Congress, reform must be
bipartisan and bicameral. It must also be fully offset and
fiscally responsible. However, we are not making the mistake
that has sidelined SGR in years past by having the pay-for
discussion before we know what we are paying for.
The commitment to exploring bipartisan reform from Mr.
Pallone, Mr. Waxman, leaves me hopeful that bipartisan reform
is indeed possible. In addition, our longstanding and
continuing relationship with Chairmen Camp and Brady from the
Ways and Means Committee underscores the commitment that the
House has to reforming SGR this Congress. I look forward to
working with all parties in the coming weeks and months with
the goal of getting SGR reform to the President's desk. And I
look forward to hearing the views and opinions of our witnesses
today, and I would like to thank each of them for appearing
before this subcommittee.
Thank you. And I yield the balance of my time to the vice
chair, Dr. Burgess.
[The prepared statement of Mr. Pitts follows:]
Prepared statement of Hon. Joseph R. Pitts
The Subcommittee will come to order.
The Chair will recognize himself for an opening statement.
On February 7 and April 3, 2013, the Energy and Commerce
and Ways and Means Committee Republicans released three-phase
outlines for permanently repealing the Sustainable Growth Rate
(SGR) and moving toward a Medicare reimbursement system that
rewards quality over volume. Stakeholder feedback followed each
release and has been integral to the development of this
policy, culminating in the draft legislative framework released
on May 28th.
This discussion draft took into account the conversations
and work of the Energy and Commerce majority and minority
staffs, as well as the long collaborative relationship we have
had with the Ways and Means Committee.
It is also not a complete reform proposal. Rather, it was
designed to be a partial release that allows for input from
stakeholders and members of this committee.
Again, we are seeking substantive feedback on ways to
complete this draft, and I would encourage all interested
parties to submit their comments to the Committee by June 10th.
The Committee has sought to accomplish SGR reform through
an open and transparent process, with consideration given to
all relevant stakeholders.
To briefly summarize the draft legislation, Phase 1 repeals
the SGR formula and provides a period of payment stability.
During this time, providers will work with the Secretary to
identify quality goals and methods of measurement.
Phase 2 will build upon the work of Phase 1, tying quality
measurement to fee for service payment. Provider input will be
essential to defining quality medicine during Phases 1 and 2.
Any time throughout Phases 1 and 2, providers may
voluntarily opt-out of fee-for-service by participating in an
alternate payment model. These models will be flexible. Some
exist today, such as medical homes; while new and innovative
models may also be created and adopted.
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 .
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. If we are to succeed in getting reform to the
President's desk during this Congress, reform must be
bipartisan and bicameral. It must also be fully offset and
fiscally responsible. However, we are not making the mistake
that has sidelined SGR in years past by having the pay-for
discussion before we know what we are paying for.
The commitment to exploring bipartisan reform from Mr.
Pallone and Mr. Waxman leaves me hopeful that bipartisan reform
is indeed possible. In addition, our long standing and
continuing relationship with Chairmen Camp and Brady from the
Ways and Means committee underscores the commitment that the
House has to reforming SGR this Congress. I look forward to
working with all parties in the coming weeks and months with a
goal of getting SGR reform to the President's desk.
I look forward to hearing the views and opinions of our
witnesses today, and I would like to thank each of them for
appearing before the Subcommittee.
Thank you, and I yield the balance of my time to Rep. ----
--------------------------------.
Mr. Burgess. Thank you, Mr. Chairman.
This hearing is all about momentum. For 10 years I have
been here in this committee. On both sides of the dais we have
all agreed that the SGR needs to go, and then we get to hear
from some really smart people from Washington think tanks to
tell us what the brave new world should look like, and then
nothing happens. And we all pat ourselves on the back because
we agree that the Sustainable Growth Rate makes some
unrealistic assumptions about spending inefficiency, but really
doesn't move the needle.
Now, this morning, in spite of what you read in the
newspapers, today is different. It is different in two
respects. First, last week the committee released the first
draft of legislative language to eliminate the SGR and move
Medicare to a program that more aligns with the private sector
in both model development and linking payment to quality. The
draft continued the trend of soliciting more provider feedback
than at any point in history, and I pledge to all Medicare
providers that your feedback, if provided to the committee,
accompanied by helpful guidance, will be given the full
attention of the committee, and we will work with you.
Yes, this is a first draft, a very rough first draft.
Nothing is sacrosanct except the original paragraph which
repeals the Sustainable Growth Rate formula. We have got to
catch Medicare up with what is happening in the real world. We
have to allow every practice modality that is out there to
flourish. Yes, that includes fee for service. But we have got
to catch up with what is happening in the real world, and that
is what this morning's hearing is all about.
I thank the chairman for calling the hearing, and I will
yield back the balance of my time.
Mr. Pitts. The chair thanks the gentleman.
And now turns to the gentlelady from the Virgin Islands,
Dr. Christensen, who is filling in for the ranking member
today. Recognized for 5 minutes.
OPENING STATEMENT OF HON. DONNA M. CHRISTENSEN, A
REPRESENTATIVE IN CONGRESS FROM THE VIRGIN ISLANDS
Mrs. Christensen. Thank you, Mr. Chairman, and I want to
thank you and Ranking Member Pallone, who had to return home
for the funeral of our beloved Senator Lautenberg, for holding
this hearing today. We have come together many times to discuss
this issue, and I hope that today's discussion finally puts us
on a path to real and broadly implementable solutions that
focus on quality, improved patient outcomes, fairer provider
reimbursement, efficiency, and lower cost.
Replacement of Medicare's SGR payment system is something
that we all agree needs to happen. And I think we also all
agree that the healthcare delivery system itself is
dysfunctional. It, too, needs to be fixed, and several
provisions in the Affordable Care Act--to pilot new payment
models and models of care, to innovate and to help guide the
best treatments--can both improve care, help us to reform and
replace the current payment system, and lower costs.
As a family physician, the concept of medical home is not a
foreign one to me. And as a community health doctor in the
public sphere in a small community I know the value of teamwork
to patient outcome, as well as satisfaction. But because the
system was not set up to support a team approach, it added time
and efforts that could have better been spent caring for more
patients, enhancing our knowledge, or quality time with our
family.
We are fortunate that some healthcare providers and systems
have begun to do the reforms we are attempting to create
nationally through the Affordable Care Act and that they can
share their journeys' successes and recommendations, based on
experience with us today, and I want to thank the panelists for
being here, and I look forward to their testimonies.
As we highlighted in our last hearing on this issue,
innovation is key to improving healthcare delivery and payment
system. However, moving forward it is important for us to
encourage innovation while also ensuring that the benefits of
innovation reach all communities. Historically, innovation in
health care has improved outcomes for those who are insured or
are more affluent much faster than for those who are low income
or uninsured, exacerbating existing health disparities.
It is also important that the efforts to reform and replace
the SGR take into account those providers who currently work in
communities and treat patients who have long been underserved
by the health system. These patients are adversely affected by
many social determinants of health, have less reliable access
to quality care, and ultimately suffer poorer health outcomes
as a result. I look forward to hearing how pay for performance
and value or outcome-based reimbursement can address this
particular concern.
Today, we have a lot to focus on, as the background memo
for this hearing indicates. My colleagues on the other side of
the aisle have released two sets of draft frameworks, together
with their colleagues on Ways and Means. They have also
released draft legislative language, and this hearing is
intended to get feedback on the legislative language released
and, more importantly, to help inform our Members on the
committee process moving forward. And there are some gaps that
this hearing I think can probably help to fill.
I also look forward to working with my colleagues on this
and the Ways and Means Committee, and other colleagues, as well
as the provider and patient advocacy organizations, to continue
the efforts of our panelists and others and those of the
Affordable Care Act for reform. Our Medicare patients need and
deserve it.
Is there anyone who would like the balance of my time? And
if not, Mr. Chairman, I will yield back.
Mr. Pitts. The chair thanks the gentlelady.
Now recognize the chair of the full committee, Mr. Upton, 5
minutes for opening statement.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Thank you, Mr. Chairman.
You know, today we are building upon the significant
progress that the committee has made during the past couple
years and take a very important step in permanently repealing
the flawed Sustainable Growth Rate, otherwise known as SGR or
the doc fix. The legislative framework that we released last
week, the review of which is the purpose of our hearing today,
includes invaluable feedback from so many stakeholders.
However, this legislative framework is not etched in stone.
And rather, it is an opportunity for the committee to continue
working closely with Members and stakeholders towards a
permanent repeal of SGR. It also doesn't contain a pay-for, as
we intend to avoid the error made in years past of discussing
how to pay for reform before the policy is actually developed.
But make no mistake, SGR reform will be offset with a real and
responsibly paid-for item when it comes to the floor of the
House for a vote.
When Chairman Camp and I began the push towards reform
earlier this year and in the last Congress, it was with common
purpose and mutual support. Our friendship and working
relationship have never been stronger. Both committees, working
closely together and with careful attention to public input,
have been able to transform the initial February outline that
we jointly released into a solid policy framework. There
remains much more work to be done for sure, including the hope
for bipartisanship, but we would not be where we are today
without our good friends on the Ways and Means Committee, and
that collaborative effort will continue.
Over the past several weeks Energy and Commerce Republicans
and Democrats have labored hand-in-hand to explore whether
bipartisan reform might be possible. And while the release last
week was done without their names attached, the language it
contained did reflect our talks and collaborative efforts with
committee Democrats. I want to particularly thank Mr. Waxman
and Pallone for their leadership and continued interest in
exploring SGR reform.
And while we stand today at a point far beyond any reform
efforts of the past, much work still remains. SGR is one of the
most complex issues confronting the Congress and, not
surprisingly, difficult policy questions remain to be answered.
Today's testimony will help answer some of those questions.
The committee has been dedicated to making reform a
transparent process. Such transparency has already given this
committee insightful recommendations from multiple stakeholders
that culminated in the legislative release last week. We look
forward to continuing that process in the weeks to come.
So SGR reform is vital to ensuring economic stability for
physicians, access to care for seniors, securing the future of
the Medicare system. I want to conclude by sharing my sincere
optimism that, in fact, we will achieve a bipartisan bill, one
that represents the work of both sides of the aisle, and in the
end the best chance for SGR reform to work its way to the
President's desk is through that bipartisanship.
So let's not be satisfied with the unprecedented progress
that we have already made. Let's continue working until we have
solved the problem for not only our physicians, but certainly
for our seniors.
And I yield the balance of my time to Dr. Cassidy.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
Today we build upon the significant progress this committee
has made during the past couple years and take an important
step in permanently repealing the flawed Sustainable Growth
Rate, otherwise known as SGR.
The legislative framework we released last week, the review
of which is the purpose of our hearing today, includes
invaluable feedback from many stakeholders. However, this
legislative framework is not etched in stone. Rather, it is an
opportunity for this committee to continue working closely with
members and stakeholders and toward a permanent repeal of SGR.
It also 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.
When Chairman Camp and I began the push toward reform
earlier this year, it was with a common purpose and mutual
support. Our friendship and working relationship have never
been stronger. 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.
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.
While we stand today at a point far beyond any reform
efforts of the past, much work remains to be done. SGR is one
of the most complex issues confronting the Congress, and not
surprisingly, difficult policy questions remain to be answered.
Today's testimony will help answer some of those questions.
The committee has been dedicated to making reform a
transparent process. Such transparency has already given this
committee insightful recommendations from multiple stakeholders
that culminated in the legislative release last week. We look
forward to continuing that process in the weeks to come.
SGR reform is vital to ensuring economic stability for
physicians, access to care for seniors, and securing the future
of the Medicare system. I would like to conclude by sharing my
sincere optimism that we will achieve a bipartisan bill, one
that represents the work of Republicans and Democrats. In the
end, the best chance for SGR reform to work its way to the
President's desk is bipartisanship. Let's not be satisfied with
the unprecedented progress that we have made--let's continue
working until we have finally solved this problem for our
doctors and our seniors.
Thank you, and I yield the balance of my time to Rep. ----
--------------------------------.
Mr. Cassidy. Thank you Mr. Chairman.
The recent CBO projection reducing the cost of repealing
the SGR to $138 billion gives us an opportunity to reform this
flawed payment formula. We should see this and provide reform
that puts us on a financially sustainable path, incentivizing
quality health care to individuals and certainly to physicians.
I think we all agree on that.
In this process we must be careful to not sacrifice the
independence and autonomy of the independent physician
practice, and as a doc I am very sensitive to that. Mr.
Chairman, I have working on a proposal that would ensure the
independent physician and the small group is protected. I will
be discussing it during my questions, and hope we can work
together as we move forward with reform.
In addition, I would like to commend the chairman for
including a process for alternative payment models in the
committee discussion draft. I understand that this is an issue
the chairman wishes to further develop. I fully support this
approach, and, again, I look forward to working with the
committee to develop it further.
I yield back to Mr. Upton or to Dr. Gingrey.
Mr. Gingrey. Dr. Cassidy, thank you for yielding.
Mr. Chairman, as a physician, I am pleased and excited that
we are at this moment today. We are addressing the flawed SGR
system, seeking to give doctors more certainty over
reimbursement. By using specialty societies and other
professional groups to create quality measures that will be
used to promote best practices, we will see better patient
outcomes and a more efficient--a much more efficient payment
system.
I do have a concern that the quality measures associated
with payment reform may lead to unwarranted court claims.
Government payment reform should not have any effect on a
doctor's liability. During debate, then Chairman Waxman
submitted comments for the record which stated that it was not
the intent of the President's healthcare bill to, quote,
``create any new actions or claims based on the issuance or
implementation of any guideline or other standard of care,''
end quote. Nor is it to supercede, modify, or impair any State
medical liability law governing legal standards or procedures
used in their medical malpractice cases.
Mr. Chairman, there is bipartisan agreement that the intent
of our Federal healthcare laws is to promote quality, not to
create new avenues for medical malpractice claims. I look
forward to working with the subcommittee to address this
potential loophole as we work toward physician payment reform.
