[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]









                      DEVELOPING A VIABLE MEDICARE
                        PHYSICIAN PAYMENT POLICY

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 7, 2013
                               __________

                          SERIAL NO. 113-HL03

                               __________

         Printed for the use of the Committee on Ways and Means




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                      COMMITTEE ON WAYS AND MEANS

                     DAVE CAMP, Michigan, Chairman

SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
PAUL RYAN, Wisconsin                 JIM MCDERMOTT, Washington
DEVIN NUNES, California              JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio              RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington        XAVIER BECERRA, California
CHARLES W. BOUSTANY, JR., Louisiana  LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois            MIKE THOMPSON, California
JIM GERLACH, Pennsylvania            JOHN B. LARSON, Connecticut
TOM PRICE, Georgia                   EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida               RON KIND, Wisconsin
ADRIAN SMITH, Nebraska               BILL PASCRELL, JR., New Jersey
AARON SCHOCK, Illinois               JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas                 ALLYSON SCHWARTZ, Pennsylvania
ERIK PAULSEN, Minnesota              DANNY DAVIS, Illinois
KENNY MARCHANT, Texas                LINDA SANCHEZ, California
DIANE BLACK, Tennessee
TOM REED, New York
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
TIM GRIFFIN, Arkansas
JIM RENACCI, Ohio

        Jennifer M. Safavian, Staff Director and General Counsel

                  Janice Mays, Minority Chief Counsel

                                 ______

                         SUBCOMMITTEE ON HEALTH

                      KEVIN BRADY, Texas, Chairman

SAM JOHNSON, Texas                   JIM MCDERMOTT, Washington
PAUL RYAN, Wisconsin                 MIKE THOMPSON, California
DEVIN NUNES, California              RON KIND, Wisconsin
PETER J. ROSKAM, Illinois            EARL BLUMENAUER, Oregon
JIM GERLACH, Pennsylvania            BILL PASCRELL, JR., New Jersey
TOM PRICE, Georgia
VERN BUCHANAN, Florida
ADRIAN SMITH, Nebraska





















                            C O N T E N T S

                               __________

                                                                   Page

Advisory of May 5, 2013 announcing the hearing...................     2

                               WITNESSES

Mr. Patrick Courneya, MD, Medical Director, HealthPartners Health 
  Plan, Minneapolis, MN..........................................    63
Mr. Charles Cutler, MD, Chair, Board of Regents, American College 
  of Physicians, Norristown, PA..................................    31
Mr. David Hoyt, MD, Executive Director, American College of 
  Surgeons, Chicago, IL..........................................     7
Mr. Frank G. Opelka, MD, Vice-Chair, Consensus Standards Approval 
  Committee, National Quality Forum, New Orleans, LA.............    46
Mr. Kim Allan Williams, MD, Past President, American Society of 
  Nuclear Cardiology, Detroit, MI................................    22

                    MEMBER SUBMISSION FOR THE RECORD

Darrell Issa and Sam Farr, letter................................    97

                       SUBMISSIONS FOR THE RECORD

Alliance for Quality Nursing Home Care, statement................   100
American Society of Transplant Surgeons, statement...............   102
American Speech-Language-Hearing Association, legislative 
  principles.....................................................   107
California Hospital Association, letter..........................   109
California Association of Physician Groups, CAPG, letter.........   111
Community Hospital of the Monterey Peninsula, letter.............   112
Greenway Medical Technologies, letter............................   114
Mayo Clinic, testimony...........................................   117
Medical Society of New Jersey, letter............................   124
Medicare Rights Center, statement letter.........................   127
Monterey County Medical Society, letter..........................   132
Palomar Health, letter...........................................   133
Riverside County Medical Association, letter.....................   135
San Bernardino County Medical Society, letter....................   136
San Diego County Medical Society, letter.........................   137
Santa Barbara County Medical Society, letter.....................   138
Sharp HealthCare, letter.........................................   139
Sierra Sacramento Valley Medical Society, letter.................   141
Sonoma County Medical Association, letter........................   143
Sutter Maternity & Surgery Center of Santa Cruz, letter..........   145
 
                      DEVELOPING A VIABLE MEDICARE
                        PHYSICIAN PAYMENT POLICY

                              ----------                              


                          TUESDAY, MAY 7, 2013

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 10:06 a.m. in 
Room 1100 Longworth House Office Building, the Honorable Kevin 
Brady [Chairman of the Subcommittee] presiding.
    [The advisory announcing the hearing follows:]
    
    
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    Chairman BRADY. Good morning, everyone. The subcommittee 
will come to order. I want to welcome everyone to today's 
hearing on addressing the broken Sustainable Growth Rate 
formula by which the Federal Government reimburses our local 
doctors for treating Medicare patients. While this is our third 
hearing, the SGR has been the focal point of the first two, as 
well.
    The first hearing was on redesigning the Medicare benefit 
package to make it more rational and responsive to seniors and 
Medicare patients. In that discussion, we heard that solving 
the SGR problem is key to maintaining a strong Medicare 
program.
    The second hearing was on the Medicare Payment Advisory 
Commission recommendations for improving the various payment 
systems. In that discussion we heard that now is the time to 
repeal the SGR. I couldn't agree more with both of these 
sentiments. We need to repeal the SGR so that seniors continue 
to have access to their local doctors.
    Physicians are understandably frustrated. In our 
communities we are witnessing firsthand how the current broken 
system is forcing doctors to rethink their future with 
Medicare, consider closing their private practices, or joining 
up with a hospital. And who can blame them? The SGR is a major 
contributor to an unhealthy system, and it needs to change this 
year.
    We need to reform the physician payment system to reward 
high-quality care to patients and value to health care. The 
current fee-for-service payment system treats all services the 
same, and fails to take into account the quality of the care 
provided or how efficiently that care was furnished. This needs 
to change too.
    Building on the subcommittee's efforts in the 112th 
Congress, Chairman Dave Camp and I joined with our counterparts 
on the Energy and Commerce Committee to engage with physician 
organizations and other stakeholders on how best to achieve 
this goal. These stakeholders have provided extensive feedback 
on two iterations of the proposal that would first repeal the 
SGR, provide a period of payment stability, then reward quality 
and value by using metrics that physicians believe in. And 
then, finally, allowing physicians to voluntarily opt for 
alternative payment models if they better meet their needs.
    This hearing enables the subcommittee to hear from a few of 
the many organizations that provide a constructive response to 
these proposals. The subcommittee will benefit from their 
experience and insights.
    The hearing also provides the subcommittee the opportunity 
to hear some perspectives that complement the voice of the 
physician, especially organizations. These perspectives help us 
understand that the payment system improvements we envision for 
Medicare can be accomplished.
    More importantly, this hearing will help the subcommittee 
roll up its sleeves and get on with the hard work of developing 
a viable physician payment reform policy. And crafting this 
policy need not be a partisan exercise. While we certainly have 
our differences, permanently fixing the SGR this year is a 
shared goal. I am pleased that the Majority and the Minority 
jointly selected the witnesses we will hear from shortly. This 
is an important step in the effort to find a bipartisan policy 
solution. My hope is that we continue to collaborate as we talk 
to physicians on an ongoing basis.
    While finding the money to pay for an SGR replacement 
policy remains a challenge, the most recent Congressional 
Budget Office SGR repeal estimate surely helps. Using its new 
Medicare spending projections, CBO estimates that freezing 
Medicare physician payments at their current level over a 10-
year period would cost $138 billion. This is significant 
reduction from its $243 billion estimate for the same policy 
just a few months before.
    I do look forward to working with my friends on the other 
side of the aisle when we start talking about how to pay for 
the SGR solution. We will eventually have to go down that hard 
road, not only to pay for it, but also to address our spending 
problems. But let's put that aside for now.
    Let's work together as Republicans and Democrats engaged 
with the physicians and other stakeholders to get the payment 
reform policy right. The goal is not a perfect policy, but a 
good, sound policy. Let's craft when the bill is on the 
momentum of the dialogue that continues here today, and takes 
advantage of the more favorable CBO cost estimate. Together 
let's get it done this year.
    Before I recognize Ranking Member McDermott for the purpose 
of an opening statement, I ask unanimous consent that all 
Members' written statements be included in the record.
    [No response.]
    Chairman BRADY. Without objection, so ordered. I now 
recognize Ranking Member McDermott for his opening statement.
    Mr. MCDERMOTT. Thank you, Mr. Chairman. I think you were 
looking over my shoulder. You wrote my speech and read it.
    [Laughter.]
    Mr. MCDERMOTT. This Committee has been wrestling with the 
need to reform Medicare's physician payment system for more 
than a decade. But for a variety of reasons, Congress has not 
yet been able to send a proposal to the President. We may have 
a rocky road ahead, but I hope this year we can succeed. We 
can't afford not to.
    The Sustainable Growth Rate Formula is fundamentally 
broken. As Congress acted to override the formula's cuts, the 
hole has been dug deeper every year. And, let's be honest, no 
one ever expects that we are going to cut 30 percent in fees. 
But the uncertainty promotes profound discomfort and 
instability in the system.
    It is patently unfair to ask physicians or others paid 
under the fee schedule to live with the sword of Damocles 
hanging over their head year after year after year. And I 
understand we can't just repeal it and move to an unrestrained 
inflationary debate--or update. But the SGR's threat has 
dampened physician spending, even if it has been a series of 
dysfunctional changes, often last-minute efforts to avert 
disaster.
    Instead, we need to replace it with a sensible policy that 
reflects a more modern care delivery system. We need a policy 
that rewards quality, not quantity. We need a policy that gives 
incentives for teamwork, coordinated care, with strong primary 
care components. We need a policy that helps promote getting 
the right care to the right patient at the right time. More 
than anything, we want provider accountability.
    Now, let's be clear--and I know it as well as anybody on 
the panel--this is a difficult set of objectives. They won't be 
accomplished with one fell swoop. They are not going to be. 
There is no silver bullet in this business. But it is the time 
to take some steps forward in this challenge. We don't have to 
start over; we can build on what works and what is already 
working out there in some places. We should use physician 
expertise to develop measures, but we must have an accountable 
public actor as the ultimate arbiter.
    Looking at the--among other things, makes it clear that we 
can't afford to yield such critical decision-making to 
unaccountable or self-interested private organizations. There 
is too much at stake. The cost is still high, but it is lower 
than it has been in years. And the cost of inaction and more 
patches will be higher still over time.
    I am pleased the chairman seems to want to work together on 
this replacement policy. As he said, the choice of the 
witnesses was doing jointly, which was really a revolutionary 
experience in the House of Representatives. I don't know if it 
went on in any other committee ever before, but it is a good 
step. Next will be drafting. We hope we can do the drafting 
together.
    The chairman's outlines are a good start. But without some 
detail, we will have to find out where the common ground is. It 
is like being invited to go to three cities in Europe. I would 
like to know which city we are going to before I sign up 
totally for the trip. But I am very much involved in wanting to 
go on a trip.
    Now, given the bipartisan interest in this, I want to 
acknowledge that paying for this endeavor will likely be the 
cause of the most controversy and potential disagreement. It 
will be difficult, if not impossible, for me and many other 
Democrats to support a package that is financed by shifting 
costs onto beneficiaries, especially given that there are other 
offsets that are available.
    This policy could be entirely financed by ending a windfall 
that was created by the Congress for big PhRMA when we enacted 
the Medicare Part D. Again, the average Medicare beneficiary 
has a household income of $22,500. No one should ever forget 
that. And the average physician income, on the other hand, is 
about $180,000. I won't support Robin Hood in reverse, 
especially when people have paid into the program for 
deficits--for decades.
    But I thank the chairman for holding this hearing. But more 
importantly, I show--I thank him for showing an interest in a 
bipartisan approach. The Medicare program and the nation will 
be better for it. And I think that today's testimony--I am 
looking forward to it because it is a good start. Thank you.
    Chairman BRADY. Great. Thank you. Today we will hear from 
five witnesses: Dr. David Hoyt, executive director of the 
American College of Surgeons; Dr. Kim Allan Williams, the past 
president of American Society of Nuclear Cardiology; Dr. 
Charles Cutler, the chair and the board of regents, American 
College of Physicians; Dr. Frank Opelka, vice-chair, consensus 
standards approval committee with the National Qualify Forum; 
and Dr. Patrick Courneya, health plan medical director for 
HealthPartners.
    Thank you all for being here today and I look forward to 
your testimony. You will all be recognized for five minutes for 
the purposes of providing your oral remarks, and we will begin 
questioning after that.
    Dr. Hoyt, we will begin with you.

