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House Medicare Payment Bill Could Be Ready This Summer

By Emily Ethridge, CQ Roll Call

June 5, 2013 -- House Republicans said they are continuing to move ahead with legislation to replace Medicare's physician payment system but will wait to negotiate some of the more contentious issues.

Rep. Joe Pitts, chairman of the House Energy and Commerce Health Subcommittee, said the panel remains "on track" and continues to work with Democrats and members of the Ways and Means Committee on a replacement measure.

"We'll have something out there by the end of July for everybody to work on over August," Pitts, R-Pa., told reporters after a subcommittee hearing last week.

Energy and Commerce Republicans recently released an updated version of their plan to replace the current payment formula, known as the sustainable growth rate. The draft legislation was left incomplete, lawmakers said, so they could get more feedback from provider groups and other stakeholders.

For example, the draft measure lacks a means of covering the cost of repealing the SGR, which the Congressional Budget Office estimated would cost $139.1 billion over 10 years.

"We intend to avoid the error made in years past of discussing how to pay for reform before the policy is developed," said full committee Chairman Fred Upton, R-Mich. "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 for a vote."

The Republicans' draft would replace the SGR with an enhanced fee-for-service system while also allowing providers to opt out and participate in alternative payment models. The first phase would repeal the SGR and provide a period of stable payments, and the second phase would tie fee-for-service payments to meeting quality measures.

Witnesses recommended that the first phase last three years in order to give providers and the administration time to collaborate on identifying quality goals and methods of measurement.

Cheryl Damberg, a senior policy researcher and professor at the Pardee RAND Graduate School, noted that while primary care services already have a number of quality measures that are ready to use, clinical subspecialties need more time to develop those.

William Kramer, the executive director for national health policy at the Pacific Business Group on Health, said the system should try to give providers feedback on their performance as quickly as possible so they can make productive changes.

Del. Donna M.C. Christensen, D-V.I., asked about how to ensure that providers who see the most medically challenging patients can still participate in the new care models and receive incentives. Damberg suggested giving providers rewards for reaching each increment of improvement and aligning those incentives across a group of providers.

Subcommittee Democrats said they supported the goals of replacing the payment system and generally agreed with the Republicans' approach, although some said the discussion draft did not go far enough.

"It doesn't provide us with any real direction on payment reform," said Florida Democrat Kathy Castor. "It will keep us wedded to the SGR and that poor public policy of temporary patches."

She said she preferred a bill (HR 574) from Pennsylvania Democrat Allyson Y. Schwartz and Nevada Republican Joe Heck that would put more emphasis on moving physicians to new payment and delivery models. Schwartz also told reporters this week that the Republicans' draft outline was "disappointing."

GOP committee leaders emphasized that they would continue working with Democrats and members of the Ways and Means Committee to develop a formal legislative proposal. The most recent draft reflected discussions with committee Democrats, even though it did not have their names on it, Upton said.

California Democrat Henry A. Waxman, the ranking member of the full committee, said in a written statement that the draft legislation follows shared policy goals on which they have broad agreement.

Republicans on the Energy and Commerce Committee and the Ways and Means Committee first released a framework to repeal the SGR in February, and they outlined additional details in April. Both committees have held hearings on the issue.

The Senate Finance Committee has held hearings on replacing the payment formula, but lawmakers there have not yet released legislation that would do so.

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