Thank you for your indulgence, and I yield back.
Mr. Pitts. The chair thanks the gentleman.
That concludes the opening statements. We have one panel
today. I will introduce our panel at this time.
First of all, Dr. Cheryl Damberg, senior policy researcher
and professor of the Pardee RAND Graduate School. Secondly, Mr.
William Kramer, executive director for national health policy,
Pacific Business Group on Health. Thirdly, Dr. Jeffrey Rich,
immediate past president of the Society of Thoracic Surgeons,
director at large, Virginia Cardiac Surgery Quality Initiative.
And finally, Dr. Thomas Foels, executive vice president and
chief medical officer, Independent Health.
Thank you all for coming. You will each have 5 minutes to
summarize your testimony. Your written testimony will be placed
in the record.
Dr. Damberg, you are recognized for 5 minutes for your
opening statement.
STATEMENTS OF DR. CHERYL L. DAMBERG, PH.D., SENIOR POLICY
RESEARCHER, PROFESSOR, PARDEE RAND GRADUATE SCHOOL; WILLIAM
KRAMER, EXECUTIVE DIRECTOR FOR NATIONAL HEALTH POLICY, PACIFIC
BUSINESS GROUP ON HEALTH; JEFFREY B. RICH, M.D., IMMEDIATE PAST
PRESIDENT OF THE SOCIETY OF THORACIC SURGEONS, DIRECTOR AT
LARGE, VIRGINIA CARDIAC SURGERY QUALITY INITIATIVE; AND THOMAS
J. FOELS, M.D., M.M.M., EXECUTIVE VICE PRESIDENT, CHIEF MEDICAL
OFFICER, INDEPENDENT HEALTH
STATEMENT OF CHERYL L. DAMBERG
Ms. Damberg. Thank you for inviting me here today. As the
committee considers ways to revise the physician fee schedule
so that payment policy supports the delivery of high quality,
resource-conscious health care, there are important design
features related to structuring performance-based incentive
programs that I want to call to your attention. Thoughtful
incentive design can ease the transition process for both
physicians in the Medicare program and enhance the likelihood
of program success. Due to limited time I will touch on only a
few of the important design issues. More details can be found
in my written testimony.
First, encourage improvement among all physicians by using
a continuous payment incentive approach. A continuous incentive
approach pays physicians additional incentive payments for each
increment of improvement they achieve. A continuous approach
avoids the cliff effects that are common in incentive
structures that tie payments to a single all-or-nothing cut
point, setting up a large number of providers who will receive
nothing despite making actual improvements and investments to
improve. Paying more per increment of improvement at the
beginning and the middle part of the continuum than toward the
top strengthens incentives to physicians at the lower end who
are making investments to improve.
Second, use fixed performance thresholds to make it clear
in advance to physicians what level of performance is required
to achieve an incentive. Over the last decade many performance-
based incentive programs used tournament-style relative
thresholds that create a competition among providers. Relative
thresholds create a great deal of uncertainty and can lessen
the response to the incentive, particularly for those physician
who are a distance from the anticipated threshold. Instead,
physicians should compete against a fixed national benchmark
where all who improve and hit the designated targets win.
Avoiding competition between physicians for a limited number of
winning positions will help to foster sharing of best practices
among physicians.
Third, make payments meaningful to generate the desired
response. The experiments of the last decade in pay for
performance generally found weak results in part because
incentive payments were relatively small, on the order of 1
percent. Physician leaders indicate that incentives of 5 to 10
percent are required to be meaningful. In the beginning, while
physicians are learning how to participate, incentives could be
relatively modest. However, over time, and in the near term,
rather than the long term, the size of the incentives should be
increased.
Begin the transition now for primary care by leveraging
measures used in Medicare Advantage and other private payer
programs. Much work has gone on over the past decade to advance
the development of performance measures, particularly for care
delivered by primary care physicians. These measures have been
widely deployed by private payers, Medicaid agencies, and
Medicare in the context of performance measurement,
accountability, and incentives, both in managed care and fee
for service. The committee and Congress need to understand that
a majority of primary care physicians in the United States have
already been exposed to these programs. And they could start by
working with the Medicare Advantage star rating program and in
the process align measurement activities already targeting
ambulatory providers.
Fifth, for many clinical subspecialties measures are
completely lacking or few are available that could be readily
deployed. As such, concerted effort and Federal investment is
needed to develop and bring measures to market. CMS should
identify and focus development efforts on 10 to 12 clinical
subspecialty areas that contribute to a significant portion of
Medicare spending and utilization, and they should work with
measure development experts and clinical specialties to
identify performance gaps and develop those measures.
Sixth, allow physicians to opt out if they can demonstrate
that they have moved to other value-based purchasing models
that incentivize cost and quality. Some providers have already
started to migrate toward alternative payment models such as
ACOs, bundled payments, and medical homes. To the extent that
these models contain performance-based incentives for cost and
quality they should be considered acceptable opt-out
arrangements. For physicians who do not participate in new
payment models, they should minimally demonstrate that they are
able to perform parallel functions to deliver high-quality,
efficient care.
Seventh, rather than simply imposing this change on
physicians, Medicare should work in partnership with physicians
to support their improvement. Creating an environment where
physicians can succeed should include such things as building
support structures with local community partners to work on
improvement and redesign, facilitating sharing of best
practices and learning networks, providing meaningful, timely
data feedback, and continuing to advance the health IT
infrastructure.
In summary, the ability to move successfully forward with
new performance-based payment models is predicated on having a
robust set of measures, a good incentive design, and a support
structure that can help physicians participate and succeed in
the program. Thank you for the opportunity to appear here
today, and I would be happy to take your questions.
Mr. Pitts. The chair thanks the gentlelady.
[The prepared statement of Ms. Damberg follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. And now recognize Mr. Kramer for 5 minutes for
an opening statement.
STATEMENT OF WILLIAM KRAMER
Mr. Kramer. Thank you, and good morning. My name is Bill
Kramer from the Pacific Business Group on Health. I would like
to express our deep appreciation to Chairman Joe Pitts, Vice
Chairman Dr. Michael Burgess, as well as to Ms. Donna
Christensen on behalf of Ranking Member Minority Member Frank
Pallone, for convening today's hearing. I want to applaud the
committee for stepping up to the challenge of finding a
solution to this very important issue.
PBGH represents large employers who want to improve the
quality and affordability of health care. PBGH consists of 60
member companies with employees in all 50 States that provide
healthcare coverage of up to 10 million Americans and their
dependents. Our members include many large national employers,
such as GE, Walmart, Boeing, Tesla, Disney, Intel, Chevron,
Wells Fargo, and Safeway, as well as public sector employers.
The basis for my testimony today is our members'
significant experience in designing and implementing
innovations in provider payment and care delivery. We believe
the lessons learned in private sector purchasing can be applied
to Medicare.
There are three key points I want to make in today's
testimony. First, businesses have a big stake in how Medicare
works. Second, large employers want to see physician payment
tied directly to the value of the services that are provided.
And third, we need new and better performance measures to
support a new physician payment system.
First, why should businesses care about how Medicare works?
For decades, large employers have been frustrated by the rising
cost and inconsistent quality of health care. They know we need
to change the way we pay providers. Large employers have
supported innovative approaches to physician payment, such as
the intensive outpatient care program piloted by Boeing and
adopted by many other large employers.
We know, however, that these innovations do not have the
scale to drive system-wide change and improve health care
across the Nation. We need America's largest healthcare
purchaser, the Federal Government, to work in alignment with us
and join our efforts and apply its purchasing strategies as
purposefully as our businesses do.
Second, large employers want to see physician payment tied
directly to the value of services that are provided. We need to
replace Medicare's current fee-for-service system over time
with payment based on performance with a goal of achieving
measurable improvements in quality and affordability. The new
physician payment system should encourage individual as well as
group accountability.
Although team-based care is often very effective, in many
situations patients are most concerned about the performance of
individual physicians. I recently had surgery to repair a
broken bone in my face, an injury resulting from an elbow to
the eye during a pickup basketball game. While I was pleased to
know that I would receive care within a large, high-quality
healthcare system, what I really wanted to know was the track
record of that surgeon. What was his success rate? How many
infections or surgical complications did the patient have. By
far the most important thing to me was that surgeon's
performance record.
Third, we need to develop more and better performance
measures. Among the nearly 700 measures endorsed by the
National Quality Forum, the large majority are clinical process
or structural measures. While these can be valuable for quality
improvement initiatives by physicians, they do not provide
information about the things that patients and employers care
most about. We strongly recommend that Congress provide support
for the rapid development and use of better performance
measures, including patient-reported outcomes, patient
experience of care, care coordination, appropriateness of care,
and total resource use. The selection of these measures should
be based on input from physicians, but ultimately be determined
by those who receive and pay for care.
In summary, first, businesses have a big stake in how
Medicare works and Medicare should adopt successful purchasing
practices from the private sector. Second, large employers want
to see physician payment directly tied to the value of services
that are provided. PBGH and its member companies strongly
support the replacement of the SGR as long as the new payment
system results in significant improvements in healthcare
quality and affordability.
Third, Congress should invest in the development of new and
better performance measures to undergird the new payment
system. The selection of these measures must meet the needs of
those who receive and pay for care--patients, employers, and
taxpayers.
Our Nation desperately needs to improve its healthcare
system, and the SGR replacement is a rare opportunity to give
it a shot in the arm. PBGH applauds the committee's efforts to
get it right, and we offer our real world experience and
expertise to you in advancing this important initiative. Thank
you, and I am happy to answer any questions from the committee
members.
Mr. Pitts. Thank you.
[The statement of Mr. Kramer follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. The chair thanks the gentleman, and now
recognizes Dr. Rich 5 minutes for an opening statement.
STATEMENT OF JEFFREY B. RICH
Dr. Rich. Thank you, and good morning. Chairman Pitts,
Representative Christensen, and distinguished members of the
committee. Thank you for the opportunity to present my
testimony today on the behalf of the Society of Thoracic
Surgeons.
I come to you wearing many hats. As mentioned, I am the
immediate past president of the Society of Thoracic Surgeons
and an active participant in our national database, one of the
longest running, most robust clinical outcome data registries
in existence. More importantly, or as importantly, I am the
former director for the Center for Medicare Management at CMS.
In other words, I ran the Medicare fee-for-service system in
the last years of the prior administration and was involved
very much in value-based purchasing and also physician reform
initiatives.
I am a founder and director of the Virginia Cardiac Surgery
Quality Initiative. I am now a practicing cardiac surgeon at
Sentara Heart Hospital and president of the Mid-Atlantic
Cardiothoracic Surgeons, so I have an active clinical practice
and understanding of payment and payment reform.
The Society of Thoracic Surgeons represents more than 6,000
surgeons, researchers, and allied healthcare professionals who
are dedicated to providing patient-centered high-quality care
to patients with chest and cardiovascular diseases, including
heart, lung, esophagus, transplantation, and critical care. The
STS National Database was established in 1989 as an initiative
for quality assessment, improvement in patient safety among
cardiothoracic surgeons. The fundamental principle underlying
the STS database initiative has been that engagement in the
process of collecting information on every case, robust risk
adjustment based on pooled national data, and feedback of this
risk-adjusted data to the individual practice and institution
will provide the most powerful mechanism to change and improve
the practice of cardiothoracic surgery for the benefit of
patients and the public. And I might add that the database will
serve as a platform in all phases of reform, I, II, and III.
The Virginia Cardiac Surgery Quality Initiative was founded
in 1994 by myself and others with the expressed purpose of
improving clinical quality across an entire State in cardiac
surgical programs of all sizes through data sharing, outcomes
analysis, and process improvements. All of the Virginia
programs participate in the STS National Database and uniformly
follow the definitions and measures in its landmark clinical
registry.
The database in our State has been unique in that it
matches the patient clinical outcome data with each patient's
discharge financial data from CMS on an ongoing basis. Each
record includes clinical outcomes tied to the cost of each
episode of care. In Virginia we have demonstrated that
improving quality reduces costs. For example, using evidence-
based guidelines, the Virginia Cardiac Surgery Quality
Initiative has generated more than $43 million in savings over
the last 2 years by reducing blood transfusions in the State.
In addition we have reduced atrial fibrillation, a common heart
arrhythmia after surgery, and saved another 20-plus million
dollars over the last 5 to 7 years. So it has been an effective
tool for us not only to improve quality, but to provide cost
savings throughout the States.
Since survival and resource utilization information is such
an important part of the outcomes for cardiothoracic surgery
quality improvement efforts, we urge that steps be taken to
ensure these registries have access to administrative or
financial data from CMS, and hopefully other payers, both for
episodes of care and longitudinal follow-up, as well as
outcomes data from the Social Security Administration or
another accessible source. It is imperative that SGR reform
legislation addresses this foundational issue and gives us a
clinical financial tool to create improvement.
STS wishes to commend the committee and your colleagues on
the Ways and Means Committee for taking the first steps toward
meaningful physician payment reform. STS has provided
substantial comments on the concept document released by the
committees on April 3rd that we submit here for the record.
Today I would like to highlight a few of our conceptual
comments for the committee related to that proposal in a
discussion draft just released last week.
STS is particularly grateful to this committee for your
recognition of the utility of clinical registries in pursuit of
a pay-for-quality physician payment system. To that end, we
recognize that Congress faces a challenge in that many
specialties do not yet have the ability to collect clinical
data, develop risk-adjustive quality measures, and implement
physician feedback and quality improvement programs.
That said, we hope that implementation of a pay-for-quality
program will not have to wait for all of medicine to be at the
same place at the same time. We believe that early innovators
who are able to enter into Phase II, or even Phase III, should
be able to do so now, while others are trying to play a game of
catchup, if you would. For that reason, we recommend that
policymakers consider ways to reward providers for incremental
steps towards these quality assessment and improvement goals,
while allowing those medical professionals whose specialties
that already have the requisite infrastructure in place to
engage in this new system as soon as possible.