STATEMENT OF DR. DAVID HOYT, EXECUTIVE DIRECTOR OF THE AMERICAN 
                      COLLEGE OF SURGEONS

    Dr. HOYT. Thank you, Chairman Brady, Ranking Member 
McDermott, and Members of the Committee. I am David Hoyt, the 
executive director of the American College of Surgeons. On 
behalf of the more than 79,000 members of the college, I am 
pleased to be here today to discuss the reform of Medicare 
physician payment system, and to highlight some challenges 
moving forward that are described in greater detail in the 
college's February and April letters that have been submitted 
for the record. The college appreciates the committee's 
continued commitment to address the complex problems facing 
Medicare's physician payment system, and applaud your work in 
inclusiveness.
    In our February letter, the college outlined our value-
based update, VBU, proposal to reform physician payment--the 
physician payment system. We believe that any new payment 
system must be based on the complementary objectives of 
improving outcomes, quality, safety, and efficiency, while 
simultaneously reducing the growth in health care spending. The 
VBU proposal is based on the college's 100 years of experience 
in creating programs to improve surgical quality and patient 
safety, such as the National Surgical Quality Improvement 
Program, or NSQIP.
    We have learned that measuring quality improves patient 
care, increases the value of health care services, and reduces 
cost. The savings gained are a direct result of improving 
quality outcomes.
    We agree with the joint commission proposal that a full 
repeal of the SGR and a period of payment stability are prudent 
first steps in reforming the system, while longer-term reforms 
are developed, tested, and phased in over several years. The 
college believes that the phase one period of payment stability 
should be for five years. If we were to move to a value-based 
system, it is imperative that we make sure the payment models 
and the quality measures, which will serve as the backbone of 
the new system, are properly aligned, and that will take some 
time. The college urges Congress to provide statutory payment 
rates tied to inflation during the period of stability. Such 
stability will allow physicians to make necessary capital 
investments in their practices to move to a value-based system.
    In phase two of the joint proposal, the college believes 
that the most critical component to successfully establishing a 
base payment rate tied with a variable rate is that it 
incentivizes high-quality care and does not just function 
through a withhold. Providers willing to take on the risk based 
on performance associated with the variable rate must first see 
a starting base rate at an appropriate level to cover the work 
and expenses required to provide the necessary care. We believe 
that the base rate should be based on the market value at the 
end of five years of stability. The college further believes 
that once the starting base rate is appropriately determined, 
subsequent base rates should account for the increased cost of 
providing care by increasing with inflation.
    It is crucial that the variable rate not only require a 
level of risk by physicians that may result in a reduced 
payment, but it is--also contains a level of reward that--with 
increased payment for those physicians who achieve the highest 
quality care. The cost savings we have seen through our quality 
programs are in the money saved by the improved outcomes. We 
believe that a variable rate should be determined as to whether 
a physician meets a specific performance threshold. For a new 
system to flourish, we must encourage those high performers to 
share their techniques with those who do not meet the 
performance threshold. Whether a physician experience is an 
increase or a decrease from the base rate should be determined 
by performance, compared to standards or thresholds.
    We would like to emphasize that a zero sum budget-neutral 
scoring methodology for the variable rate could significantly 
hamper collaborative care, the sharing of best practice amongst 
providers, and hinder our ability to recognize all the possible 
savings.
    In our century of experience, the college has learned that 
the real cost savings are best realized from coordinated care. 
Numerous elements of the committee's proposal relative to 
performance measurement are strictly specialty or service-
based. In contrast, our VBU proposal, which centers on clinical 
affinity groups, breaks down the silos of physician care. The 
CAGs, which have collective quality and performance measures, 
are designed to be inclusive of multiple specialties working in 
concert to treat the patient.
    In developing quality and performance measures, the college 
believes that we must be able to provide sufficient measures 
representing all specialties. The committee's proposal on 
measure development could lead to potential conflict between 
measures that go through the NQF process and those that use the 
proposal's suggested non-NQF process. The college recognizes 
that there are challenges with the NQF approval process, but 
that--that have led to frustration among specialties and 
physicians. However, with the possibility of multiple entities 
approving measures, there exists the real possibility the 
physicians could be compared with each other, while not 
pursuing the same measure set. Alternative measure sets need 
clear evidence of effectiveness if they are to be used.
    Finally, the college believes it is incumbent upon every 
physician and health care provider to commit to being a 
responsible steward of the nation's health care resources. 
Physicians and other providers will work together to achieve 
cost savings with--and those savings cannot be constrained by 
the current financing silos of the Medicare program. As 
physicians work to bring costs down, those savings should be 
accessible to those who are achieving the savings, whether in 
Parts A, B, C, or D.
    We appreciate the opportunity to address the second draft 
of the joint proposal, and look forward to working as partners 
in forging a new patient-centric, quality-based health care 
system. Thank you very much.
    Chairman BRADY. All right. Thank you, Dr. Hoyt.
    [The prepared statement of Dr. Hoyt follows:]
    
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STATEMENT OF DR. KIM ALLEN WILLIAMS, MEMBER OF THE ASNC HEALTH 
                   POLICY STEERING COMMITTEE

    Chairman BRADY. Dr. Williams, we will reserve five minutes 
for your discussion.
    Dr. WILLIAMS. Thank you, Chairman Brady, Ranking Member----
    Chairman BRADY. Can you get that microphone, Doctor?
    Dr. WILLIAMS. Got it.
    Chairman BRADY. Thanks.
    Dr. WILLIAMS. Thank you, Chairman Brady, Ranking Member 
McDermott, and other distinguished Members of the Ways and 
Means Health Subcommittee. We thank you for the opportunity to 
testify on behalf of American Society of Nuclear Cardiology, 
otherwise known as ASNC. ASNC is a leader in education, 
advocacy, and quality for the field of nuclear cardiology that 
was founded in 1993, and represents about 4,600 physicians, 
technologists, and scientists worldwide dedicated to the 
science and practice of nuclear cardiology. My name is Kim 
Allan Williams. I was formerly president of ASNC, and am 
currently a member of the health policy steering committee.
    ASNC and many other specialty societies are encouraged very 
much by the committee's solicitation of physician input on the 
SGR repeal and the development of alternative reimbursement and 
delivery models. This partnership is very likely to lead to 
legislation that reflects the intricacies of clinical practice 
and advances best practices. To that end, I would like to 
propose that we talk a little bit about clinical data 
registries.
    ASNC was involved very much in the development of 
appropriate use criteria, in partnership with several other 
organizations, in order to reduce the number of inappropriately 
ordered and performed tests. Decision support tools such as 
guidance on the proper use of stress protocols and tracers are 
important initial steps in quality imaging, and ASNC will 
continue to collaborate in the development of decision support 
tools to assist referring physicians and nuclear cardiology 
professionals.
    To further assure appropriateness and patient-centered 
imaging, ASNC is currently establishing the groundwork for a 
cardio-vascular-imaging registry. This will begin with nuclear 
cardiology, but hopefully it will be expanded to further--other 
modalities in cardiac imaging in the future. This is a natural 
progression of prior quality initiatives such as clinical 
application guidelines, imaging procedure guidelines, physician 
certification, laboratory accreditation, and the appropriate 
use criteria.
    We do envision that the imaging registry will be a major 
instrument in allowing the development of a robust set of 
clinical performance metrics of interest to private payers, as 
well as Medicare and Medicaid, and other policy matrix. These 
metrics may add further weight to the reality that medical 
imaging is good medicine, and inform proper reimbursement and 
performance incentives. Advances in medical imaging really have 
changed the way that physicians take care of patients on a 
daily basis. And integrating medical technology into care plans 
can save costs by lowering the amount of wasteful and 
ineffective invasive testing and treatments.
    As stated, the--our hope is that ASNC can develop the 
groundwork and define initial quality metrics. The initial 
phase of the registry development hopefully is going to be the 
end of 2013, first quarter of 2014, and will be focused on data 
collection and foundational performance metrics that relate to 
radiation safety and dose protocols, timeliness of reporting of 
test results, and clinical indications, most importantly. The 
registry results will be focused on building the resources 
related to implementation of patient-centered imaging protocols 
and reporting of appropriate use.
    In subsequent phases in 2015 and 2016, ASNC intends to 
develop the capability to follow the patient through the 
continuum of care. Partnerships with other registries in the 
field of cardiology will assist this initiative. We can track 
adherence to appropriate use criteria and the result in 
treatment decisions, such that the cardio-vascular-imaging 
registry may illustrate that nuclear cardiology does affect 
downstream cost in a positive way through more appropriate 
selection of patients who need invasive and further therapies.
    We expect that the metrics that we develop will be--enable 
Congress and CMS to engage ongoing clinical improvement 
initiatives and, with this data, effectively tie reimbursement 
to these initiatives. Credit should be given for quality 
improvement initiatives that are already in place and ongoing, 
not just for new initiatives each year.
    And there should be broader, ongoing recognition for 
achieving and maintaining board certification, lab 
accreditation, performing laboratory quality assurance, and 
participation in registries such as the one proposed by ASNC. 
These are integral quality activities, and we would hope that 
annual metric updates would not ignore these ongoing quality 
measures simply by looking for new initiatives less related to 
quality. Financial incentives should be provided to physicians 
who participate in registries, receive feedback, and address 
any quality deficiencies that are discovered.
    In terms of the reward for clinical improvement of 
activities and pay for performance, we embrace the methodology 
that rewards the specialty's advancement in care and quality 
improvement activities, and we are--we expect that in a system 
of fee for service, provided that that continues, ASNC would 
propose that physicians are awarded with the highest levels 
of--when they have the highest levels of performance, an 
increment above the baseline fee schedule, and with negative 
updates for those who are not performing and not participating 
and not improving. So we are actually in favor of that concept.
    In terms of the stability of the physician reimbursement, 
the SGR framework, we applaud all of the efforts to try and 
rework this in such a way that there are not shocks to the 
system of physicians and their businesses. And we really want 
to try and replace this with quality measures that can be very 
much cost savings.
    Chairman BRADY. Great. Doctor, thank you very much for your 
testimony.
    [The prepared statement of Dr. Williams follows:]
    