We do believe that it is important to use the STS database
for other uses--medical liability reform, public reporting. We
believe that empowerment of patients with data is important and
advancing medical technology.
In conclusion, we wish to thank you for your time and
understanding and listening to our plea for engaging with the
rest of medicine in clinical data and outcomes assessment.
Mr. Pitts. The chair thanks the gentleman.
[The prepared statement of Dr. Rich follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. And now recognize Dr. Foels 5 minutes for an
opening statement.
STATEMENT OF THOMAS J. FOELS
Dr. Foels. Good morning, Chairman Pitts, Ranking Member
Pallone, and members of the Subcommittee on Health. On behalf
of Independent Health----
Mr. Pitts. Would you please turn the mike on? Thank you.
Dr. Foels. Chairman Pitts, Ranking Member Pallone, and
members of the Subcommittee on Health, on behalf of Independent
Health I appreciate this opportunity to testify before you
today. My name is Dr. Tom Foels. I am chief medical officer at
Independent Health, which is a not-for-profit health insurer,
serving over 400,000 members in Medicare, Medicaid, and
commercial insurance in the Buffalo metropolitan area of
Western New York.
Independent Health is nationally recognized for its quality
of services and customer satisfaction. We have consistently
ranked among the top 10 percent of health plans nationally for
quality based on the National Commission for Quality Insurance.
Independent Health shares the belief that the replacement of
the SGR with a viable Medicare physician payment policy is
critical to ensure that the Medicare program will be available
for generations to come. We believe that it is time to replace
the fee-for-service system with a system that rewards quality
outcomes and efficiency.
Now, while I represent Independent Health, I am also here
with the collaborative voice of my colleagues at the Alliance
of Community Health Plans, a group of not-for-profit community-
based plans dedicated to improving the health of its members,
the health of the communities in which they live and work, as
well as to ensuring affordability of coverage.
And finally, I speak today as a primary care physician with
over 30 years of clinical and administrative experience. For
the past 17 years I have held various senior positions at
Independent Health, the last four of which as chief medical
officer. During that time, I have been deeply involved in our
efforts to improve quality and affordability of health care for
our community.
My experiences as a physician have taught me that
transformational change is difficult, regardless of its merits.
I understand the skepticism and reluctance of some physicians
because I have, at times, shared it as well. But I have also
come to understand that important changes need to be made now
that will benefit both physicians and patients and that the
transition to a value-based payment system is both desirable
and workable.
Our upstate New York community, provider community, is
typical of so many communities across the country with an
abundance of independently practicing, non-aligned primary care
and specialty care providers and hospitals. Recognizing the
desire of physicians to retain their independence, Independent
Health has designed its programs in a way that has led to a
virtually integrated model of providers. Independent Health has
helped pioneer efforts in quality improvement, primary care
design, and implementation of alternative payment systems.
Much of our success is based upon the deep trust and
collaboration we have purposely fostered with our provider
community throughout many years of working together. We believe
there are valuable components of our quality, efficiency, and
effectiveness programs that are potentially scaleable and
transferrable to other communities beyond our own.
Independent Health's approach toward developing improved
systems of care are based upon several guiding principles, but
most importantly they are based upon the assumption that
primary care plays a pivotal and foundational role in the
transformation to an improved system.
Independent Health is very excited about a recent
development of a new model of primary care and reimbursement
which we call Primary Connections. In this program, primary
care practices that are certified patient-centered medical
homes are reimbursed not under fee for service, but a hybrid
payment system that includes a prospective, population-based
payment, a quality bonus, and a shared savings program that
rewards providers for reducing the total cost of care.
The collaborative also develops strong relationships
between primary care providers and specialists who compete for
primary care referrals based upon transparent data, profiling
their quality, and cost efficiency.
I would like to briefly share two stories from our Primary
Connection model, one that represents the past and one that
represents and illustrates the experience of a patient and
physician under the Primary Connection model.
Imagine the year 2010, a 70-year old man with a past
history of diabetes, hypertension, and coronary disease
contacts his primary doctor early one morning on a Monday
complaining of chest pain while climbing stairs at home. He is
seen in less than an hour by his primary, where an EKG shows
suspicious findings. His doctor sends him to an emergency room
where he is first seen by a triage nurse, then a physician
assistant, then an ER physician. No provider examining him has
access to his medical records. His EKG is repeated; blood work
and diagnostic studies are performed. A decision is made to
admit him overnight to monitor and observe his condition. He is
discharged the following morning and given instructions to
follow up with his primary. The primary does not receive a
report from the hospital for at least 3 days. Costs would well
exceeds $4,000. Care would be fragmented. Handoffs would be
poorly coordinated. And the patient and family would be
worried, anxious, and afraid.
The year is now 2013. Under Primary Connections, its
patient-centered care, its reimbursement system based on
quality outcomes and cost effectiveness, another scenario
unfolds. It is again 10:00 a.m. in the morning and the patient
presents to the physician's office. Now unlike the previous
scenario, the physician immediately contacts his preferred
collaborating cardiologist and forwards the EKG to his review.
This preferred cardiologist has demonstrated his efficiency,
quality, and clinical outcomes and is chosen because of that
and because the primary works under a reimbursement model that
incents collaboration and new forms of patient management.
After reviewing the studies the cardiologist makes
accommodations for the patient to be seen. The same blood work
and diagnostic testing that might otherwise have been performed
in the ER is completed in the cardiologist's office. The
patient and family are advised he is not having a heart attack.
The cardiologist and primary speak by phone to coordinate care
and follow-up. Later that afternoon, the primarycare
coordinating nurse calls the patient at home to be certain he
is well and asks if there are questions. Total cost of care,
$1,200; care coordinated and efficient; communication immediate
and complete; patient and family fully informed. Primary care
physician is rewarded.
In conclusion, I look forward to sharing with the
subcommittee the journey Independent Health and its physician
partners are now taking to arrive at this efficiency and
effective system of care, as well as our longstanding
successful programs to promote quality.
Mr. Pitts. Chair thanks the gentleman.
[The prepared statement of Dr. Foels follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. That concludes the opening statements. We will
now go to questions from the members. I will begin the
questioning and recognize myself for 5 minutes for that
purpose.
Dr. Damberg, the proposed SGR revision has an initial phase
with a period of payment stability, while quality-measure
development takes place concurrently. What is an appropriate
period of payment stability, in your opinion, in order to
develop and vet measures and build the necessary quality
infrastructure?
Ms. Damberg. As I noted in my testimony, there are an array
of measures that already exist in primary care, and those are
ready for market. So that transition could begin much faster
than on the subspecialty side. As one of the other panelists
indicated, some of the clinical subspecialties have taken
significant steps to identify clinical process and outcome
measures, and I think that those should be leveraged in the
near term. And I think in the area where measures currently do
not exist, and that space is pretty vast for the
subspecialists, that process is probably going to take 3 years
to bring measures to market.
Mr. Pitts. Thank you.
Dr. Rich, considering the different levels of provider
readiness, how do we balance the need for a stable period
enabling providers to build and test the necessary quality
infrastructure while still incentivizing early innovators to
move to Phase II with opportunities for quality-based payment
updates?
Dr. Rich. So I would agree that a 3-year period for the
embryonic novice would be important because it takes that long
to develop your measures, get them vetted through an
organization that would approve them, and then actually to
start collecting data and look at it and using them
effectively.
For those who, like us, who have measures already and we
are using them already, I would suggest a tiered incentive
program whereby the new payment reform would provide incentives
to develop databases. If they only start out early with
structural and process measures, and then develop outcome
measures, that is fine. But those who have outcomes measures
can start early with pay-for-performance pilots or pay-for-
performance programs as we did in Virginia with WellPoint/
Anthem, as well as in the public sector.
Mr. Pitts. OK.
Mr. Kramer, public feedback has reinforced the concept that
it is essential for providers to receive performance feedback
in order to make appropriate changes in practice improvements.
To the survivor of the pickup basketball game, what does a
meaningful, timely feedback process look like for providers,
and what are adequate performance feedback intervals?
Mr. Kramer. We strongly support the principle of providing
feedback to physicians and other providers on the quality and
affordability of the care that they provide. That should be an
integral part of this redesigned payment system. And to the
extent it is possible, we should move in the direction of
having real-time feedback so that information that is embedded
in electronic health records is accumulated and fed back to
physicians on a regular basis.
I worked for many years at Kaiser Permanente, one of the
pioneers in the development of electronic health records. That
kind of ongoing feedback to physicians was essential. I
understand that many systems will take a while to get to that
point, but that is what we should strive toward. In the
interim, we should try to provide feedback as frequently as the
information is meaningful in terms of volume of services that
provides an adequate database for evaluation over quality.
Mr. Pitts. Dr. Foels, you state in your testimony that one
of the guiding principles of IHA are, quote, ``Substantive and
sustainable improvement in quality and affordability of the
American healthcare system will require movement away from
traditional FFS reimbursement systems.'' Can you explain why in
your opinion FFS Medicare undercuts quality and affordability
in our healthcare system?
Dr. Foels. Yes, thank you.
Yes, we believe that fee-for-service reimbursement does
little to reward quality or recognize efficiency. It varies
among providers by great degrees. It also inhibits
collaboration across provider communities. Ultimately, the care
of a patient is that of a team. It is based on teamwork within
a single practice, and it is dependent upon a team across
multiple specialties.
And fee for service as currently visioned and currently
practiced does not promote any collaboration among providers,
and hence we strongly believe that a new system of
reimbursement that may involve some degree of hybridizing the
best parts of multiple ways to reimburse may be much more
effective.
Mr. Pitts. The chair thanks the gentleman.
Now recognize the gentlelady, Dr. Christensen, for 5
minutes for questions.
Mrs. Christensen. Thank you, Mr. Chairman.
And thank you for your testimony.
As an African-American physician who practiced for more
than 20 years, I know that many racial and ethnic minority
providers, providers in rural areas, as I once did, work in
communities and treat patients who have long been underserved
by the healthcare system and detrimentally affected by the
social determinants of health that create, sustain, and even
exacerbate the health disparities. As a direct consequence,
some patients simply present with more challenges than others,
and that needs to be taken into account as we develop these
systems. And so as we seek to assess provider quality and
efficiency in a reformed Medicare payment system, we will
undoubtedly struggle with how to account for these gaps.
So how should we be thinking about addressing these racial,
ethnic, gender, and rural disparities as we move to incorporate
quality performance measurement into a new Medicare physician
payment system, and how can we assure that the Medicare payment
reforms do not leave those providers who serve the Nation's
most medically and financially needy in harm's way by ignoring
the upstream variables that directly affect patient outcomes?
So anyone can answer, but maybe I would begin with Dr.
Damberg by asking her if her pay for improvement along the
gradient begins to address that.
Ms. Damberg. I think absolutely. And as I noted, the way in
which you structure the translation from actual performance to
the payment can be modulated along that performance curve, such
that you more heavily incentivize folks who are at the lower
end of performance, and generally those folks are struggling
with some of the very issues you identify.
So I think that the primary thing that you want to try to
avoid happening is you are going to under-resource those
providers. So allowing them to earn incentives for each
increment of improvement I think will help mitigate that
problem.
The other thing that I think is really important is trying
to align incentives across providers. And I think if you look
at what is going on in ACOs that are really linking providers
across the continuum of care, as well as with social service
agencies in the community, because I think there is recognition
that it is not just health care that influences whether
somebody comes back into the system. And so, again, I think
there is really sort of an elephant in the room around larger
payment reform, not just working at the margins, which is what
incentives overlaid on fee for service really look like.
And so if you look at the Blue Cross Blue Shield of
Massachusetts Alternative Quality Contract, where they have
aligned incentives, it is a global payment, providers have
worked very hard and have closed the disparities gap. So I
think there are models out there that really have demonstrated
that they can improve care for these disadvantaged patient
populations.
Mrs. Christensen. Dr. Rich? And I was going to ask the
Thoracic Surgeons and maybe Independent Health, have they
grappled with this and addressed it?
Dr. Rich. And the STS has long recognized that there are
disparities in care. In our database we collect data on Afro-
Americans, Hispanics, as well as Asians. We look very carefully
at disparities in care for women and for socioeconomic status.
And my first answer or response is that we need to measure it
and inform providers whether they are addressing these needs or
not.
I think to change it you could do what we did at CMS for
hospitals and provide a disproportionate share payment, DSH
payment, that allows providers to seek out the communities that
need them the most, and to get an added incentive to their fee-
for-service payment.
Dr. Foels. And if I might add, and build off the two
previous remarks, I, too, am very sensitive to the fact of the
gap in disparities, which is not closing nearly as fast as
anyone feels comfortable. And I concur with Dr. Damberg's
comments that it is important to recognize that inner-city,
urban, and rural providers have different starting points for
their quality and they should not be punished for that. And
there are scoring mechanisms and evaluation mechanisms,
reporting mechanisms that would allow their incremental
improvement and support.
Mrs. Christensen. Thank you.
My time is almost up so I will yield back.
Mr. Pitts. Chair thanks the gentlelady.
Recognize Dr. Burgess 5 minutes for questions.
Mr. Burgess. Thank you, Mr. Chairman.
Dr. Rich, thank you for being here. You are a practicing
cardiothoracic surgeon, is that correct?
Dr. Rich. Yes.
Mr. Burgess. So when you drive to work in the morning, do
you tell yourself, boy, I hope I am average today?
Dr. Rich. No.
Mr. Burgess. No, you go to work to do your best work every
day.
Dr. Rich. That is right.