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STATEMENT OF DR. CHARLES CUTLER, CHAIR OF THE BOARD OF REGENTS 
             OF THE AMERICAN COLLEGE OF PHYSICIANS

    Chairman BRADY. Dr. Cutler.
    Dr. CUTLER. My name is Charles Cutler. I am chair of the 
board of regents of the American College of Physicians. The 
college represents 133,000 internal medicine physicians and 
medical student members. I am a full-time primary care 
internist in a multi-specialty group practice in Norristown, 
Pennsylvania.
    The college wishes to thank subcommittee Chairman Brady and 
Ranking Member McDermott for convening this hearing. We also 
thank Chairman Camp and Energy and Commerce Chairman Upton for 
proposing a bold plan for Medicare payment reform that holds 
the promise of breaking a decade-long impasse on the SGR 
repeal.
    We thank Representative Schwartz for her leadership in 
sponsoring, along with Representative Heck, the Medicare 
Physician Payment Innovation Act. This bill, which we support, 
has a similar approach as the Campton-Upton [sic] proposal and 
merits strong consideration.
    The college believes that the Camp-Upton plan has four key 
elements needed to create a viable Medicare payment system: it 
repeals the SGR; it stabilizes payments; it phases in value-
based models; and provides multiple pathways for physicians to 
participate in efforts to improve quality and effectiveness. We 
request that the committee consider adding the following five 
policies to the chairman's proposal.
    First, establish annual positive baseline updates for all 
physicians for at least the next five years, with a higher 
update for evaluation and management services.
    Second, create opportunities for physicians to qualify for 
additional incentive updates on a graduated scale for 
participating in a CMS-approved or deemed value-based 
initiative starting in 2014.
    Third, create a process by which CMS could deem a private 
sector initiative to qualify physicians for graduated incentive 
payments.
    Fourth, we support rigorous standards for deemed programs 
to ensure that they improve quality and effectiveness.
    And fifth, enable practices that have received independent 
recognition as patient-centered medical homes, to qualify for 
the graduated incentive program. Thousands of physician 
practices providing care to tens of millions of privately-
insured patients have achieved accreditation as patient-
centered medical homes. Extensive data demonstrates their 
effectiveness. Yet Medicare's support for this model is mostly 
limited to several hundred practices participating in 
Medicare's comprehensive primary care initiative.
    These practices are paid their usual fee-for-service 
payment plus a monthly risk-adjusted care coordination payment 
for each patient, plus the opportunity for shared savings. In 
return, they agree to be evaluated by a robust metrics--set of 
metrics. But even for these practices, traditional fee-for-
service remains the single largest part of their Medicare 
payment.
    Medicare payment policies should also recognize the far-
greater number of recognized patient-center medical-home 
practices that are delivering high-quality, coordinated care to 
all of their patients, including Medicare practices which, 
nonetheless, receive no support from Medicare, other than the 
usual fee-for-service payment. Related, the NCQA has a new 
medical home neighborhood accreditation program for specialty 
practices that meet standards related to the coordination of 
care, creating a pathway for non-primary-care specialists 
potentially to qualify for incentive payments. The bottom line 
is patient-centered medical homes have the track record to be 
scaled up and support by Congress now.
    Finally, following five years of stable and positive 
payments during which physicians could qualify for additional, 
value-based incentive payments, Congress could set a date by 
which time physicians would be in a new payment model or a 
deemed program, or be subject to reduced annual payment updates 
with hardship exceptions excluded.
    We believe the most effective approach, however, is to 
create positive incentives for physician-led models that, when 
supported by an improved payment system, will enable physicians 
to deliver better and more effective care. Thank you for 
listening today.
    Chairman BRADY. Thank you, Dr. Cutler.
    [The prepared statement of Dr. Cutler follows:]
    
    
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    STATEMENT OF DR. FRANK G. OPELKA, VICE CHAIR CONSENSUS 
 STANDARDS APPROVAL COMMITTEE MEASURE APPLICATIONS PARTNERSHIP 
                     NATIONAL QUALITY FORUM

    Chairman BRADY. Dr. Opelka.
    Dr. OPELKA. Thank you, Chairman Brady and Ranking Minority 
Member McDermott and committee Members, for inviting me to 
participate in today's hearing on behalf of the National 
Quality Forum. My name is Frank Opelka, and I am the vice-chair 
for the NQF's consensus standards approval committee, the CSAC, 
which I will chair coming this July. The CSAC oversees measure 
endorsement and the NQF. My day job is the executive vice 
president for health at Louisiana State University and 
associate medical director of the American College of Surgeons.
    The NQF was founded in 1999 as a non-profit, non-partisan 
organization with members spanning all of health care, 
beginning with specialty society physicians, patient advocates, 
hospitals, businesses, and more. The NQF has two main roles: to 
convene its members to endorse performance measures, and to 
recommend to HHS, which measures best fit within the various 
CMS payment programs.
    I am here today because, without the NQF, we would have 
hundreds of measures from specialty societies, from health 
plans and others, bombarding physicians and hospitals with a 
sea of their favorite but very different measure preferences, 
making it untenable for me or for my hospital to report 
meaningful measures to help patients. Just imagine the 
confusion of five different measures for heart attack, one from 
each major health plan, or one from those associated 
specialties caring for the heart disease, or different measures 
for the same surgical operation. Which measure would we choose 
to report? Which result should a patient use?
    Mr. Chairman, we commend you and the entire committee for 
undertaking the critical task of reforming physician payment 
and for placing quality at the center. To focus on quality will 
only work if the measurement tools are themselves high 
fidelity. To have an impact, quality measures must first have 
physician input to establish the highest medical and scientific 
standards. That is why over 400 physicians volunteer alongside 
experts from hospitals, patient advocates, and business groups, 
joining together to total over 850 individuals volunteering to 
serve on NQF committees.
    Mr. Chairman, the measurement work of the NQF is predicated 
on delivering results that improve care, work toward 
affordability, and inform patients. Some examples of NQF-
endorsed measures have, as noted in a CDC report, helped 
promote 58 percent reduction in central line infections between 
2001 and 2009, saving more than 6,000 lives and estimated $1.8 
billion in cost. The NQF measures and physician groups across 
Wisconsin worked to lower cholesterol and improved breast 
cancer screening when compared to other physician groups 
outside the NQF across the tri-state region. NQF measures added 
in reducing mortality rates in 650 hospitals using the endorsed 
safe practices of the NQF. NQF-endorsed perinatal measures 
promoted a limit on newborn deliveries prior to 39 weeks, 
reducing the need for newborns in ICUs by 16 percent in 27 
hospitals.
    So, what does the NQF mean to me? The NQF takes measured 
developers and takes their measures and convenes specialty 
society experts, along with patients and business groups, to 
assess measures for their importance to patients, for their 
scientific properties, for their feasibility for the burden of 
implementation, and the meaningfulness to the end users: 
physicians, hospitals, and patients.
    Of the measures proposed, 70 percent are approved, with 
over 700 measures now in the measure library; 27 percent of 
those measures now are patient outcome measures. Rigorous 
standards are needed so that we don't misclassify physicians or 
hospitals, or create a misinformed market about providers. 
Improvement, quality, reduced cost, and informed patients 
deserve this rigorous NQF endorsement.
    For me, ensuring an NQF endorsement process allows for 
rapid inclusion of all interested parties, and avoids the 
confusion of 1,000 flowers blooming if too many efforts crowd 
the measure space and lack coordination.
    I seek your continuing support for this rapidly-emerging 
science of health care performance measures with the standards 
set by the NQF. The process is well balanced with experts led 
by specialty society physicians and input from business groups 
and patient advocates. The NQF continuously redesigns its 
processes with strong guidance from the medical profession, 
from those patient advocates, businesses, and from CMS. The NQF 
is the most assured means for coordinating all the voices and 
transforming our national health care through measure 
endorsement, avoiding creating confusion from competing 
standards.
    Thank you for the opportunity to provide testimony to Ways 
and Means Committee. I am happy to answer your questions and 
elaborate further on any points I have made during my 
testimony.
    Chairman BRADY. Thank you.
    [The prepared statement of Dr. Opelka follows:]
    
    
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   STATEMENT OF DR. PATRICK T. COURNEYA, HEALTH PLAN MEDICAL 
                 DIRECTOR HEALTHPARTNERS, INC.