Mr. Burgess. This is why I have always had a little bit of
trouble with the concept of pay for performance. We are goal-
directed individuals as physicians. We always go to work to do
our best job. We never go into a patient's room expecting to be
slightly above average, or hopefully not below average. No, we
go in to do our best work. So we all need to recognize we are
dealing with a highly motivated population of providers, and
somewhat at our peril if we damage that motivation that exists
amongst the Nation's physicians. And that is why it is so
important to get the SGR reform because it is damaging to the
psyche of America's doctors.
Now, I woke up this morning to the paper who said that they
were very dismissive of the hearing we have today. The quote in
the paper is that the draft that we have in front of us doesn't
tackle some of the biggest outstanding issues, such as how to
measure quality. So I really liked your comments. In your
written testimony you said on behalf of the Society of Thoracic
Surgeons, I would like to thank you for a very thoughtful
proposal. And I agree with you. I think it is a thoughtful
proposal. I think the committee and the committee staff have
done a very good job of going to the provider community and
soliciting their input as to what these performance metrics
would be. Do you agree with that?
Dr. Rich. Oh, absolutely. Having sat at CMS and seeing
other thoughts and legislation coming out of here, I think this
is probably the most thoughtful, well-rounded, and sought after
for input proposals out there. I was really impressed at the
questions and some of the principles that were out there
regarding the SGR reform.
Mr. Burgess. Can you say that again for the press? You were
very impressed?
Dr. Rich. I think they did a great job.
Mr. Burgess. All right. Well, and let me just ask you, on
the issue of CMS, you do reference in your testimony that it is
so important that the registries have access to clinical data
from CMS. CMS, as we learned over the past several weeks as
they releasing some hospital data, I mean, they have got a lot
of data, and it would really help you and your specialty in
developing these performance metrics, it would really help you
to have access to that data, is that not correct?
Dr. Rich. Absolutely. We have access to data that is really
financial data. There is a little bit of clinical data in the
CMS database, but more financial. Now, when ICD-10 comes out
there will be more clinical data. But bringing that financial
data into the patient record and matching that with the
clinical experience has been an enormously powerful tool for us
in Virginia. We have been able to see how quality improvement
reduces costs. We have been able to look at maintaining quality
and reduce resource consumption and provide the same level or
better levels of care.
It is a very powerful tool to have, and access to it has
been a little troubling recently. We are trying to do that on a
national scale, the STS is, and we are having difficulty
because we have to go every time and ask for a special
exception.
Mr. Burgess. So is that the bottleneck, the fact that you
have to go every time and ask for the specific data?
Dr. Rich. It is one of the bottlenecks.
Mr. Burgess. Are there other bottlenecks that you could
identify for the committee. Because we would like to help you,
we would like to facilitate that exchange of data, because I
believe you are on to something, and I think when you do have
the data sometimes you will discover things that you weren't
even thinking of as a way to embark on a cost-saving measure.
So I want you to have the data and I want you to have access.
Dr. Rich. No, I appreciate that. So another bottleneck has
been getting the Social Security Death Index data. That has
been shut down because of, I guess, legal issues. And so in the
past we were always able to track our outcomes and look at
those who have died and figure if we have done a good or a bad
job, you know, if they have died 7 months later. So that is a
bottleneck.
Mr. Burgess. It is a clinically identifiable endpoint,
correct?
Dr. Rich. Usually. Sometimes people argue about it. But----
Mr. Burgess. Just before my time expires, and I may ask you
in writing to get back to us with some of those bottlenecks.
But, Dr. Foels, I need to ask you, you spent some time
discussing the fee-for-service aspect of the system and why you
don't think that should endure. And yet, in your testimony, no
singular payment system is sufficient to simultaneously promote
quality, efficiency, and effectiveness. And I said in my
opening statement, whatever we do here, it has to allow for the
entire panoply of practice options that are out there, allow
them to exist and to thrive and, in fact, flourish.
So I would just tell you, I think the committee has done a
good job as far as allowing a fee-for-service model to
continue. As someone who has practiced OB-GYN, I mean, there is
not a lot of Medicare practice in your average OB-GYN practice,
but there is some and it is an important part. And if I have
got to join an ACO or deal with bundled payments in order to
continue to see those patients, I may well say enough is
enough, and I am just going to exclude those patients from my
practice. But if you allow me to have a fee-for-service model
for compensation for those patients, I may be more apt to
continue. And there are other examples I could give you, but in
the interest of time, do you have a comment on that?
Dr. Foels. Yes, you raise several points, one being that we
may need to embrace a variable model for those individuals,
those organizations, those physician communities that want to
move quicker and faster toward development of virtual high-
performing systems.
You also pointed out the fact that the, in my opening
comments, that there is no singular payment system that isn't
without its benefits or its perversities, so trying to blend
the best of all together is effective.
One of the interesting footnotes in our experience is our
application of the hybrid payment system to primary care
physicians and its subsequent impact on specialty and hospitals
that are still practicing under fee for service. And I would be
welcome to describe that in further detail. But the takeaway
message here is sometimes altering a payment system within one
sector of the provider system can have effective and beneficial
impacts on other sectors that remain under fee for service.
Mr. Burgess. Thank you, Mr. Chairman. I will yield back.
Mr. Pitts. The chair thanks the gentleman, and now
recognizes the distinguished ranking member emeritus of the
full committee, Mr. Dingell, for 5 minutes for questions.
Mr. Dingell. Mr. Chairman, I thank you for your courtesy. I
commend you for holding this hearing. It is a fine example of
good bipartisan, bicameral progress. And it is my hope that it
will lead to repealing the fatally Sustainable Growth Rate,
SGR, and replacing it with a system that makes good sense for
our healthcare system and for our physicians.
We have broad agreement on the goals and now we must come
together in a bipartisan manner to work hard and find out what
is the proper solution for this problem.
These questions are for all of our witnesses and will be
both friendly and mostly yes, or no.
First question. At the end of 2012, Congress passed
legislation to prevent a 26.5 percent reduction in physician
payment rates. This short-term fix was signed into law last
year and cost about $25.2 billion. Is that correct? Yes or no?
Dr. Rich. Yes.
Mr. Dingell. Thank you. I was afraid I wasn't going to get
a volunteer down there.
This year, the Congressional Budget Office found the cost
of freezing physician payments for 10 years is $138 billion,
more than $100 billion more than their previous projection. I
believe this demonstrates the urgent need for the Congress to
act.
Now, again, to each witness, do you believe that Congress
should repeal and replace the SGR this year?
Ms. Damberg. Yes.
Mr. Kramer. Yes.
Dr. Rich. Yes.
Mr. Dingell. Sir?
Dr. Foels. Yes.
Mr. Dingell. Sir?
Dr. Foels. Yes, I think initiatives should begin.
Mr. Dingell. Now, in your analysis, did this system improve
quality outcomes, yes or no?
Ms. Damberg. Could you clarify which system?
Mr. Dingell. I am sorry?
Ms. Damberg. Could you clarify which system you are
referring to?
Mr. Dingell. Well, I am sorry. We will just lay this one on
Dr. Foels and make that easier.
Dr. Foels, did the system improve quality outcomes, yes or
no?
Dr. Foels. I believe the existing fee-for-service system
turns a blind eye to quality and efficiency.
Mr. Dingell. OK. Now, your Independent Health system
recently implemented a system that shifts away from the
traditional fee-for-service reimbursement. That is correct,
isn't it?
Dr. Foels. That is correct.
Mr. Dingell. And in your analysis, you found that this new
system did improve outcomes, right?
Dr. Foels. Yes, it did, medically.
Mr. Dingell. All right. Now, do you believe that the
reforms made by the Independent Health are a good example that
the Congress should or could follow when reforming SGR, yes or
no?
Dr. Foels. Yes.
Mr. Dingell. Now, there are many other private groups
across the Nation that are experimenting with innovative
payment models which promote quality care over quantity of care
in an effort to make our healthcare system more efficient. I
heard a great deal of comment relative to this point today. And
it is my feeling we should use these efforts as building
blocks. Congress must ensure any new physician payment model
does not work counter to other successful innovations that are
already in place.
Now, these questions are for all witnesses. Ladies and
gentlemen, do you believe the Congress should look at the
innovations and changes being made in the private sector when
considering reforms to SGR?
Ms. Damberg. Yes.
Mr. Kramer. Yes, absolutely.
Dr. Rich. Sure, yes.
Dr. Foels. Yes.
Mr. Dingell. I am running out of time, so I am not going to
ask you to do that at this time, but if you would submit for
the record some suggestions of what you feel might be useful, I
believe it would be valuable and helpful to the committee.
Now, I guess I am going to conclude by pointing out that I
think that this committee is on the right track. I am hopeful
that it will continue to have an inclusive bipartisan process
that will solve this problem which is making a huge mess for
all of us, and I think that we can no longer kick the can down
the road and that now is the time for the Congress to act.
So, Mr. Chairman, I thank you for your work today and for
your leadership, and I am hopeful that this will lead us
towards a better conclusion to the situation we confront. And I
yield back 27 seconds. Thank you.
Mr. Pitts. The chair thanks the gentleman and now
recognizes the chair emeritus of the full committee, Mr.
Barton, for 5 minutes for questions.
Mr. Barton. Thank you, Mr. Chairman. I want to commend you
and the full committee chairman for starting this process. I
think this is something that, given good will on both sides, we
might actually could do, and if we are able to accomplish it,
it will be a significant achievement of the committee. This is
something that is long overdue. Go back to Chairman Dingell's
chairmanship, my chairmanship, Mr. Waxman's chairmanship, we
have fought with this and wrestled with it, and because of the
expense and the way the Budget Act is, when we get down to the
lick-log we have always had to back off. So I hope that this
time your efforts and Mr. Upton's efforts with Mr. Waxman and
others do bear fruit.
I just have one general question to the panel. It is the
issue of balanced billing. It is currently prohibited. I am a
proponent of whatever system we move to, that it should be
something to be allowed. It makes sense. It allows physicians,
providers to bill for those services that are not reimbursable.
And I would just like the panel's general position on whether
we should include some provision for balanced billing.
Dr. Rich. So I think balanced billing, it is a touchy
topic. I think it should be discussed and it should be vetted
through the provider community as well as your committees.
There is a way to sort of balance bill already in the Medicare
system, and that is just to be a nonparticipant, but there are
caps on the amount that you can balance bill a patient. So it
is not very much. It is 105 percent of Medicare. And it doesn't
take many patients not to pay their bill before it doesn't
work. So balanced billing has been something that people have
talked about and there likely is value in having discussion and
perhaps introducing it into the legislation.
Ms. Damberg. While this is not my particular area of
expertise, your comments, I think, highlight another deficit
around aligning incentives across the healthcare system, and
that is price transparency. So I think to the extent that you
are considering any kind of balanced billing provision, I think
that that has to go hand in hand with full disclosure of prices
for patients, because I know on various occasions I have gone
into the fee-for-service market where they no longer take
health insurance, and when you ask physicians to tell you what
the cost of the visit is going to be, they can't tell you that,
and they often refuse to tell you that.
Mr. Barton. Anybody else wish to comment?
Dr. Foels. I would agree with the two previous statements.
I think, to Dr. Damberg's point, the ability to capture
balanced billing and include that in the efficiency profile of
the physician for complete transparency would also have to be
discussed.
Mr. Barton. OK. I yield back, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman.
Now recognize the gentleman from Texas, Mr. Green, for 5
minutes for questions.
Mr. Green. Thank you, Mr. Chairman, for holding the
hearing. And like all of us, for 16 years now, we have been
trying to figure out what we are going to do with the SGR, and
this is an important step in that effort. I thank our witnesses
for being here.
In the interest of transparency and opportunities for
public stakeholder engagement are vital to quality measure
development and approval process. Currently, mechanisms such as
the National Quality Forum endorsement process that measures
application partnership input and pre-rulemaking and rulemaking
solicit and incorporate multistake stakeholder feedback can
help. In addition, the Secretary of Health and Human Services
is in charge of the National Quality Strategy, which it is a
national overarching strategy to guide quality measurement
activities and identify gaps in the current framework.
First, Mr. Kramer, I would like to hear your thoughts on
the current state of the quality measurement oversight in the
Nation's quality agenda. Do you believe we are on track and
what more can be done to drive the quality improvement and
measurement?
Mr. Kramer. Thank you for the question. I will speak on
behalf of Pacific Business Group on Health, but I am also a
member of the board of directors of the National Quality Forum
as well as National Priorities Partnership that measures
application partnership, but I will speak on behalf of PBGH.
I think it is fair to say that the current process is to
develop, endorse and prioritize and put into use performance
measures, are not getting the results we want. I think this
opinion is shared fairly broadly by purchasers, patients,
providers, and health plans.
That being said, there are some elements of the current
structure and process that I think we can build upon. In
particular, the National Quality Strategy, I think, represents
a robust, well-vetted process to develop a clear set of
priorities for the Nation. But we need to speed up the
development of the process of developing and using measures at
all steps of the pipeline.
At the front end, measure development, Congress needs to
invest in the development of patients-centered measures to
complement the measures that are currently in use. These
measures represent a public good of enormous value. For a very
small investment, the payoff, in terms of improved health and
health care, is enormous.
The next step in the pipeline, measure endorsement, we need
to streamline the process for reviewing proposed measures and
getting input from all stakeholders. National Quality Forum has
already begun to make improvements in the endorsement process
through the work of all stakeholders. I hope we can build upon
that.
Mr. Green. With respect to reforming SGR, in all honesty,
if we reform the SGR with the goal of making sure we are paying
for, you know, quality and measurements, I think we will see
that input. But with respect to reforming it, are there current
mechanisms that are both substantive and nimble enough to meet
the policy framework in the discussion draft of the
legislation? Is this legislation something that makes that
possible?
Mr. Kramer. I think this legislation will be a significant
stimulus to development of better measures. It needs to be, I
would recommend strongly, that it be paired with investment in
development of quality measures and a clear direction to CMS to
ensure that the measure endorsement process is streamlined,
efficient, and involves all stakeholders.
Mr. Green. OK. I only have a minute.
Mr. Kramer and Dr. Foels, should participation in clinical
improvement activities be included as a component of
performance-based payment? If so, how could this be structured
to support and incentivize meaningful quality improvement in a
way that is not otherwise captured?
Dr. Foels. Well, I think that is probably one of the most
critical areas to address when addressing this issue of quality
measurement, is how will it be reported, how will it be
actionable, and trying to look for the process by which systems
of care can be reengineered to deliver that quality.
To an earlier comment today, no physician goes in intending
each morning to deny care to a particular percentage or to do
less than what is absolutely best, but it is often a system of
care that they provide in their office or among physicians that
functions such that that is the byproduct. And so I think we
need to continue to think about the ability to apply these
measures on systems with deep collaboration, learning
improvement, and share best practice across this.
Mr. Green. I only have a couple of seconds, but I want to
make sure that investing in health information technology,
medical home certification and use of clinical decision support
tools, that could be used as part of the performance-based
payment, I would hope, because that seems like where we are
going.
Dr. Foels. Exactly to my point. Clinical decision support
would be a new system of care delivery that would close those
gaps.
Mr. Green. Thank you, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman.
Now recognize gentleman from Illinois, Mr. Shimkus, 5
minutes for questions.
Mr. Shimkus. Thank you, Mr. Chairman.
Real quickly, Mr. Kramer, I am interested in your opening
statement, you talked about surgery and checking. Wouldn't it
also have been nice to know, be able to search for fees? For
fees or the cost. Or did you ever, after you went through the
whole operation, did you know the total cost?
Mr. Kramer. Absolutely. You raise an excellent point. I
focused in my opening comments on the quality measures for the
surgery I was undergoing, but an essential element for any
patient is to also know the price. Building on Dr. Damberg's
earlier comments about the importance of price transparency,
this is one of the areas where consumers are looking for
information and it is simply not available, whether in Medicare
or in commercial insurance.
Mr. Shimkus. And I was just going to say, because Dr.
Damberg, Ph.D. Doctor, not to diminish, but you did mention
transparent in the answer to one of the questions as being a
pretty key component.
Ms. Damberg. That is right. I do think that consumers very
much want that information, particularly as, you know,
insurance products change, and even in the Medicare program
consumers face more and more out-of-pocket expenses. And, you
know, having them be exposed to more cost-sharing helps align
the incentives to the consumer about appropriate use of care,
but again, that has to go hand in hand with transparency on
prices so that they can make those.
Mr. Shimkus. And I really buy that, especially in the
preventive care model. If you can really use transparency and
you are encouraging people in wellness, you know, however the
transparent system is, and encouraging people for generics
versus, you know, the name brand, I mean, there is a lot of
things you can do. But if the consumer is not in the game
because it is a healthcare debate, then you lose all that
additional thought process.
In rural America, there is access issues, and inner-city
issues, as was highlighted earlier, where Americans will pay
for quality, we know that, or assumed quality. There are, Dr.
Burgess is gone, but there are cases of problems in the
healthcare system with some providers who are not--I mean, in
any organization there are some problem individuals who
disparage and hurt the entire group. And my concern would be
then erased because of available funding requirements having to
have a lesser choice in quality is a concern. So there is a
need to protect that both, I think, in inner-city regions and
also the rural care. But I am very interested in this reform
proposed, and we have section 2 and subsection (h), which talks
about providers paid under alternative payment models.
And so the question would be, I would like first to Dr.
Foels, understanding the premise of the question, can you tell
me how using alternative payment models can help fix this
system and be beneficial?
Dr. Foels. Yes. There are several ways. You know, our
firsthand experience with our Primary Connection model is to
retain fee for service where there is the potential for the
underutilization of services. So fee-for-service reimbursement
is very effective, for example, in encouraging preventative
care visits, immunizations, and so forth.
The perversity of fee for service is that it recognizes, by
and large, only face-to-face encounters and only those that
occur between a physician or midlevel practitioner, and it
doesn't recognize all of the very effective and beneficial work
that can be delivered by a care team of nurses. It does not
recognize telephonic interaction. It does not recognize
electronic interaction with patients, which can be very
effective. So we developed a component of a prepaid allocation
to the practices that was not visit dependent or necessarily
provider dependent but was tightly adherent to outcomes.
The third piece here, in savings, really gets back to that
earlier issue of price transparency, so allowing a primary care
physician to be rewarded for efforts with their collaborative
team of specialists or hospitals to avoid redundancy of
testing, to find those components of the system that operate
the most efficiently and effectively, and to steer patients in
those directions.
Mr. Shimkus. And, Mr. Chairman, just follow up just on that
answer.
Shared savings, what do you mean by shared savings?
Dr. Foels. Well, our model of shared savings for primary
care is upside only, so it does not include any punitive
downside, and it is measured on the total cost of care for the
population, total population of patients assigned to that
primary care group, and any incremental savings off a previous
year's budget are shared proportionately back to them.
So again they are rewarded for the hospitalization that
could have otherwise been avoided, which is also a quality
issue as well as a cost-effective issue regarding alternatives.
Mr. Shimkus. OK. Thank you, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman.
And now recognize the gentlelady from Florida, Ms. Castor,
5 minutes for questions.
Ms. Castor. Well, thank you, Mr. Chairman. I really
appreciate you calling this hearing today on this important
topic.
And I appreciate the witness testimony very much. You have
made some very constructive recommendations. And I think the
general parameters are clear. That is the easy part. We want to
permanently replace the Medicare physician payment formula,
this SGR that is very poor public policy, and replace it with a
new payment model that improves the quality of care and lowers
the cost of Medicare. And that is very easy to state, but it is
much harder to get done.
But I know that we can do this. Just look at the report
from the Medicare trustees last week. The reforms that we
adopted in the Affordable Care Act are helping to reduce the
growth in spending in Medicare already. Health spending in
Medicare is expected to grow at a slower rate now than the
overall economy in the next several years. So that is good
news, and it does give us an opportunity to take some of the
more difficult steps in payment reform.
But I have to say, I was very surprised in the Republican
discussion draft, because I think we are so far beyond the
discussion draft. It doesn't provide us with any real direction
on payment reform, and I think that is unfortunate. Unless we
change it substantially, the way it is crafted now, it will
keep us wedded to the SGR and that poor public policy of
temporary patches and outdated spending patterns.
I think better model to look to is the bipartisan bill H.R.
574 that I am a cosponsor of. It was drafted by Congresswoman
Allyson Schwartz and Congressman Joe Heck. It is called the
Medicare Physician Payment Innovation Act of 2013. It provides
greater detail.
And when you compare the two, if you look at the current
discussion draft now, I don't like that it has upfront cuts to
providers. It doesn't really provide any innovation in what we
need to do. We should be incentivizing physicians to transform
their practices and participate in these innovative payment
models. And what this discussion draft does, it says you can
opt in if you like. And that is why I think it is too
squishy.To use a technical term, it is kind of wimpy. And we
can do a lot better. We have the experts here that can help us
get there.
If you look at H.R. 574, it repeals the Sustainable Growth
Rate permanently, stabilizes the current payment system, it
institutes interim measures to ensure access to care
coordination, it gives that important boost to primary care
that I think everyone agrees on, we can build on the reforms in
the Affordable Care Act. And then what it does, it says we are
going to aggressively test the models and evaluate these
payment models. It provides a very significant transition
period, and as Dr. Rich recommended, the focus on best
practices and the clinical registry.
So I would recommend to my colleagues to put out a real
discussion draft where we can start to get to the more
difficult decisions. One of those, what a number of you have
mentioned, some of the high cost areas. We know we need to
boost primary care and align doctors and have them work
together better, but there are some certain high cost areas.
You said there are 10 to 12 we should focus on. And, Dr. Foels,
you said it has been difficult in transition, but you have
arrived at some interesting payment systems.
Could you all highlight some of the specific areas, high
cost, that are going to need greater transition periods or you
think we should focus on that are crying out for reform?
Ms. Damberg. I think you are asking a broader question than
just around measurement. So when I was talking about the 10 to
12, these are clinical specialties that if you look at sort of
the majority of care that seniors need, it falls into areas
such as cardiology, gastroenterology, endocrinology, neurology.
And recognizing that, you know, we are in this sort of space
where there is a vacuum of measures at the moment, and the
realistic implementation of these programs, I think the idea
should be to focus on where most of the action is in Medicare
and focus the measure development work in that space in the
near term.
So that can be used in any payment model that exists in the
Medicare program. And one of the comments that is in my longer
testimony is that whatever happens in the context of the SGR
reform should work to align with programs that exist throughout
Medicare, including the incentive program for meaningful use of
electronic health records. There is a significant amount of
alignment and coordination that can happen there, both as
physicians and the LNC work with her, electronic health record
vendors to ensure that the EHRs have the functionalities to
capture the data that clinicians need to manage care and to
report out these measures and to build in those clinical
decision support tools to help physicians manage to appropriate
care. So those exist in any system and that is something we
should be working for across the entire Medicare program.
Mr. Pitts. Gentlelady's time has expired.
The chair recognize the gentleman from Pennsylvania, Dr.
Murphy, 5 minutes for questions.
Mr. Murphy. Thank you, Mr. Chairman. I just want to make
sure, and I am particularly focused on the two physicians who
are here, this basically puts the onus on the academiesand
colleges of medicine, various subspecialties, upon you to
provide quality standards of best clinical practices. Is that
the way you read this? OK.
And also that the specialties then are to develop on the
front end the standards of protocols for best practices and
apply those. Is that the way you read this as well? I want to
make sure I am understanding this the same as you.
But I also understand that different specialties are
farther advanced than others in terms of really establishing
protocols. Am I correct on that? Dr. Rich, am I correct on
that?
Dr. Rich. Yes.
Mr. Murphy. Now, would you see this, in terms of quality
measures, that basically this is a payment model that is based
upon that if you adhere to the standards and protocols
established by the medical specialties, that would be
considered a quality measure? In other words, if they said for
this diagnostic workup or for this diagnosis, once these
results are in, this treatment plan, this is the protocol you
follow and that would be the standard by which payment would be
attached.
Is that your understanding, Mr. Rich?
Dr. Rich. Yes.
Mr. Murphy. Now, what happens if a provider feels the need
to vary from that protocol? Does this bill adequately address
that yet or do we need some more work in that area?
Dr. Rich.
Dr. Rich. So I think, yes. So we work as a specialty
society to develop on an evidence basis guidelines, and we go
out to our membership and say get with the guidelines and here
are the guidelines for these, you know, procedures that you are
doing. So you are absolutely right.
The bill doesn't address discretion that physicians have in
using technologies and drugs that are what we would call off-
label use. And when I was at CMS, we discussed this at great
length, even into the Secretary's office, and the message back
to me was that we didn't want to interfere with the discretion
of the physicians who are taking care of these patients to use
a technology or drug within a certain patient. It can be
abused. And so I don't think it goes far enough here in the
legislation.
Mr. Murphy. Well, let me ask you this, too, and Dr. Foels,
as well as you can answer this. Then would it be--I mean, just
other issues here--that, for example, if a person is board
certified in a certain specialty, that they--perhaps one of the
ways we could word this--is that person would be granted a
little more latitude. So, for example, if you are recommending
something as a thoracic surgeon, and someone else who is a
practitioner, it is not within their area but they are
following your protocol, that your recommendation, because you
are board certified in the area, if you are varying from that
protocol, might that be some other wording we could look at, or
whatever that is. I am asking the both of you if you have any
suggestions, we would appreciate that.
Dr. Foels. Well, to comment on the board certification.
That has evolved significantly in the past decade. Most
recertification in a medical specialty involves quality
assessment improvement efforts within your practice, so I think
board certification is much more of a tangible marker of
quality and improvement.
To your earlier comment about guideline, I would concur
with Dr. Rich that there are very appropriate times where a
guideline is not the path that should be taken with a
particular patient. The frequency with which that occurs has
potentially predictable ranges, and I think that the guideline
adherence can be measured within certain degrees based on that.
Mr. Murphy. Let me ask this, too. In terms of a payment
model, I can understand how this could work if you have, for
example, a hospital-based employee, where you have a large
number of physicians and providers, a wide range of specialties
practicing, because then the hospital could receive or the
network could receive a global payment for that patient that
covered life. If someone, however, is in a private practice,
how do you work out the payment systems and still have enough
incentive for people to work as integrated, coordinated care
team. I am asking anybody on the panel because that is a key
question.
Dr. Rich. So you could do global payments. We did in
Virginia, we did it in our hospital with independent practices.
It is just an agreement, a transparent agreement that you can
have, and we worked on that.
Mr. Murphy. Who controls that payment then? I mean----
Dr. Rich. So in Virginia, it was the hospital. The payment
flowed down to the hospital and then they distributed it under
agreement to the providers, and the providers were selected out
depending on their quality and their reputation in the
community.
Mr. Murphy. I am a psychologist by training, and I am on
some hospital staff, but if a physician refers to me from
another hospital and I am not part of the hospital staff, how
do they work out that payment system? And I know I am out of
time, but that is something, I think, we really have to work
out in terms of this, how we handle. And it does make reference
to people who are nonphysician providers, but that is something
we would appreciate your input on.
Thank you for the time, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman.
Now goes to the gentlelady from California, Mrs. Capps, 5
minutes for questions.
Mrs. Capps. Thank you, Mr. Chairman.
Thank you all for being here for this important discussion.
I have long been a supporter of fixing the SGR and am happy we
are continuing that conversation. Before I get to my questions,
I just want to highlight, as we continue on this series of
hearings addressing the SGR, I want to make sure we do not
forget to address other items as well, like therapy caps that
have historically moved alongside the yearly doc fix and share
the common purpose of ensuring access to critical care for our
Nation's seniors, and the opportunity to finally address the
GPCI and other geographic payment inequalities that leave so
many providers, especially those in my district, unfairly
reimbursed and seniors with really fewer options.