    Chairman BRADY. Dr. Courneya.
    Dr. COURNEYA. Good morning, and thank you, Chairman Brady, 
Ranking Member McDermott, and the Members of the House Ways and 
Means subcommittee. I am Dr. Patrick Courneya, medical director 
for HealthPartners Health Plan in Minneapolis, serving 
Minnesota, Wisconsin, and the surrounding states, as well as 
the national network.
    We are a nonprofit, consumer-governed health care 
organization serving more than a million patients and more than 
1.4 million health plan and dental members. We have nearly 
50,000 members who are Medicare patients, and one of the 
nation's few five-star Medicare plans. While we operate a care-
delivery system, more than 60 percent of our health plan 
members get their care from our contracted network, which 
includes groups of all sizes.
    We appreciate the opportunity to lend our perspective on 
this important issue. I also wish to thank the Alliance of 
Community Health Plans for helping to bring our work in this 
regard to your attention.
    At HealthPartners we share the broad goals outlined in the 
SGR repeal and reform proposal. And we strongly support the 
shift from fee-for-service to value-based payment. And we 
applaud the bipartisan effort in Congress to achieve it.
    In particular, we agree that three phases, those three 
phases outlined in the proposal, provide a sensible, workable 
framework for developing a viable physician payment system for 
Medicare.
    Over the past two decades, we and other organizations in 
Minnesota have used a similar sequence to achieve meaningful 
progress toward performance-based payment reform in our state. 
Minnesota is known for having large, multi-specialty care 
systems and large, not-for-profit health plans. We sometimes 
hear that what works in Minnesota's market and its structure 
could not work in other markets. We believe strongly that is 
not the case. The elements of Minnesota's payment reform are 
replicable and scalable and provide a real-world example for 
the rest of the country, including Medicare. And, because much 
of the piloting of this work is complete, and powerful tools 
are already established, we suggest that broader implementation 
could produce results even faster than they have in our state.
    I would like to illustrate with a brief example from my own 
personal experience. I am a health plan medical director, but I 
am also a board-certified family physician with 25 years of 
clinical experience. By instinct I see performance-based 
payment through the lens of a 13-physician family practice 
clinic in Minneapolis that I once helped to run. Our small 
practice served a broad range of patients, from affluent middle 
class to first-generation Hmong, Somali, Eritrean, and Korean 
immigrants. We accepted a broad range of insurance coverage, 
including Medicare and Medicaid.
    In the 1990s, as we sought to prove our value against 
larger systems, we responded to the early cost and quality 
transparency initiatives emerging in Minnesota. At that time, 
using a paper-based system, and supported by bonus payments 
from health plans and a local health-plan-sponsored quality 
collaborative, our small clinic was able to perform as well as 
or better than the largest groups in our market on clinically-
important quality measures. We learned just how much 
improvement is possible if the market signals are right and 
support is present.
    It was an example of a small clinic system serving a 
diverse population competing on a level measurement playing 
field with the big systems, and doing well. And still today, 
some of our market's best performers are small, primary-care 
groups. More important, in the past four years these same 
groups have sustained or improved quality performance while 
working with new total-cost-of-care payment models that drive 
attention to resource use in an environment of accountability 
for quality.
    The sequence, quality and experience first, followed by 
focus on efficient resource use, is the right pathway. In our 
example, our communities would not really accept a focus on 
cost until we could demonstrate the ability to improve quality 
on measures of acknowledged importance to patients and 
clinicians. Second, until clinicians had the skills and 
experience in quality improvement, they would not be able to 
develop the confidence that they could effectively manage costs 
as these new payment models unfolded.
    As a health plan during the course of 20 years, and in 
collaboration with our contracted provider community, 
HealthPartners has used a wide variety of tools to support this 
transition to payment models that focus on improving quality 
and aligning payment to reward those who deliver high quality 
most efficiently.
    The proposal sequences the transition from current Medicare 
payment models to a similar permanent solution that rewards 
value instead of volume, and, given the scope of Medicare, this 
transition could reinforce the welcome transition already 
underway in the commercial health care finance system.
    In short, the precedent is there, the tools are available, 
and the opportunity for Medicare and the nation's entire health 
care system is enormous. We are pleased to support this 
important, thoughtful work.
    Thank you again for the opportunity to appear here today.
    [The prepared statement of Dr. Courneya follows:]
    