Now, switching gears, as we focus today on quality, I would
like to take a broad look at our health system. There has been
a lot of talk in here on this committee about the role of
doctors in the healthcare system, very appropriate, but as I
have said before, I truly believe if we are going to really
move to a more comprehensive prevention-focused system of care,
we need to look at the full picture of our healthcare system.
This is especially critical when it comes to addressing
quality.
Most of the new delivery models like patient-centered
medical homes and accountable care organizations emphasize
team-based care, and they recognize the critical role and value
of nonphysician providers. As such, I think it is important to
acknowledge the role of other healthcare providers like nurses,
nurse practitioners and physician's assistants in this
conversation as well.
So, Dr. Foels, you state in your testimony that management
of preventive health and chronic disease is inherently team
based, which I agree. Could you expand on how diverse providers
could be incorporated into any reformed Medicare payment system
and what are your thoughts about their role and how they might
improve quality and value?
Dr. Foels. Well, I can perhaps briefly reflect on my
earlier comment on an existing fee-for-service reimbursement
system, which does not really recognize team-based care to any
great degree. A large portion of preventive care can be
delivered by nurses or advanced practice nurses who can
identify missed opportunities for preventive services, make
those arrangements. This does not require the time of higher
licensed individuals. One of our mantra is always practicing to
the top of your license.
Mrs. Capps. Right.
Dr. Foels. And I think it is fairly true that nurses are
inhibited today, in part by the payment system, from practicing
to their full extent.
Mrs. Capps. Thank you. I agree.
And I want to return now to Cheryl Damberg. Under the
proposed revision of SGR, which emphasizes best quality
practices, nonphysician providers paid under the Medicare
payment system are also expected to be rated on quality
measures.
In your testimony, Dr. Damberg, you highlighted how we must
enlist providers as true partners in defining the measures for
which they will be held accountable for as teams and providers.
In your opinion, do nonphysician providers need unique
measurement sets compared to physician providers, and what role
do you believe they should play in defining these measures?
Ms. Damberg. Well, let me start with the latter part of
your question. Absolutely, they should be involved. And I think
with all of the changes that going on in health care right now,
practices are rethinking how they use people. But I want to
note that what drives measurement is it is patient focused, so
the patient's health needs determine what measure gets applied.
And so if these other nonphysician providers are qualified to
deliver that care that the patient needs, then those same
measures would apply. So it is not clear to me that you would
develop a set of measures that, say, apply to nurse
practitioners, but rather the measures are developed around the
patient and his or her needs.
Mrs. Capps. I see. That is intriguing, and I guess I would
have to say it is pretty novel. Do you see glitches in or
challenges in going from the way we do it now to something like
this?
Ms. Damberg. I actually don't think it is inconsistent. If
you look at the care that, you know, if you go to your
physician practice site that you hope that they are delivering,
you hope that that care is appropriate for you, given your
gender, your age, and your health conditions, right? And the
way in which measures are constructed, it really reflects that.
So, you know, if you are a diabetic, they are looking to
control your blood sugar and your lipid levels, as well as your
blood pressure. So I think it is really an issue of, you know,
getting the right measures that focus on the major clinical
issues that face patients in our healthcare system.
And then in the context of constructing those measures, you
designate who are the appropriate specialties, and some of
those may be nonphysicians, who should be held accountable for
delivering that care.
Mrs. Capps. I see some other people nodding. I know my time
is up. Is there a general agreement with this? Yes?
Mr. Kramer. I would just say that example of good team-
based care, which involves nonphysicians as well as physicians,
is the intensive outpatient care program piloted by Boeing and
adopted by a number of other large employers for taking care of
very sick people with multiple medical conditions. It has been
very successful in involving all members of the team, working
to the top of their license. It has been done in a more
affordable way, getting better clinical outcomes, better
patient experience, better provider experience, and lower costs
overall. Be glad to share the additional information.
Mrs. Capps. I would appreciate that if you include that in
the record.
Mr. Kramer. Yes, it is included in the supplemental
materials we have submitted to the committee.
Mrs. Capps. Excellent.
Mr. Pitts. The gentlelady's time has expired.
The chair now recognizes the gentleman, Mr. Guthrie, 5
minutes for questions.
Mr. Guthrie. Thank you, Mr. Chairman. Thanks for convening
this. And I agree with our distinguished chairman emeritus, Mr.
Dingell, working together bicameral, bipartisan, trying to
solve an issue that whenever we get to the countdown of SGRs in
the past, that is what I hear about when I go home, is from
physicians and people in the medical field. And so it is
important that we are doing this and doing it way early and
getting ahead of it before we get to that point. So it shows
that things are working, and hopefully we can work to get a
solution. So I appreciate that very much.
And to follow from my friend from California was talking
about, just measurements and qualities, and, you know, a large
number of the quality measures in use today were developed
following scientific processes to ensure their continued
importance, scientific acceptability, which is important,
usability, feasibility for reporting. However, there are many
more measures in widespread use that fail to meet or require
additional resources to meet these criteria for national
reporting.
And Dr. Damberg, what process or processes could be enacted
that would ensure quality measures or measurement sets are
developed with high scientific rigor, maintain currency to the
latest evidence-based clinical practices, and are relevant to
new care delivery systems?
Ms. Damberg. So if CMS were taking the lead on measure
development, I think what they have to do is institute a
process where they work with measure developers who understand
the scientific requirements and steps in a measure development
process, which includes reviewing the evidence, holding panels
with clinical experts that can include physicians and
nonphysicians, to ensure that the underlying science is right,
and then working to develop a draft measure specification that
you go out and test and validate.
So they need to set up a rigorous transparent process to do
this. And I think that it should involve clinical
subspecialists and primary care physicians in identifying what
those performance gaps are. And if you go out and you talk to
physicians, they know where the gaps in care are, and so I
think by linking the clinical specialists with the performance
measure developers, I think you can have a robust development
system that will create confidence in the system.
Mr. Guthrie. Well, thanks. And I am also on the Telecom
Subcommittee of this great committee, and we are dealing with
trying to update things, and telecom is changing so fast, where
there is a system that doesn't happen.
So I guess also ask, in health care, my lifetime, they have
gone from 6 weeks of recovery from gallbladder surgery to
outpatient care. So just as those things, as we innovate and
develop, the system has to be there and develop with that.
Ms. Damberg. Yes, the system has to be nimble enough and
there have to be resources available to allow for annual re-
review of measures and updating as necessary and retiring as
necessary.
Mr. Guthrie. Well, thank you.
And, Dr. Foels, how would these processes ensure that
quality measures evolve with data accumulation and advancement
in measure development science and appropriately account for
the relative value of measures as they relate to other measures
and use? I think I just used measures as every part of speech.
Dr. Foels. Well, you know, I actually want to build off Dr.
Damberg's comments in that regard and at the same time address
the issues you have raised.
So there are a couple of layers deeper that also have to be
fully explored, examined and monitored, and one has to do with
the methodology for attribution and accountability. I think the
other take-forward lesson we have learned from our community is
that, although various metrics are--certain of them are very
attractive because of their ease of operational measurement,
aren't terribly important because the community is already
achieving reasonably high rates of success. And so prioritizing
the measures to which are most important and impactful is also
going to be, I think, a critical byproduct of whatever group is
assigned this task.
Mr. Guthrie. Well, it is amazing how innovative we are in
medicine, you know, from cancer drugs to where it killed all
cells to get the cancer cells to where they are trying to--in
Louisville, University of Louisville, is a doctor there
pioneering going to individual, where they actually get just
the cancer cells, as you all know better than I. I just want to
make sure that whatever system we have, innovation and
processes that allow innovation and keep up as we change are in
place. So I appreciate that very much, and I yield back 10
seconds.
Mr. Pitts. The chair thanks the gentleman.
Now recognize the gentlelady from Illinois, Ms. Schakowsky,
for 5 minutes for questions.
Ms. Schakowsky. Thank you, Mr. Chairman.
I have some questions for you, Dr. Damberg. Optometrists,
podiatrists, optometrists, chiropractors have all been
recognized by Congress within the definition of physician
providers in the Medicare statute. Those medical providers
follow the same rules and policies as other physician providers
who deliver high quality services to the Medicare population.
For example, these providers face the same threat of
reimbursement cuts under the SGR as M.D.s or D.O.s. Using the
same rules for all providers included within the physician
definition allows Medicare patients the freedom to choose among
licensed healthcare providers for covered services.
I have concerns that the discussion draft actually would
undermine a patient's access to the provider of their choice by
allowing the Secretary to establish separate quality update
incentive programs for optometrists, podiatrists, chiropractors
than those established for M.D.s and D.O.s, and it seems to me
this could result in providers who perform the same services
being assessed by different quality standards and receiving
different payment adjustments.
So let me ask you if you think it is important for every
physician provider treating the same problem to be measured
using the same quality measurement system and eligible for the
same quality update incentives?
Ms. Damberg. I actually do. I think, again, per my earlier
remarks, the clinical care that is delivered should be focused
on the patient's needs, and whatever provider is addressing
those needs should be held accountable. And I recognize that
there are variations across health systems in how they deploy
personnel. So I know firsthand, when I had my bunion surgery at
Kaiser, I had a podiatrist who was involved in that. So, again,
I think it is very important that the same set of measures
apply as relevant.
Ms. Schakowsky. So talking about the patient, by having
different quality measures and incentives, do you think that
that could affect their access to quality care and their
choices?
Ms. Damberg. Do I think it could affect Medicare
beneficiaries?
Ms. Schakowsky. Yes, different, if we had different quality
measures, might it not affect them?
Ms. Damberg. It is not clear to me that it would
necessarily affect access to care. I mean, I think potentially
the risk around access more generally in any incentive-based
program comes when incentives get so large that they distort
behavior, and particularly in the context of outcome measures
you have not accounted for underlying patient factors that
attribute to the outcome such that physicians or other types of
practitioners may choose to avoid treating patients.
Ms. Schakowsky. OK. And currently, don't optometrists,
podiatrists, chiropractors follow the same criteria right now
and successfully report the same quality measures as M.D.s and
D.O.s?
Ms. Damberg. In the measurement programs that I have been
involved with, I have not seen evidence that they are reporting
those measures. So I don't have any knowledge of that
firsthand.
Ms. Schakowsky. OK. Another quality initiative being
implemented in Medicare is the electronic health record
incentive program, which provides incentive payments, as you
know, to physician providers as they adopt, implement, upgrade,
demonstrate meaningful use of the her technology. Do you know
if optometrists, podiatrists and chiropractors are included in
this program?
Ms. Damberg. I do not know that.
Ms. Schakowsky. OK. And let me see if--I think these all
deal with those. You may not know the answer to this. The
answer is yes, actually. Like these quality initiatives, isn't
it important for the quality update incentive program being
proposed for Medicare to require all physician providers in the
Medicare program, including those other providers I listed, to
use the same standards and receive the same incentives for the
same services? I think it is another way of asking the same
question.
Ms. Damberg. The answer should be yes, they should be held
accountable to the same standards. I would be loathe to set up
two different incentive systems. I just think the complexity of
it and sort of the challenge is in sending very different
signals. If anything, what we want to be doing is be creating
greater alignment across physicians, other practitioners in the
ambulatory care setting as well as aligning incentives across
the system in which the patient travels. So aligning incentives
between physicians and hospitals, that is so very critical. And
again, the extent to which this bill can help push that ball
down the field a bit more would be very helpful.
Ms. Schakowsky. Mr. Chairman, I just want to say how much I
appreciate the tone of this hearing and this discussion, and I
hope we could have more like it. Thank you very much.
Mr. Pitts. The chair thanks the gentlelady.
Now recognize the gentleman from Virginia, Mr. Griffith, 5
minutes for questions.
Mr. Griffith. Thank you very much, Mr. Chairman.
I appreciate all of you being here today, and I know there
is some good questions that you already answered, and I am
going to yield the rest of my time to Dr. Burgess for
additional good questions.
Mr. Burgess. And I thank the gentleman for yielding.
Mr. Kramer, let me just ask you a question. In your
testimony, you talked about incentives and providing--building
incentives into the structure, but oftentimes, here in the
people's House, we end up talking about making something
punitive rather than providing an incentive. Can you speak to
that and the differential between those two activities,
building in an incentive versus building in a punitive
activity?
Mr. Kramer. I will offer my opinions on this, although
maybe it is best answered by a psychologist. But I think that
my experience and experience of our members at PBGH is that
positive incentives for doing the right thing are very
powerful. There are occasions, however, we want to put in place
a mechanism to avoid bad things, and it may be that in some
situations that some kind of penalty would be appropriate.
For example, we want to avoid infections, you know, high
rates of infection, we want to avoid high rates of mortality,
we want to avoid high rates of unnecessary hospital
readmissions. There may be some situations like that in which a
penalty would be appropriate, but I think in most cases they
can be restructured as a positive incentive. So the negative
side of infections is infections are too high, therefore reward
progress on reducing infections and frame it as a positive
incentive, I think that could be most effective in moving us in
a direction so that we get the results we want.
Mr. Burgess. You know, my old epidemiology instructor from
Southwestern Medical School used to tell me that in order to
adequately measure something you had to eliminate fear, and the
providers must not be in fear; otherwise, they are not going to
be as forthcoming with you when they have problems. And that is
one of the difficulties I see in constructing a system that is
more punitive than one based on incentives. So I agree with
you, and certainly the prescription drug or the providing for
electronic e-prescribing, it wasn't part of the healthcare law,
it was part of the stimulus bill, you are actually going to
build some resentment toward e-prescribing because of the fact
that it is a reimbursement reduction if that doesn't happen,
rather than building in an incentive. And I hope we can be
sensitive and careful about that as we construct this.