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    
    Chairman BRADY. Doctor, thank you very much. We are joined, 
I should note, by Representative Black and Representative 
Schwartz. Thank you both for your interest.
    Reading through the testimony--I appreciate you getting it 
to the committee well in advance so we could study it--it seems 
to be clear that you are convinced we can base payments on 
quality measures, that getting those measurements right is very 
important, the collaborative approach in which, you know, a 
physician who is isolated is going to have more trouble than 
one that is in a system that gives them timely feedback so they 
can--need to make the adjustments to quality of care, and that 
it is important that, as we create this formula, we not only 
reward physicians for improving the quality of care, but we 
also reward them for maintaining a high level quality of care, 
going forward.
    Let me start with my first question, Dr. Courneya. And I 
say to all of you I like the process that we have taken here, 
where we continue to share the framework of where we want to 
go, seek input from you in two different rounds of input. I 
hope that is working for physician organizations. I think it is 
going to create a better product at the end of the day.
    Dr. Courneya, you have been doing this for 20 years. Your 
own experience, 13-physician practice. So that would translate 
to many of our communities. One of my concerns is heaping 
another round of quality indicators and paperwork and 
bureaucracy on top of physicians who are not only struggling 
with a dramatic increase in paperwork and overhead, separate 
quality indicators from private insurance, as well. A lot of 
bureaucracy with electronic medical records.
    Can we achieve this without adding more burdens on to local 
physicians? And your experience at HealthPartners, have you 
focused on the key indicators that matter, rather than a 
laundry list that may have various value?
    Dr. COURNEYA. Boy, we sure have tried to. And I think one 
of the consequences of an engaged and collaborative approach to 
doing this is that the provider organizations in our community, 
in our marketplace, have held us accountable to a commitment as 
health plans in our market to use those agreed-to measures, not 
create the kind of confusion that can occur with 
HealthPartners, Blue Cross Blue Shield and Medica and others in 
our marketplace have little variations on the same general 
principles.
    We have agreed, as a market, on things like comprehensive 
diabetes measures, where actually achieving the goals and the 
clinical targets for those patients is the objective. But we 
all use those same measures as the foundation for any quality 
improvement incentives that we put in place.
    We also think it is important to have both process 
measures, those things that indicate whether or not you are, on 
a day-to-day basis, reliably delivering care in the ways that 
we know are clinically and scientifically sound, but also 
outcomes measures that are reflective of what is important to 
patients, as well.
    Chairman BRADY. And that varies, I understand, looking at 
the graph you sent us, that varies by type of medical care 
provided. Is that right?
    Dr. COURNEYA. That is correct.
    Chairman BRADY. Good. Did physicians within the practice--
do they have practices where they tend to focus on one or two 
of those types of medical conditions, versus a broad range that 
would require you to keep up with just a laundry list of 
indicators?
    Dr. COURNEYA. Well, you know, it has evolved, actually. As 
a primary care physician, we don't really have the luxury of 
focusing on just one topic, although, as we phased this in, we 
did get our feet wet, we got our skills up to speed, based on, 
in our case, diabetes measures. Because we could create systems 
that reliably sustained performance on diabetes, we could then 
move on to other things like cardiovascular disease 
preventative services, and actually manage a pretty long list, 
but do so in a way where the systems that supported us in doing 
that worked well. And we did that in a system that didn't have 
a big, multi-specialty thousand-member physician group to do 
it.
    Chairman BRADY. I am not a fan of Washington picking out a 
regional model, injecting it full of bureaucracy, and deeming 
it for the reset of the country. But clearly, your experience 
shows that there is the foundation in place that we can learn 
from. Is your belief that we can take approaches like yours, 
and put them in place in Medicare in a reasonable time frame?
    Dr. COURNEYA. Yes, I think this is a nice combination of a 
privately-developed but collaborative approach to doing this 
work. And we do think that one of the real values of that is 
that provider groups could look to the health plans who were 
driving towards a consistent signal in terms of clinical 
quality, and the kind of incentives that they put in place, and 
take the risks to make the changes that they needed to drive 
towards better performance on those selected measures. Anything 
that CMS can do in those regions--and I think that those 
regions exist all across the country--to reinforce those 
signals without interfering with some of that work that is 
going on, would be a delightful translation of that work into 
improving quality for the patients who are served by CMS and 
Medicare.
    Chairman BRADY. Great. I also--actually, I have a boatload 
of questions for all of you. But for the sake of time, let me 
yield to Dr. McDermott.
    Mr. MCDERMOTT. I suspect the chairman and I and all the 
committee have a boatload of questions.
    All of you have said, one way or another, that we are going 
to be involved with the fee-for-service system for quite some 
period of time. It is not going to go away with a snap of the 
finger. And we all know that. So, the question is, how do we 
make a transition that makes sense in the delivery of health 
care, as well as fiscal sense to the United States Congress who 
is paying for it? That is really the trouble, or that is the 
balance that we are struggling for.
    And I would like to hear from you, because we look at all 
these things and we look at how fee schedules have been 
developed since 1992--prior to that, Medicare was fee-for-
service, you send in your fee and we will send you whatever--
then we put in the fee schedule. And since then, we have had 
this continual question about how much we are paying. And I 
would like to hear from you what you think are the best 
measures by which you decide how much you pay.
    Now, we heard a little bit about the quality--National 
Quality Forum. And the question of whether somebody should set 
a standard outside and it be applied nationwide, or is it 
something that we let everybody decide on the basis of whether 
the patients like what they--what is the quality standard you 
are going to use that will make the most sense in trying to pay 
on the basis of quality, rather than quantity?
    Because treating a diabetic patient is somewhat different 
than treating a patient--a pediatrician who teaches a mother 
how to be a new mother and breastfeeds and all those things 
that go on in a pediatric office is not the same as adjusting 
the amount of sugar that an endocrinologist does. So how do you 
set measures that make real sense? I would like to hear all 
your ideas, starting with you, Dr. Courneya. You have been 
trying it.
    Dr. COURNEYA. Yes. Actually, one of the things I would like 
to say about the NQF endorsement process: that tends to turbo 
charge our work, because that lends credibility to the 
providers in our community, so that that is an important part. 
Total cost of care measure that we have in our marketplace is 
one example of that, and that has been a really powerful 
engagement tool.
    I do think that we need to have the flexibility to be able 
to understand that different broad categories of providers will 
have different focus areas where the quality metrics are most 
important. And so, for instance, in pediatric clinics, those 
kinds of measures that reflect effective management of the 
common conditions in pediatrics, the preventative services that 
they provide, whereas with family medicine it is going to be a 
different suite of measures. But they are all relatively short 
in number. And for each individual specialty, they can be 
manageable. And we have done that, and we have seen it happen 
in our marketplace.
    I also think it is important--before we can go and give 
attention to total cost of care, as I said in the statement, we 
need to be able to credibly prove that we are paying attention 
to clinical quality in measures that are meaningful. We also 
have to pay attention to issues of access and satisfaction.
    The truth is that it is only through establishing a long-
term relationship with my patients that I am going to have the 
kind of opportunity to have a real impact on their health over 
time. And both clinical quality and satisfaction are part of 
what cements that relationship over time. And it is important 
to recognize.
    Mr. MCDERMOTT. Are the data that you get right now from--or 
that Medicare makes their decision, is it good data? Do you 
think we are gathering the right data?
    Dr. OPELKA. Well, so----
    Mr. MCDERMOTT. It is open to all of you, so jump in.
    Dr. OPELKA. So from the National Quality perspective, we 
have been moving across different data streams. Beginning with 
claims data, it is at least a start to get a certain aspect of 
performance measurement on the table. But as you move through 
different payment systems, you have to map the different--the 
quality metrics and the goals within that system to different 
sets of measures.
    As we are moving in the NQF and we look at what is 
happening with clinical data, rather than claims data, with 
clinical registries, rather than non-registry-based data, we 
move the performance measurement system into a much more robust 
system. And so, moving from a claims-based system for 
performance measurement in the real clinical data drives much 
higher fidelity in the performance measurement world. And then, 
if that maps to a payment system, we push those together.
    Dr. HOYT. Yes. I would like to speak to this from the 
standpoint of a surgeon trying to participate in quality 
assessment for payment, but all of the other things that they 
need to participate in. And what we found is that registry data 
is critical. Claims data is probably inadequate for a lot of 
the things that, ultimately, they need to participate in.
    And, for example, the joint commission requires that you 
demonstrate that you have ongoing practice performance 
assessment. That is a standard. And to be able to do that, you 
need to individually credential each physician every two years 
and a cycle in between. Maintenance certification for board 
certification requires now submission of data based on your 
practice that is reflective of your actual practice, and your 
qualification to then sit for subsequent examination is based 
on that kind of data. PQRS, or performance data that could be 
quality linked, also needs registry data.
    So, what we are doing to anticipate that and, really, to 
your question, Chairman Brady, in terms of how to sort of 
lessen the burden for physicians, we are trying to collect data 
that can be used for all of these things, so that in the 
context of practice, a physician is collecting patient data 
that is relevant to all the regulatory and payment things that 
they participate in. And it is actually very straightforward.
    So, we have developed, for instance, a physician or a 
surgeon-specific registry that allows multiple things to be 
achieved at the same time. And it makes it, then, very 
straightforward.
    Chairman BRADY. Great. Thank you. Mr. Johnson.
    Mr. JOHNSON. Thank you, Mr. Chairman. Dr. Courneya, is 
Medicare and Medicaid paying you when you send in a request?
    Dr. COURNEYA. Yes, they are.
    Mr. JOHNSON. Are they really? All the time?
    Dr. COURNEYA. Well, as far as my business office tells me.
    Mr. JOHNSON. Okay. I am especially interested in your 
assessment that small practices could do well in your payment 
system. Could elaborate on this point and give some examples?
    Dr. COURNEYA. Sure. That--you know, that is an important 
issue to me, personally. I grew up in northern Minnesota, a 
small community. And so, it is really important to me that 
solutions that might work in a population-concentrated area can 
find a way to translate into small group practices or 
individual practices. In fact, in our marketplace, some of the 
top performers in clinical quality are actually those who are 
single, solo practitioners, which is, to me, a refreshing 
signal that we are getting it right.
    The way it works, actually, for us, is that those folks in 
those environments are as engaged in the collaboration around 
clinical quality and learning from others in the marketplace 
about how to change the way they practice. And by supporting 
them in those transitions from the current model practice to an 
alternative payment model, we have seen really important 
improvements.
    I think that those small communities, those one or two-
physician practices, are actually the ones most burdened by the 
current fee-for-service model in some ways, because the only 
way their business can get any payment for work that they do is 
for them to be on the treadmill, running as fast as they can. 
And any alternative ways of delivering those care--that care 
that they may see, they can't do because the payment model 
isn't flexible enough to let them do that.
    So, we actually think that these kinds of payment models, 
supported with the kind of infrastructure and the kind of 
transitional support that we have used in our marketplace, can 
really have an impact, both in inner city, concentrated areas 
as well as rural communities. And we have seen it working.
    Mr. JOHNSON. I am impressed by what HealthPartners has done 
to evolve its payment system to support and reward quality of 
care. I appreciate the description of how you have done it and 
how it works for small physician practices. I realize your 
system must work for physicians for you to have come this far. 
But I would be interested in hearing your thoughts on what a 
contract physician would say if asked about his or her 
experience with HealthPartners.
    Dr. COURNEYA. Well, there is a couple of things. First, let 
me reflect back on what I first said back in the early 
nineties, when some of this stuff started to march out.
    I wasn't terribly happy, to be honest. The idea of 
transparency around my performance implied that maybe I wasn't 
performing as well. What is worse was, when we did actually do 
that measurement, I found out that I wasn't, our clinic wasn't, 
and, in fact, the general community wasn't performing as well 
as they thought they should. So the early reaction is very 
similar to many of the things that we have heard.
    Right now, I am actually quite proud of the fact that I 
think that we, as a health plan, have really very positive, 
productive relationships and, in fact, have worked very hard to 
make sure that financial performance around our contracts 
reflect a shared set of objectives and a shared stake in 
success. So, I think that, after that time of collaboration, we 
have had good success.
    Mr. JOHNSON. Well, what did you change to make it better?
    Dr. COURNEYA. Well----
    Mr. JOHNSON. Because you said you weren't satisfied with 
it.
    Dr. COURNEYA. Me, as a physician? Well, first of all, when 
I saw that we weren't performing as well as we could, we 
started to actually track and understand our patients. All we 
had was a spreadsheet and a paper record. And we used very 
simple tools to track and follow up on patients after they had 
left the office, and help support them.
    One of the things that is important--was important for me 
to realize, is that sitting in an exam room as a physician, the 
plan that I gave them may not necessarily translate into 
something that they can actually do. So we got much more 
involved in making sure that when we were recommending, we were 
giving them support to actually be able to execute on. So, by 
extending our relationship to our patients to that period of 
time between the visit, we were able to make a big difference 
in the quality outcomes. And we did so with very simple 
approaches.
    I am very excited about the way things are evolving right 
now, because I feel as if the tools to be able to do that in 
service to our patients are just exploding now, and it is a 
very exciting time for that, I think a real opportunity for us 
to be able to demonstrate improved quality at the same time we 
can pay attention to the thoughtful use of the resources.
    Mr. JOHNSON. Great. Thank you, sir. Yield back.
    Chairman BRADY. Thank you. Mr. Kind.
    Mr. KIND. Thank you, Mr. Chairman. I want to thank you for 
holding yet another, I think, very important hearing. I want to 
thank the panelists for your testimony today.
    Dr. Courneya, I have been through your facilities in Hudson 
and New Richmond, and I commend the work that is being done 
there. It seems as if you have been quite successful in being 
able to marry up the quality and the cost metrics, trying to 
drive for better outcomes at a better price. And listening to 
your opening testimony, too, it sounds as if you believe this 
is sustainable and can be transferred, broad based, throughout 
the system. It is not just something unique that you are doing, 
but something that is translatable to other areas. Is that 
true?
    Dr. COURNEYA. Yes, yes. We think so quite strongly. In 
fact, one of my favorite examples is in western Wisconsin. I 
was on the board of directors for the Osceola Medical Center 
for several years and got to know folks there and over in 
Amery, Wisconsin, as well. And as a part of a collaborative 
framework, a number of the critical-access hospitals got 
together and decided on how they would serve their communities 
with a cancer treatment center that was a shared resource. What 
that did is it created a resource for treating cancer patients 
that was shared, that did not duplicate the investment 
unnecessarily, and produced a rural solution to a very real 
problem that was disrupting the lives of those patients in ways 
that was unnecessary.
    So, I think that is a great example where the model, 
focused on efficient use of resources and high-quality care, 
can really have an application----
    Mr. KIND. I would love to follow up with you on that. I am 
co-chairing the Rural Health Care Caucus with Kathy McMorris 
Rodgers, too, and I think the unique needs that exist in rural 
America, too, is something we can't neglect in that.
    But, Dr. Opelka, NQF. Is that becoming the standard? Are 
people looking to your organization as the standard bearers as 
far as quality measurements and outcomes? And how are you 
getting the buy-in?
    Dr. OPELKA. Yes. The value of the NQF is the rigor of 
making sure we don't misclassify. That is the biggest risk when 
you get in this performance measurement business. If the 
measures aren't adequately tested and they are put out there 
and we misclassify a physician or we misclassify a hospital, we 
misdirect patients.
    So, it has been a rigorous process, it has been an 
evolution. We have been getting faster at how we do it, which 
is making the standard more usable, friendlier. But it is 
really that dedication to the science and the rigor, so that we 
avoid misclassification. And we have seen it from measures that 
have not gone through the process where they end up with 
creating a misguided end result.
    Mr. KIND. Sure.
    Dr. OPELKA. So we are wedded to that as a standard.
    Mr. KIND. And I didn't hear anyone on the panel mention the 
value-based modifier. It is a work in progress right now 
through CMS. It will be fully implemented by 2017, so it is 
just around the corner here. Does anyone have any thoughts as 
far as what is going on with the value modifier? Concerns with 
the direction that it is taking right now?
    [No response.]
    Mr. KIND. The physician-based value modifier. Dr. Cutler, 
do you know what----
    Dr. CUTLER. Sure, I know about it. The ACP is not really 
prepared to object to it at this point. Our position is that 
payment reform should move towards team-based care. So the 
value-based modifier would not really be necessary if we could 
get to more of a team-based care model.
    Mr. KIND. Right, yes. Anyone else have any thoughts on a 
physician-based modifier? Dr. Hoyt?
    Dr. HOYT. Yes. I think, you know, the context is ultimately 
what will be selected to be the component measures that judge 
one specialist versus another specialist, or primary care 
versus, you know, team care might be appropriate for primary 
care.
    Mr. KIND. Right.
    Dr. HOYT. In some circumstances. But for a surgeon it might 
be your surgical infection rate, your DVT prophylaxis 
measurement, your compliance with bundles of safety in a 
hospital, so a very different kind of measure set. I mean we 
see that as really the prototype for how this whole quality 
linked to payment would actually exist.
    Mr. KIND. Right.
    Dr. HOYT. And the details of the VBU are still, you know, 
being worked out, but the concept is to link quality measures 
to payment, and that is, I think, the----
    Mr. KIND. I couldn't agree with you more. You know, we 
see--from CBO just a couple of months ago, the recalculation of 
the cost in SGR, they might be fleeting, because they are going 
to do another recalc this month, I believe. So we will see 
where they end up. We will see where they end up with all of 
that.
    But it seems that we have got to change the incentives so 
it is value-based, not volume, so that we are paying physicians 
based on the quality of work, and not how much work they 
ultimately do.
    And, Dr. Courneya, I believe your physicians are salary-
based. Is that correct?
    Dr. COURNEYA. You know, actually not.
    Mr. KIND. Oh, no?
    Dr. COURNEYA. In our medical group it used to be that way, 
partly as a consequence in the change in the way payment 
occurred over the 1990s and into the 2000s. We did go to a 
production-based compensation. We do have--a substantial 
portion of that compensation, though, is related to clinical 
quality outcomes, and we drive that into our culture quite 
deeply.
    I do think that we can align the incentives properly, we 
can create a situation where we have shared objectives and 
shared trajectories, whether we are payer or providers or 
patients who we are responsible for.
    And I do think, also, that as long as the signals are 
directionally consistent, as long as the measures are 
parsimonious in terms of not driving providers crazy, we can 
create strong, directional market signals that can make a big 
difference and will actually create an opportunity to transform 
the way we pay for care over the course of the----
    Mr. KIND. I would love to follow up with you and see how 
you are accomplishing that, because--and also how much risk the 
physicians are actually taking on themselves.
    Dr. COURNEYA. Yes.
    Mr. KIND. But, Mr. Chairman, I see my time has expired. 
Thank you.
    Chairman BRADY. Thank you. Mr. Roskam.
    Mr. ROSKAM. Thank you, Mr. Chairman. Mr. Chairman, we have 
three colleagues on our committee who have one thing in common, 
and that is they went into medicine as physicians when medicine 
was attracting the best and the brightest. That is Dr. Price, 
Dr. McDermott, and Dr. Boustany. I kind of have a lot of fun 
lumping the three of those together, and they are not sure if 
that is a compliment. I mean it as a compliment.
    But teasing aside, I come from a family with three siblings 
who are physicians. And what I have observed is that the joy of 
going in to medicine has been--largely been ground out, 
basically, by these larger systems. And it is incumbent upon 
us, if we are going to be dealing with the physician shortage 
that is looming, we have got to figure out a way to bring the 
joy of medicine back into medicine, and to bring the buoyancy 
in that sense of healing, as opposed to check the box and 
feeling very defensive about the whole environment.
    There is one statistic that I think it is important for us 
to be mindful of, and that is provided to us by the Association 
of American Medical Colleges. And they project that we are 
going to be facing a physician shortage in 2020--which is just 
around the corner--of at least 91,000 physicians. And that is 
going to grow in another 5 years, 2025, to 130,000 physicians.
    Dr. Courneya, can you give the committee a perspective of 
you, as a physician and the physicians that you are interacting 
with, on two issues that are sort of looming? One has been sort 
of well litigated, no pun intended, and one is upon us: that 
is, defensive medicine, to the extent that it actually drives 
your behavior and has an adverse impact on the doctor-patient 
relationship; and if the tort liability system were somehow 
changed, would that create a better system? Is it overstated? 
Is it understated? Can you give us your perspective, as 
somebody who is treating patients?
    And the other is, how significant is the Independent 
Payment Advisory Board that is going to be coming in with the 
Affordable Care Act? Can you give us your perspective?
    Dr. COURNEYA. Sure. A couple of thoughts. First of all, 
just on the best and brightest, I have the great pleasure of 
actually meeting a lot of the new folks coming in. Still 
attracting them, and that is really exciting.
    Mr. ROSKAM. That is good.
    Dr. COURNEYA. I think one of the things that has ground joy 
out of medicine is that treadmill that everybody is on that is 
in response to the way the market is set up as it exists right 
now with fee-for-service payment.
    With regards to the medical liability, you know, that is 
also something that seems to me to be varying, based on the 
marketplace. In our own marketplace, liability is not really a 
very big issue. And so, speaking to it from our experience, all 
I can say is that it is not a big part of what is on the table. 
I can't speak to the way that affects people emotionally in 
other marketplaces. I know it does. And I know that even in our 
marketplace, it is in the back of our mind.
    One thing I would say, though, is that in our experience, 
well supported with information, physicians with the time to 
have conversations with their patients actually feel a lot less 
concerned about that. And I think also that patients feel a lot 
less concerned about that, as well. It is really the rapid pace 
and the situation that we are in right now, where we don't have 
the time to understand the patient's needs, from their 
perspective, so that when we come up with a plan for care it is 
properly matched to those needs.
    With regards to the IPAB, you know, I think there is a 
broader question about having available information. And this 
really comes from my perspective as a family physician. There 
are so many treatments out there that I don't have good 
information to sit down with my patient and make decisions 
about which ones are the most efficient, the most effective, 
and match them best. So, regardless of the source of 
information, I think we do need, whether it is a result of 
private or public effort, we do need information about how 
things work, one compared to the other.
    As far as the specific solution, I think it is more general 
direction that I am most interested there.
    Mr. ROSKAM. Dr. Williams.
    Dr. WILLIAMS. Thank you. I would like to comment on the 
concept of defensive medicine. As an imager, it has long been 
discussed that there are unnecessary tests that are being done 
in the name of defensive medicine, where folks are afraid that 
if they tell a patient, for example, who comes in and asks for 
a test that, no, it is really not indicated, that if something 
bad happens to that patient, that they will get sued. And so 
this has been scored by CBO, multiple millions of dollars, and 
that has been going on for quite a while.
    We are, as the American Society of Nuclear Cardiology as 
well as the American College of Cardiology, are both in favor 
of indemnification of physicians for following guidelines that 
are accepted. That is, if we are able to use the appropriate 
use criteria and be able to tell that patient or the physician 
who is ordering a test that this test is really not indicated 
and we are okay with that, then we really shouldn't have to pay 
the penalty on the other side for following good guidelines. So 
we are very much in favor of that.
    Mr. ROSKAM. Thank you. I yield back.