Dr. Foels, I just want to continue our discussion on the
fee-for-service aspect for a moment where we kind of got cut
off by time, but I do feel so strongly that in our reform of
the SGR, you have to allow the--I mean, a lot of physicians of
my age group, fee for service is what we have always known. We
are goal directed. It is an incentive to which we respond. And
to just start out with the premise that we are going to
eliminate all fee-for-service practice in many ways I fear will
only harden those people who would be resistant to the new
payment models. And I would just encourage us, as we think
about this, there has to be a place for the fee-for-service
physician in the new Medicare model, in the new SGR, whatever
is the follow-on from the SGR. I always use the example of
Muleshoe, Texas, literally a one-stoplight town with one GP,
and it is hard for him to be an ACO. I mean, I guess he can
call himself ACO, but it is hard for him to be an ACO because
he is just a country doc working in a little town and he gets
paid for his services.
I think you have to allow him the ability to continue to
practice. Do you disagree with that?
Dr. Foels. I agree with your point. I think, again, there
are systems of care that are all various levels of maturity and
depths of integration across the country. Many of them will be
willing to accept a more advanced payment system early on.
Others----
Mr. Burgess. And I agree with you, but it should be their
choice. It should be their choice when they go into that
system. And if the guy in Muleshoe can't do it, we can't
exclude him because he is all they have got, correct?
Dr. Foels. And to your earlier point, too, about the
accommodation of physicians to a new system of payment, we have
probably over a century of experience in the United States with
a fee-for-service system, so it is something that everyone is
extremely accustomed to and our systems of payment are all
operationally designed around it. And we even found, in our own
experience, despite our deep collaboration with our primary
care community, that they were not immediately willing to
transition to a new care model until we profiled them under how
they would actually perform under that and we made the
methodology completely transparent. But that took an additional
year or two for them to be willfully accepting of the change.
Mr. Burgess. So that is an educational endeavor.
Thank you, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman.
Now recognize the gentlelady from North Carolina, Mrs.
Ellmers, for 5 minutes for questions.
Mrs. Ellmers. Thank you, Mr. Chairman. I appreciate so much
the opportunity to be participating in this subcommittee
hearing on SGR reform. I think that it is something that is
vital to healthcare reform into the future.
And I thank our panel for being here and giving your input
as well. I certainly associate myself with many of your
comments on best practices, Dr. Damberg, especially when we are
talking about making improvements with science-based, real
information that will actually improve our healthcare system.
That brings me, Dr. Kramer, to one of the other discussions
that was just taking place. We were talking about whether there
is room or should there be room for penalties, essentially, I
will call it that. And one of my big concerns is that many
times physicians are placed in a position because there is a
new best practice that is established, may or may not be
science based, but Medicare will require that they adhere to
that, and it may end up in a bad patient outcome, an increase
in infection rate or something else.
In your words, how would you address that? How can we avoid
that situation happening where a physician possibly may be
penalized or cannot participate in an incentive program because
there is some best practice that is put in place? How could we
address that?
Mr. Kramer. I would answer by saying that if we keep the
focus on the patient, and the results, the outcome, the
clinical outcomes to the patient and the patient's experience
in those outcomes, that will address many of the underlying
problems that currently exist. So, for example, rather than
focussing on whether a clinical best practice was followed or a
clinical guideline was followed, rigid adherence to that can
sometimes lead to bad results, the inappropriate results.
Mrs. Ellmers. Yes.
Mr. Kramer. So rather than focussing on rigid adherence to
the clinical practice guideline----
Mrs. Ellmers. It should be patient centered. Patient
outcome.
Mr. Kramer. Patient centered. What happened to the patient?
Was that best for the patient? Did it get the right results?
That is what physicians are working toward, that is what drives
them as individuals, and that is what we ought to be rewarding.
Mrs. Ellmers. Thank you. I appreciate you saying that. That
is my opinion as well.
Dr. Damberg, in the draft of our legislation that is
definitely ongoing, we are going to be taking in so much more
feedback to make sure that what we put in place is an actual
working model that will work in the real world and not just in
theory. In your testimony, you talk about the collaboration
between CMS and establishing a process where measures can be
developed between clinical specialists and correcting that
performance gap area. In your opinion, how important is this
relationship between CMS and medical providers in maintaining
that value-based performance?
Ms. Damberg. So I think for this program to be successful
CMS and the physicians have to work in a very close
partnership, and that partnership starts with the measure
development process, but it extends way beyond that to CMS
trying to figure out how to support physicians regardless of
what type of practice they are in, but I would say especially
focused on the kinds of practice that Mr. Burgess was talking
about, which are, you know, the smallish practices that may be
miles away----
Mrs. Ellmers. Right.
Ms. Damberg [continuing]. From big centers where they can
work with other partners to develop capacity. I think that
there is a lot of work that needs to go on, on the ground, to
develop capacity in practices so that they can achieve the
results that we want them to. And there are various entities in
communities across this country who are already working with
providers.
And I think that CMS should look to leverage those
partnerships with community players, and I also think that CMS
should look very carefully at private commercial health plans
who are also investing substantial resources to work with
community providers and build capacity. And I think if they
could align the deployment of those improvement resources and
work in partnership, that would be a huge help to providers.
And I think there are lots of incentives in place for that to
happen because many of the commercial health plans participate
in Medicare Advantage and are at risk financially for a quality
bonus payment themselves.
Mrs. Ellmers. Thank you. I appreciate your comments.
And I see that I have run out of time. Thank you, Mr.
Chairman.
Mr. Pitts. The chair thanks the gentlelady.
Now recognize the gentleman from Florida, Mr. Bilirakis,
for 5 minutes.
Mr. Bilirakis. Thank you, Mr. Chairman, I appreciate it.
And I thank the panel for their testimony. I have a couple of
questions.
Start with Dr. Damberg. You talk about a continuum of
performance. Should we target a percentage for performance of
quality measures? For example, should the average physicians
meet 75 percent or 85 percent of performance measures? If the
averages are above the targeted percentage, should we
recalibrate the metrics every 5 years or so to adjust the
metrics and increase the standard of care?
Ms. Damberg. So you are talking about where to set these
performance thresholds?
Mr. Bilirakis. Sure.
Ms. Damberg. Yes. So there are several different ways in
which you can establish benchmarks. One is to use national
performance benchmarks that are already in place. If you look
at the National Committee for Quality Assurance, they have many
benchmarks already for ambulatory care measures.
But there are more sophisticated methods. I would call your
attention to my testimony where I reference a report by a
statistician named William Rogers and Dana Safran at Blue Cross
Blue Shield of Massachusetts, and I am not going to go mathy on
you, but they used the beta-binomial distribution to set this.
And in essence, where they set the top threshold tends to
remain very stable over time, and it sets up sort of the
optimal performance that can be delivered safely. Because I
know one of the previous questions was around, you know, are we
going to not give physicians some flexibility around the care
they provide? I don't think we personally want to drive
everybody to 100 percent, because I think there are some
reasons why patients should not get care.
Mr. Bilirakis. All right, thank you very much.
This is for the entire panel. Do you support quality
measures tailored to specific diseases such as diabetes and
Parkinson's? And if so, how do you develop quality measures for
rare diseases? These are hard to diagnose diseases with small
populations. If we do develop metrics for specific diseases or
conditions, how do we responsibly develop measures for these
conditions when research may be somewhat limited? Whoever would
like to address it first.
Mr. Kramer. We do need to develop better measures for
disease conditions, both common conditions, unfortunately
common conditions, such as diabetes, as well as rare
conditions. I think a number of those measures already exist,
or are in the process of being developed and through the
endorsement process. I think the National Quality Forum has
done a reasonably good job of bringing together clinicians,
patients, patient-advocate groups, as well as other
stakeholders to find the best measures, encourage measure
developers to put those forward, and to build on what is
already there so that those measures are in place and are
available and the outcome results are available to clinicians
for their clinical quality improvement efforts, to teams, who
are often in a very good situation to manage the care for
someone with chronic conditions, but also to patients so that
they can identify the best providers and participate in their
care.
Mr. Bilirakis. Anyone else?
Dr. Rich. Definitely should have measures for disease
conditions. So when I was at CMS in 2008 we did an analysis of
the three biggest cost buckets for Medicare populations, and
depending on what decile of Medicare patient you were looking
at, it was always congestive heart failure, coronary artery
disease, and cancer. And you could reverse the order depending
on how old the patient was. But that represented somewhere
around 45 to 47 percent of the healthcare dollar that we spent
at Medicare. And if you are going to create disease-specific
measures you should start there, and I think that would be what
Mrs. Castor would want to hear as well.
I do think that there is a team approach to taking care of
people with coronary artery disease. Myself, a cardiologist,
PCP, all care for these patients, the same for heart failure,
and creating a robust set of measures for a disease-specific
entity like that across specialties and cross into primary
care.
Ms. Damberg. May I add one more point?
Mr. Bilirakis. Yes, please.
Ms. Damberg. I think that the other thing that I would keep
in mind is, right now we have some one-off measures, so in the
area of diabetes. I would encourage development of measures
with an entire episode of care. So if you think of hip
replacement surgery, you know, you may start in the ambulatory
setting, you transition into the hospital and then you may end
up in post-acute care. And so we need to look at this larger
bundle of measures that hang together to cut across that
continuum.
Mr. Bilirakis. Anyone else, does anyone disagree with the
disease-related measures, or specific measures?
Dr. Foels. If I could just reiterate a point that was made
earlier, that a particular quality measure does cross
disciplines. It follows the patient. And we have had some
recent experience with applying diabetic measures to
cardiologists who are also caring for those patients, and we
know diabetes is a strong risk factor for coronary disease.
And it is important that the cardiologists are also a
participant in improving diabetes care as well. It may not be
an area to which they feel they should naturally be measured,
but we feel as an integral part of an entire team that cares
for that particular chronic condition, it would be appropriate
to apply measures in that regard.
Mr. Bilirakis. I have one more question, Mr. Chairman.
Mr. Pitts. Go ahead.
Mr. Bilirakis. Just briefly. What about patients? Should
patients groups have a role or input into the process when
determining these measures?
Mr. Kramer. Absolutely, yes. Patients is why we are here.
We are here to take care of people who are beneficiaries of
Medicare. And more broadly, if it is done right for Medicare,
can help our entire healthcare system. By keeping a patient
focus, finding out what is important to them in terms of their
outcomes, making sure we have measures of those outcomes, and
then providing rewards to physicians and care teams to achieve
those outcomes, that will do what is right for the patient. If
it is done right for the patients, it will work for the rest of
us.
Mr. Bilirakis. Thank you, Mr. Chairman, I yield back.
Mr. Pitts. The chair thanks the gentleman.
Now recognize the gentleman from Louisiana, Dr. Cassidy, 5
minutes for questions.
Mr. Cassidy. Thank you, Mr. Chairman.
First, Dr. Rich, I will just say that there is a T-surgeon,
Gene Berry, that first acquainted me with your data set on
quality. Very impressed with it. I just thought about it ever
since. So let me compliment your society and my local doc who
acquainted me with that.
Mr. Kramer, I enjoyed your remarks. If you are the guy that
broke your face playing basketball, I got to tell you, man,
your hair is a little gray to be up there on the court. But
that said, you know. Listen, we do have to be patient focused.
Now, I will say that solutions in Washington tend to be
big. Affordable care organizations are huge. And as a doc who
is thinking that oftentimes you are going to have a four- or
five-person practice in which, unless you figure out how to
align the patient with the interest of that four- or five-
person practice, you are not really going to serve those
patients best.
Then, Dr. Foels, I was impressed that your organization
seems to have been somewhat entrepreneurial adapting. My
thinking is that we need something, we call it in this
legislation an alternative payment model, where you take that
entrepreneurial group of docs, whoever they might be, and you
allow them to come up with a different model that none of us
have thought about, but in their circumstances works for their
patients and for their practice better than anything else, and
that CMS, frankly, would be required to approve unless they
could show why they should not, as long as the folks doing the
model were willing to take the risk. Any thoughts on that?
Dr. Foels. Yes, I would concur. Our participation with
other like plans, regional, not-for-profit insurers that also
have deeply collaborative efforts with the community, are
moving toward--and we do that work through the Alliance of
Community Health Plans and share a lot of excellent work across
disciplines. But what we have found, although we work toward a
common goal, we have taken different approaches, and many of
those approaches have all been equally successful.
Mr. Cassidy. Yes.
Dr. Foels. But there are significant and slight differences
among them that we need to recognize are regional.
Mr. Cassidy. I totally get that. If your final outcome is
giving access to high-quality medicine at an affordable cost,
there may be different goals depending upon the practice and
upon the patients. So, one, compliments you all for doing so.
And, two, I hope this legislation enshrines that.
Dr. Damberg, one thing--I could have asked this of many of
you--one thing that has been occurring to me though, I am liver
doctor who takes of cirrhotics, I am always struck that primary
care doesn't want to touch that cirrhotic once they have
cirrhosis because it is such a fragile patient. So what do you
think, I have tried to coin a phrase called, not primary care
physician, but principal care physician. If you take someone
like a nephrologist caring for the renal failure patient, she
is really the principal care physician even though she is not,
quote, the ``primary care physician.'' Cancer doctors. Patients
with heart failure. And really trying to align a payment model
to recognize that once someone has CHF no one touches that
patient unless the cardiologist first blesses the touching.
Does that make sense? I see Dr. Rich nodding his head.
Do you all have any thoughts on this principal care
concept? Dr. Damberg, I started it with you.
Ms. Damberg. So let me ask you a question back.
Mr. Cassidy. Yes.
Ms. Damberg. Are you considering this person--hopefully
this is not too much of a value-laden term--almost like a
gatekeeper for that person's care in terms of coordinating the
management?
Mr. Cassidy. The principal care physician would then take
on the responsibilities currently ascribed to the primary care.
It just recognizes that if somebody has cirrhosis----
Ms. Damberg. Something very complex.