    Chairman BRADY. Great. Thank you. Mr. Blumenauer.
    Mr. BLUMENAUER. Thank you, Mr. Chairman. I very much 
appreciate the range of opinions presented here today. And 
actually, the certain coherence about it, in terms of looking 
forward to something that is a more coherent and effective way 
to reward effective practice of medicine. I think this is 
something that we need to continue pushing forward on. I have 
my own personal bias, that the cost of this is overstated, 
because every single year we kick it down the road. We are 
never going to implement the cut to the SGR unless there is a 
breakdown in the system. So I am, at some point, hopeful that 
we can wipe the slate clean and move forward with you.
    I would like to begin, if I could, Dr. Courneya, your--
because I come from a community in metropolitan Portland, 
Oregon, where I think the practice patterns are very similar to 
what you enjoy in your service territory and particularly in 
metropolitan Minneapolis.
    Your comments about the difference it makes for people to 
be able to communicate and understand that--in each case I get 
the sense that a lot of people in the medical profession are 
harried, they don't have the time they want, which leads, 
perhaps, to default testing for whatever reason. It is one of 
the reasons that I personally have been on a crusade for the 
last five years to have the Federal Government pay physicians 
or other medical professionals to talk to patients that face 
end-of-life situations and their families, so they know what 
they are getting into, and that their wishes, regardless of 
what they may be, are enforced.
    I am curious to have your observations about how much time 
is going to be necessary to be able to make this transition 
using some of the indications that you have, and others that we 
are working on, to be able to make that transition from volume 
to value.
    And maybe, Dr. Courneya, if you could start, and other 
observations about what the time frame--how quickly could we do 
this right?
    Dr. COURNEYA. Again, I will reflect back on some experience 
in the 1990s, partly to make a point. Again, at that time, with 
nothing but a paper-based system and a spreadsheet, within five 
years we were clearly performing on multiple measures at a 
level that was consistent with our biggest competitors in our 
marketplace. So we were able to do that with very basic tools 
and attention to the process, and also with a mental framework 
that distributed the work for doing that stuff to a broad team, 
so it reinforces the comments that we have heard earlier about 
team-based care, making a lot of those conversations more 
possible.
    In the context that we are in right now, particularly 
because many markets in this country have learned how to do 
that, and given the tools that we have available now that are 
much more robust than we had back then, I do think that that 
three-to-five-year time line to building the skills, to be able 
to demonstrate the ability to deliver on quality, and setting 
the stage for delivering on quality, sustaining that 
performance, and then giving good attention to resource use, is 
possible.
    Mr. BLUMENAUER. Within the context of the Affordable Care 
Act. Other observations, gentlemen? Dr. Hoyt?
    Dr. HOYT. Yes, I would like to comment, because I think to 
really accelerate the pace of what you are asking for, we 
really need to invest in information systems. And I don't mean 
the electronic medical record, per se. I mean data registries, 
data to physicians. And we need to then incentivize, in 
addition to individual physician behavior, we need to 
incentivize collaboration, or physicians working together to 
common solutions, that come out of the data that they examine. 
Those two elements are really the two major features that lead 
to change.
    And so, if you can invest in them and incentivize them that 
is what we are seeing with our registries and our 
collaborators. So that when you can get a group of physicians, 
a group of hospitals to work together, they have data that they 
can review together, they will come together and share and move 
toward a best practice, they do it automatically.
    Mr. BLUMENAUER. Doctor----
    Dr. HOYT. And the biggest inhibition is the finances behind 
that.
    Mr. BLUMENAUER. Dr. Cutler, did you want to comment?
    Dr. CUTLER. I would just add it is the position of the ACP 
that--the American College of Physicians--there are hundreds of 
practices, thousands of doctors, that have now incorporated 
team-based care, the patient-centered medical home, into their 
practices. Those practices, because of the team-based nature, 
can provide the services that you speak about. The physicians 
have the time to talk to the patients about the complex nature 
of their illnesses. And other members of the team can also 
supply medical information to them. So, there are enough 
practices, in the view of the ACP, that we could begin 
implementing these programs and incentives right now.
    There are so many different fits that some are ready to go, 
some are two-thirds ready to go, some are one-third ready to 
go. And it is our belief and part of our testimony that as soon 
as 2014, we could roll out these systems, rewarding folks who 
are more mature in the market at a higher percent than those 
who are halfway there, and still allow enough time for the 
small practices and the practices that have not become team-
based over the next four to five years to develop those team-
based models.
    Mr. BLUMENAUER. Thank you. Thank you, Mr. Chairman.
    Chairman BRADY. Thank you. Dr. Price.
    Mr. PRICE. Thank you, Mr. Chairman. And I want to join 
those who are commending the chairman and our staff for putting 
together this hearing. I think this is extremely important. And 
I want to commend all of the panel members. As a fellow 
physician, it is a hard time for docs out there taking care of 
patients. And I want to commend each of you for what you are 
doing to try to improve the system and move it in a positive 
direction for patients.
    Language is important. And a number of folks have used the 
word ``reimbursement'' for what CMS does to physicians caring 
for Medicare patients. I would suggest that the SGR formula is 
not a reimbursement formula. It is a payment system. And it 
often times doesn't cover the costs of providing the care. So 
we are not reimbursing docs for a thing; we are paying them for 
something, and sometimes it works and often times it doesn't.
    I want to just touch on a different topic, but Dr. Williams 
mentioned utilizing especially society guidelines as an 
affirmative defense in a court of law to end the practice of 
defensive medicine. We have been working on this for a number 
of years. And thank you for that note, and look forward to 
continuing to work with each of you on getting us to a system 
where we can end the practice of defensive medicine, which I 
believe--and others--wastes hundreds of billions of dollars.
    I think it is always important we talk about patients when 
we are talking about health care. And patient access to care 
right now is being compromised, I would suggest, because of the 
system. One in three physicians in this country who are 
eligible to see Medicare patients have decreased or limited the 
number of Medicare patients that they see. One in eight 
physicians who is eligible to see Medicare patients no longer 
sees any Medicare patients. This is a system that is broken and 
is in dire need of fixing.
    So, I want to concentrate on two specific issues. One is 
flexibility and two is the transition time that each of you--I 
think at least four out of five of you--talked about. Dr. Hoyt 
and Dr. Cutler, I would like you to comment on--I think there 
need to be some pressure valve outlets for docs in the system 
right now, because it is so--often times so onerous and 
oppressive. One of those is patient-shared billing, or balanced 
billing, or private contracting, voluntarily, outside of the 
system, and still allowing physicians to stay in Medicare and 
patients to stay in Medicare. Is that something that ACS and 
ACP support? Dr. Hoyt?
    Dr. HOYT. Well, I would say that we support it as something 
that needs to be explored in greater detail, just as you 
suggest. And, you know, I think it may be the right model for 
certain kinds of care. It may be the right model for certain 
physician elements. But it is just not clear, and so----
    Mr. PRICE. More flexibility----
    Dr. HOYT [continuing]. I think to talk about it broadly, 
rather than looking--and study it in context that would be the 
appropriate way to do it.
    Mr. PRICE. Dr. Cutler.
    Dr. CUTLER. My answer is similar. The ACP does support the 
concept. We would like it tested, initially. And we want to 
determine that patients are protected----
    Mr. PRICE. Understand the----
    Dr. CUTLER [continuing]. In a way----
    Mr. PRICE. Yes, you know, I appreciate. And we look 
forward----
    Dr. CUTLER [continuing]. That patient care wouldn't be 
compromised.
    Mr. PRICE [continuing]. To working with you on that, yes.
    Dr. CUTLER. But thank you.
    Mr. PRICE. Let me talk about--Dr. Williams.
    Dr. WILLIAMS. Just one quick comment, an inner city doctor 
from Chicago and now Detroit, working in safety net hospitals, 
that balanced billing would actually help us, because there are 
certain patients who would be able to pay the balance and would 
help us take care of the people who are really not able to pay 
at all. And it may not be the intent of the Medicare system to 
do that, but it certainly would help us.
    Mr. PRICE. Thank you, thank you. Now let me switch to the 
transition, because we--most folks have talked about a period 
of time of transition. I think five years, as many of you have 
stated, is an important period of time. During that transition, 
though, I hope that it is not just a period of time to then 
impose another formula that again doesn't work. Shouldn't we 
get the quality measures, and all of those things, correct? 
Shouldn't that be our goal during that time of transition? Dr. 
Courneya, maybe?
    Dr. COURNEYA. I think the work on the quality goals is an 
important first step in getting the skills necessary to know 
that you can grapple with problems like that. So, you know, 
that has to be a particular point of attention.
    But I think perhaps balance too, by the fact that in the 
commercial market some of these shared savings and other 
alternative forms of payment are beginning to unfold, that the 
five-year time frame is one that matches pretty well with what 
is unfolding in the marketplace well right now.
    And so, the idea of being able to pay attention to a 
resource use and grapple with that issue is one that, because 
of what is going on in the private insurance marketplace, 
physician groups are beginning to build the skills to do that, 
and they are being able to see the value of both that broad 
view that timely claims information can give, combined with 
that narrow but deeper view that their own medical records can 
give, as a really good foundation for making that transition 
rather rapidly.
    Mr. PRICE. Dr. Cutler? Cart before horse?
    Dr. CUTLER. If you look at the hundreds of thousands of 
practices that have gone through NCQA certification, those 
high-level, patient-centered medical homes have built in many 
quality parameters. So I think some of the data is out there.
    And if you also look at the results of practices that are 
patient-centered medical homes, we are seeing that hospital 
admissions are down huge percentages, readmissions are down, 
costs are down. So the patient-centered medical home, I think, 
has built in some of the quality measures successfully that you 
are referring to. And the result is that costs are down. 
Patient satisfaction and professional satisfaction among those 
physicians is also quite high.
    Mr. PRICE. Thank you.
    Chairman BRADY. All right, thank you. Mr. Pascrell.
    Mr. PASCRELL. Mr. Chairman, thank you for this hearing. And 
each of the participants have been excellent, excellent.
    Mr. Chairman, though, I wanted to clear up one thing that 
Dr. Price was getting into, if I may. From every account that I 
have seen, private contracting threatens the very health of 
America's senior citizens and people with disabilities. When 
out-of-pocket costs increase, patients will visit doctors less, 
obviously. These arrangements outside of Medicare would only 
deter beneficiaries from seeking preventative and other care 
until their illness worsens. Now, every report I have seen--and 
I look at other reports, but I--that is my conclusion. So we 
have heard some specific recommendations. Want to transform--we 
want to transform the system as it exists right now.
    As you know, Mr. Chairman, in 2009 the Democrats passed a 
permanent fix for Medicare physician payment, H.R. 3961. So I 
think our position is pretty clear. But I must commend you, I 
must commend Ms. Schwartz, and those people who have put some 
proposals on the table, because there is a lot of common 
factors when you look at all these recommendations. I hope that 
we can, with your help, get to the resolution. Because this 
cannot be hanging over our heads for the rest of the year or in 
years to come.
    It is obvious that there is some kind of an agreement that 
the current formula is undermining the Medicare program. It is 
threatening physician participation and beneficiary access to 
care. So we can't afford these short-term patches.
    Drs. Cutler and Courneya, many of you know in the reform 
bill we included a national health care work force commission, 
worked very hard on that, to get it into the bill. And 
associated grants to help states improve their efforts to 
promote an adequate health care work force, not only among 
doctors but also among nurses and assistants. We can't ignore 
the growing shortages of doctors, nurses, and allied health 
professionals. While payment changes can help, there is much 
more we can do.
    I mentioned we took some very important steps under the 
Health Care Reform Act. Very seldom is it referred to--of 
course we are always dealing with the sexy stuff on the top--
and realizing that there is a lot of good stuff in there, too. 
This is particularly true when it comes to primary care 
professionals, and I think you would agree with me.