Mr. Cassidy [continuing]. They become the one who becomes
the coordinator, they become the hub off which everyone else
radiates.
Ms. Damberg. Yes. No, I actually think there is potentially
some value in that. I think we are looking to primary care, and
particularly medical homes, to coordinate a lot of care, but
there may be care that is sort of outside the purview of
primary care where I think it could be useful to set up someone
who would be----
Mr. Cassidy. I think if you look at Medical Advantage's
special needs programs, most of those folks are probably not
managed by primary care in an urban setting. They are managed
by some gal, some guy who happens to be a specialist in their
condition.
Mr. Kramer, from the business perspective any thoughts you
have?
Mr. Kramer. Yes, I think this makes sense. I think a term
that we actually use, informally, is accountable care
physician. I think it gets at the same thing. There is a
physician that may be a specialist, may be a primary care
physician, but for certain kinds of patients it would make
sense for the specialist to be the accountable physician for
the care that is delivered to that patient working with his or
her team.
Mr. Cassidy. So if there was a payment model in which--an
alternative payment model in which a group of
gastroenterologists would take on the risk bearing of a group
of cirrhotics pre-transplant patients, they would then become
the accountable physician, if you will, at risk, and then
coordinating the care, being the primary care doc for a group
of fragile patients. You all are nodding your head yes.
Mr. Kramer. And rewarded for the quality and the total
resources used on behalf of those patients.
Mr. Cassidy. Yes. Well, thank you for your input.
I yield back, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman.
Dr. Christensen has a unanimous consent request.
Mrs. Christensen. Thank you, Mr. Chairman. Yes, I ask
unanimous consent to insert into the hearing record a paper
from the National Senior Citizens Law Center and a letter from
AFSCME, both on balanced billing.
Mr. Pitts. Without objection, so ordered.
[The information appears at the conclusion of the record.]
Mrs. Christensen. Thank you.
Mr. Pitts. All right, that completes our first round. We
will do one follow-up per side.
Dr. Burgess, 5 minutes for follow-up.
Mr. Burgess. Thank you, Mr. Chairman.
Dr. Damberg, let me just ask you, can you discuss at all to
the extent that providers are dealing with measure reporting,
quality improvements, and financial arrangements to link
quality payment, is this something that is ongoing that you
have observed?
Ms. Damberg. So, yes, indeed. I would say the majority of
physicians, at least in primary care in this country, have
ongoing measurement reporting of some sort and payment tied to
performance. In the clinical specialty areas, it tends to be
tied to, again, the set of measures that have been identified,
whether that is care for diabetes or cardiac-type measures. In
some cases those physicians' payments are also tied to
performance currently.
Mr. Burgess. Just specifically in the primary care world,
so those measures have already been developed. Are we going
to----
Ms. Damberg. They have been developed. They are in
widespread use. Many of the pay-for-performance programs in the
private sector have actually been in operation since about
2003. So it is a long period of time.
Mr. Burgess. But do you think it is possibly to integrate
them into whatever happens in the Medicare world?
Ms. Damberg. Absolutely, and I think the CMS should be
looking to align the measures. So the ambulatory physicians are
already accountable through their health plans for the Medicare
Advantage measures. Those measures represent a really strong
starting point, and that you are basically not asking those
physicians to do something different.
Mr. Burgess. Why do you suspect that there has not been
wider involvement of that or wider institutionalization of
that?
Ms. Damberg. Of the fee-for-service side of Medicare?
Mr. Burgess. Well, on the Medicare Advantage side where it
does seem like you have got happy providers, you have got happy
patients, the cost is less. Why is there not wider adoption of
that within the Medicare system itself? Because there does seem
to be some resistance to the Medicare Advantage model.
Ms. Damberg. Well, I think if you look at the physician
value-based payment modifier program, that is essentially
trying to move down that path with physicians across the board
within Medicare. So even absent the SGR, that work is in
process. And again, I think it is going to be the primary care
physicians who are first out of the gate on that because of the
existence of measures.
Mr. Burgess. Yes, in many ways, if the SGR could not be
reformed, if we didn't have the favorable CBO score winds at
our back, it has always seemed to me that Medicare Advantage
may offer a way forward on whatever happens with SGR down the
road. Is that a fair observation?
Ms. Damberg. I think possibly. I do think Medicare
Advantage has been a leader, and it is not surprising because
much of the measure, the performance measurement work that has
gone on historically has been on the managed care side even in
the commercial sector. But even private payers recognized they
were not getting value out of the providers on the fee-for-
service side, and so they shifted those programs into play in
fee for service.
Mr. Burgess. Very well. Let me just ask a question,
generally, and anyone can feel free to answer or not. But
should the quality improvements undertaken by a physician or a
practice, should the quality improvements themselves be
included as a component of whatever performance-based payment
is adopted? If you have a doctor who realizes that at the start
of the year they are not performing as well as they might, and
improves their performance, can that be taken into account, the
fact that they have improved their performance?
Dr. Rich. Yes, absolutely, I think. And if you look at the
hospital value-based purchasing program, it is written into
that. So you can have targets, we can have absolute targets, or
you can have a quality improvement incentive. So you can't take
a low performer and expect them to get to 90th percentile in 1
year, so you ought to be able to reward them to go from the
10th to the 30th percentile as an incentive to keep trying.
Mr. Burgess. And just as a practical matter, you think that
is something that should be included in whatever follows on
from SGR?
Dr. Rich. Yes, absolutely.
Mr. Burgess. Mr. Chairman, I shouldn't do this, but I
actually want to recognize Dr. John O'Shea, who is here in the
audience. He has had a big hand in helping us get to where we
are today, and we were sorry to lose him, but at the same time,
we are grateful to have had the association in the past couple
of years where he has been so instrumental in getting this
tough problem moved along. So I will yield back my time.
Mr. Pitts. The chair completely agrees with that statement.
Thank you very much.
The chair recognizes Dr. Christensen for 5 minutes for a
follow-up.
Mrs. Christensen. Thank you, Mr. Chairman, and I don't
think I will take all of 5 minutes. But this is a little bit of
a different question. But we have not been able to fix
malpractice, do malpractice reform. And I wonder if the
panelists think that the reforms that we are talking about, and
comparative effectiveness research and some of the other
provisions could lower the risk of lawsuits and perhaps even
the cost of liability insurance?
Dr. Rich. I do. I think if you get providers to participate
in clinical registries and quality improvement programs, I
think that would be recognized, not only by insurance companies
to lower your cost, but just in general I think it would help
the healthcare system to reduce complications and reduce
lawsuits.
Mrs. Christensen. OK. Well, a lot of what we are talking
about in terms of reform relies a lot on primary care
physicians. Do you have any concerns that we are not producing
enough family physicians, or primary care physicians, or do you
think we are on target for where we need to be with primary
care physicians? And if not, what do we do until we get there?
Dr. Foels. If I may comment, I have very deep concerns
about the adequacy of the primary care physician workforce.
When, again, one steps back and thinks about a viable, vital
primary care team, it takes the discussion to a little
different level above and beyond recruiting interested
residents in a primary care professional track. I think there
is considerable work that has yet to be realized in making this
an attractive specialty.
I think the reengineering of primary care alone, and the
ease of work through efficient systems of care that will
evolve, which I hope will evolve over very short periods of
time in primary care, will again make this a very attractive
discipline. And to my early earlier comment, I think we are
still underutilizing the valuable talents of nursing staff to
provide care, and a reform payment system would be a valuable
contribution toward moving in that direction of, again,
designing a viable, vital primary care team.
Mrs. Christensen. Thank you.
Anyone else?
Ms. Damberg. I also share that concern, and I think one of
the issues that hasn't been addressed here, but I know is being
talked about is reweighting the payments such that, you know,
if we are going to talk about incentives, right now I think the
incentives in the system in terms of the payment structure
really go against going into primary care as a specialty. So I
think we need to look at ways to correct some of those
imbalances in payments.
Mrs. Christensen. Thank you.
Mr. Chairman, I don't have any other questions, so I will
yield back my time.
Mr. Pitts. All right. Chair thanks the gentlelady.
That completes our questioning. I am sure some members will
have additional questions. We will submit those to you in
writing. We ask that you please respond promptly.
And as I stated in the opening statement, we are seeking
substantive feedback on ways to complete this legislative
draft. I would encourage all interested parties to submit their
comments to the committee by next week.
I remind the members, they have 10 business days to submit
questions for the record, so they should submit their questions
by the close of business, Wednesday, June 19th.
Without objection, the subcommittee is adjourned.
[Whereupon, at 12:17 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Prepared statement of Hon. Ralph M. Hall
Mr. Chairman, I would like to commend you for all the hard
work that you have done, including the coordination with the
Ways and Means Committee, to bring us to this point where we
can have a meaningful hearing on the Sustainable Growth Rate
issue. This is a complex issue, and the stakeholders are many,
but it is an issue that we must resolve before the end of the
year.
As we move forward in this process, we are going to need to
resolve not just the important details of the ``doc fix''
issue, but also the need for spending offsets to assure that
the legislation does not have a significant impact on our
budget. In that regard, I would like to suggest one budget
savings that might be included as an offset in this bill. It is
the language of H.R.1076, which is legislation that I have
introduced along with Mr. Olson and others. Our bill would
assist political subdivision health care pools by giving
employees in these pools the same premium tax credits and cost
sharing assistance that will be available in the new health
care exchanges. But the employees in these health care pools
would only get the assistance on one condition--if they can
show that doing so would save the federal government money.
Most states have one or more of these health care pools. In
Texas, we have one for small towns and one for county
employees. In our case, the health care plans offered in these
pools are expected to be less expensive that those that will be
available in the exchanges. So keeping these employees where
they are--in less expensive plans that provide the same quality
of coverage--means that the value of the tax credit will be
less, and the impact on the federal budget will be less.
Mr. Brady, who Chairs the Ways and Means Health
Subcommittee, has asked CBO for a score of this language. When
we get that score and find out how much budget savings the
language will generate, I hope we can consider including it in
this bill as an offset.
I look forward to working closely with the Chairman on this
idea.
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Prepared statement of Hon. Henry A. Waxman
I would like to thank the Chairman for holding this
hearing. 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 Medicare Sustainable Growth
Rate formula which has been plaguing Medicare for too long.
It's clear from this and others 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.
The Affordable Care Act provided a good foundation and
charted the right path forward. Through its support for new
delivery and payment models like accountable care
organizations, bundled payments, medical homes, and initiatives
that boost primary care--it moves us in the direction of
improved quality, efficiency, and value.
I am pleased that the Chairman has reached out to us to try
to move forward in a bipartisan fashion. Our discussions so far
have been largely fruitful. The early-stage, draft legislative
language released by the Chairmen adheres to these shared
policy goals on which we've reached broad agreement.
However, thoughtfully crafting legislative language that
effectuates these goals is a challenge--one that we are
doggedly attacking in collaboration. All policies have
consequences, some are apparent and some are unforeseen (as
we've painfully witnessed with SGR). And this is precisely why
this hearing is important, but also why we need to continue to
refine, vet and develop the concepts that will move us from a
volume based system to a value based system of physician
payments.
With that in mind, there are three key challenges that I'm
interested in hearing about today: (1) Recognizing that fee for
service medicine will remain a part of our health system, how
do we best deal with incentives that drive volume at the
expense of value; (2) How do we get physicians to accelerate
the move to new delivery system models that can improve care
without compromising cost; and (3) How do we make sure we don't
throw the baby out with the bathwater--for example, CMS has
been working to build a solid array of quality measurement
programs, and has been working to develop new models--we don't
want to be starting from scratch.
I am glad to see the Chairman continuing to move forward on
this issue early in this Congress, and we look forward to
continuing to refine these policies through a bi-partisan
approach.
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Prepared statement of Hon. Frank Pallone, Jr.
Thank you Chairman Pitts. I commend you for your continued
commitment to addressing Medicare's flawed sustainable growth
rate (SGR) payment model. Over the past few weeks, our staff
have come together and had meaningful conversations on this
topic. While I have not signed on to the discussion draft
before us today, I can assure you that the Democratic staff are
still working to find a permanent fix to the SGR, and look
forward to continuing to work with the Republican staff to do
so.
As I have said before, fixing the SGR system is one of my
top priorities. For too long, Congress has passed short-term
fixes to override arbitrary cuts to physician payments
generated by the SGR formula. It is not fair for physicians or
their beneficiaries to continually be faced with uncertainty,
and these short-term fixes are not financially sustainable. It
is time for us to come together in a bipartisan manner to
repeal and replace the SGR formula.
We can all agree that the current SGR system is unstable,
unreliable, and unfair. I also believe that, broadly, we all
have the same goals for what an SGR fix will look like.
However, getting these goals into legislative language is a
complicated task. With so many moving parts, it is critical
that we fully understand the consequences of each provision and
gather views from all stakeholders. This is not a process that
should be rushed. Let's work together to make sure we get this
right.
A new payment model should focus less on volume of services
provided, and instead rely upon improved outcomes, quality,
safety, and efficiency. By focusing on these goals, we can
improve patient experience and reduce the growth in health care
spending simultaneously. While there may still be a need for a
fee-for-service option within the future payment system, a new
system must better encourage coordinated care while
incentivizing prevention and wellness within the patient.
The Affordable Care Act established a number of new
provider arrangements under Medicare, such as new Accountable
Care Organizations (ACOs), which encourage cooperation and
coordination among providers, hospitals, and suppliers, so that
patients receive high-quality, efficient, and cost-effective
care. As we work to replace the SGR, we should look to these
programs as a starting point for developing a payment model
that moves away from traditional fee-for-service and toward a
system that focuses on quality and outcomes.
I look forward to hearing from our witnesses today about
their perspectives on the best way to prioritize quality and
address the flawed SGR, and I look forward to continuing to
work with my colleagues and all stakeholders to finally find a
permanent fix.
Thank you.
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