    So, both of you, can you talk about programs that advance 
primary care practice, if there is anything your organization 
is doing to address health work force issues?
    Dr. CUTLER. Speaking for the American College of 
Physicians, you have touched on something we are very concerned 
about. And, sure, primary care has a shortage right now, and 
the students and the residents, as they come out of training, 
have huge debt. The debt drives their decision away from 
becoming a primary care doctor.
    So, we are encouraged by any program that lessens that 
medical education debt, whether it is loan forgiveness, working 
in an under-served community somewhere in the country so that 
the debt can go down. And we would encourage more activity 
along those lines. Anything that can be done that would lessen 
debt, in my view, would increase the number of young doctors 
becoming primary care physicians. It is in their heart, they 
want to do it. But they are coming out of training with a 
mortgage and no house.
    Mr. PASCRELL. Thank you. Dr. Courneya.
    Dr. COURNEYA. Well, I think even at least as important as 
that is that they need to step into practices where there is 
that joy that was alluded to earlier today.
    I had the pleasure of talking before the National Health 
Policy Forum a couple of weeks ago on workforce issues for 
health care. And the reason that I was there was because we 
have been doing quite a bit work to transform that team-based 
model. And in the context of that change, what we have found is 
that physicians can actually see and manage a larger population 
of patients, they can do so well supported by an extended team 
of providers. And our satisfaction in practice within our own 
medical group from 2005, when the only thing that we had that 
was up in the high area was satisfaction with prior 
authorization process, ironically, has now gone from about the 
25th to 35th percentile up to the 85th percentile as a 
consequence of changing the way physicians work in that 
practice.
    We are now in a position in our own medical group where 
primary care docs are eager to come to us looking for work, 
because they recognize that joy is possible. And that is what 
is going to draw people into the profession.
    Mr. PASCRELL. Thank you. In conclusion, Mr. Chairman----
    Chairman BRADY. Thank you.
    Mr. PASCRELL. Mr. Chairman, I just want to bring 
attention--we don't have--my time has run out--on the specialty 
area, where it is a prolonged illness. And particularly 
something I worked on for a long time, and some of us at the 
panel, brain injury. And specifically in terms of what we are 
talking about today, we need to take a very, very special look 
at. And I know the NKF has been moving in some direction along 
those lines. This is a very serious problem in our country. 
Thank you.
    Chairman BRADY. Thank you, Mr. Pascrell. Mr. Buchanan.
    Mr. BUCHANAN. Thank you, Mr. Chairman. This is a very 
critical hearing. And as we move forward on SGR, I can't think 
of anything more important. I think there is a general 
feeling--I love this feeling, the idea, on a bipartisan basis, 
that we can really deal with this once and for all.
    I am in a district in Florida, like many districts in 
Florida, 70, 80 percent of the revenues for many of our docs 
are Medicare-oriented. So it is important. That is the way they 
keep the doors open. In my district alone, 180,000 seniors are 
on Medicare. So it is a very high percentage. But I would say, 
again, it is not just my district, it is many districts that 
are in Florida.
    So, I can tell you with our docs, the uncertainty that 
SGR--this has created for them over the last five or six years 
since I have been here is enormous. It is not that we might not 
get it addressed, but they are trying to make capital 
investments over a period of 5 or 10 years, and the fact that 
it is constantly looming over there with a 20, 30 percent cut, 
is huge.
    I would also just say that as someone that has been in 
business for 30 years, there is nothing--and I say nothing--
more important than getting this right. Because this--the doc 
here knows that pay-for-performance, however you want to 
measure it and look at it, that creates the behavior in the 
firm. I had 1,200 employees before I came here, and the one 
thing I wanted to get right from the top to the bottom is 
getting that pay plan right. And that is what we are talking 
about right here. Because what you measure is what--the 
behavior you are going to get.
    So, I guess I would ask the docs to start off--just my 
first--my own observation--I think it is very applicable here--
is the fact that this idea--we have got to make sure we take 
the time, the thoughtfulness, as much idea as we can get from 
yourselves and others to get this right. And, Dr. Hoyt, do you 
agree with that?
    Dr. HOYT. Let me give you an example. The way you can take 
data that is developed by registries and use it to effect 
behavior is as follows. If you graph it and put each provider, 
each physician on that graph, there is some on the right that 
are performing not as well as those on the left that are 
performing better. Those people on the right, when they see 
that and you make that data available to them, by the virtue of 
their commitment to their patients and improving as physicians, 
they want to move in the direction of improving. And so that is 
why data is such an important and powerful tool to get behavior 
aligned with, ultimately, quality.
    If you then add to that their opportunity to come together 
and learn from each other, so that the ones that are performing 
less well can learn from the ones that are performing well, 
then you affect behavior change----
    Mr. BUCHANAN. Thank you. Dr. Courneya.
    Dr. COURNEYA. Yes. You know, it is really kind of joyful, 
remarkable acceleration that you see. If the incentives can be 
properly aligned so that quality improvement--and the measures 
are properly selected so that not only is the incentive 
aligned, but the incentive and the objectives are aligned with 
the personal mission that physicians bring to practice, then 
you begin to marry that important financial element with what 
is, I think, a much more powerful motivator, and that is the 
desire to do well by your patients.
    My mom lives in Florida. The issue of transparency and the 
availability of information for her about what care she can get 
is important to me. And any role that CMS can play in making 
that performance what we can expect across all markets is one 
that I am very excited----
    Mr. BUCHANAN. Doc, let me ask you, or just in general, W.C. 
Deming said that if you can't measure it you can't manage it. 
And I also want to be careful because, at the same time, I have 
always said you can't measure 48 things. What are the key 
things that need to be considered and measured going forward, 
you know, for docs across the country?
    Dr. COURNEYA. Well, you know, actually, there is one 
measure that I thought was particularly transformational for me 
in practice, and that was the comprehensive diabetes measure. 
The reason that was important is because there were five 
elements that we had to perform on. And it wasn't just 
measuring, it was actually getting our patients to goal for 
those five elements. We knew that we couldn't achieve that 
unless we really changed the way we approached care.
    So, I think that there are certain high-impact measures 
like that that are important. Cardiovascular disease is another 
one. It is the place where the money is. It is also the place 
where the human suffering is. And so, selecting those in ways 
that create the kinds of force that requires substantial change 
is really important.
    Those are the two that come to mind. But there are a number 
of others. I would say preventative service is a----
    Mr. BUCHANAN. Dr. Cutler, I have just got a few minutes. 
Any--your thoughts on either of those questions or 
observations?
    Dr. CUTLER. It is really tough, is the answer. Every 
patient I see is a little bit different. And so, sure, there 
are some very common diseases like diabetes, hypertension, 
hyperlipidemia. But getting down into the weeds on that and 
listing the specific ones is really difficult.
    But I do want to go--come back to a practice that is 
patient-centered that is a high-level functioning, patient-
centered medical home, by very definition has many of the 
quality metrics built in to that certification. And those homes 
are doing quite well in terms of, as I said earlier, hospital 
readmissions, hospital admissions, cost of care. So I think the 
essence of the answer lies in team-based care and certified 
medical homes.
    Dr. COURNEYA. Right----
    Mr. BUCHANAN. Thank you, Mr. Chairman, and I yield back.
    Chairman BRADY. Thank you. Representative Schwartz.
    Ms. SCHWARTZ. Thank you. And thank you, Mr. Chairman, for 
holding this hearing and this series of hearings, but 
particularly for this panel. We don't always have a panel that 
is so much agreement. So really very pleased to see the 
consistency of both intention that we should repeal this SGR 
permanently, and replace it with a new payment system that does 
reward quality and outcomes, improved care, and cost 
containment. And many of you have talked to the fact that we 
can begin to measure it, and we can do this well, and 
particularly with the kind of work that has been done already 
in delivery system reforms, both in the private sector and 
through Medicare innovation center, Medicare and Medicaid 
innovation center. I thank you for participating in this and 
really getting it done out there in a real world, as we say.
    But how we pay makes a difference, and can either encourage 
this transition and this transformation in the way we deliver 
care, improving health care for Medicare recipients, or not. 
Makes a big difference. I would contend many of you talked 
about--and I want to thank Dr. Cutler, who is here from my 
district, actually, and practices in Norristown, Pennsylvania, 
lives in my district, and ACP has been very, very helpful, as 
many of you have, in helping me write that legislation to 
create a payment system for doctors under Medicare. I hope we 
get that done.
    There is a lot of agreement and common ground on this. And 
many of you have really articulated what we have to do, which 
is to repeal SGR, provide some stability and updates for 
physicians, focus on primary care--I haven't talked about that 
as much, that is going to be my question--and really move over 
the next five years to move more physicians--really, the 
majority of physicians in this country--to a system with a 
variety of models for--that could be--really incentivize that 
kind of quality and value-based purchasing of care. So, I thank 
you for what you are doing and moving in this direction.
    I did want to focus on just two things, if I may. You 
talked a good bit, many of you, about--particularly Dr. 
Courneya and Dr. Cutler, thank you for talking a lot about 
team-based care models, particularly about the transitions of 
care and the--what happens to patients when they leave your 
office or leave the hospital and--when you thought you did all 
the right things and gave them their instructions, and, lo and 
behold, they didn't all understand them and do it all exactly 
the way you thought they might, and leaving out that time. It 
turns out to be pretty critical, in terms of cost and 
readmissions and care.
    So, I wanted to ask two questions, if I may. And that is if 
you could talk a little bit more--I will start with Dr. Cutler, 
but think Dr. Courneya might want to mention--talk about this, 
as well--the focus on primary care and how important that is to 
helping enable all specialists and all physicians and all 
primary care physicians to actually provide the right kind of 
care to patients, and the degree to which we have to or should 
be making sure that we focus on both increasing reimbursements 
and then also just making sure that the models that we move 
forward on actually include primary care. That is my first 
question.
    And then, secondly, about the ability of the system to 
really move in this direction in the next four to five years, 
and whether we--your point about--I would ask you whether we 
should get started right now to make that happen.
    So, both those questions. And, Dr. Cutler, if you would 
start.
    Dr. CUTLER. Thank you, Representative Schwartz. Obviously, 
we have a huge shortage in this country on primary care 
physicians. And what is it that patients really want form their 
doctor? Well, they want the opportunity to talk to the doctor. 
They want the time. And the current system, which takes us 
back, really, to the opening comments from Chairman Brady, is 
that the current system is volume-driven. And it de-emphasizes 
time. So I think the solution that we have to aim for is one 
that rewards the ability of the doctor and the patient to sit 
and talk together, and to decide what is best for their care.
    Team-based care, in my view, takes us right to the finish 
line on that. And it does it in a way--and we are seeing it 
across the country--that is really very cost-effective. Primary 
care services drive costs down.
    Ms. SCHWARTZ. Right.
    Dr. CUTLER. And, obviously, if you are treated for 
osteoporosis by a primary care doctor, your incidence of hip 
fractures has gone down. It is very expensive to take care of a 
hip fracture. It is considerably less expensive to treat 
osteoporosis. You can go through a whole series of diseases, 
and many cancers could be cured, discovered very early, and we 
won't need all of these expensive chemotherapeutic agents and 
radiation treatments and surgery.
    So primary care is really the answer. It is a financial 
answer, it is an answer for the patients, because they 
appreciate it. And finally--and this was mentioned earlier--
professional satisfaction, the satisfaction among the doctors 
and the members of the care team, is the highest of any model. 
It is considerably higher, and it gets away from all of the 
complaining that doctors do about not having time. So, I think 
the answer lies in patient-centered care and team-based care.
    Ms. SCHWARTZ. Okay.
    Chairman BRADY. Thank you. Mr. Smith.
    Mr. SMITH. Thank you, Mr. Chairman, and certainly thank you 
to our panel here today. Just going over some of my notes here, 
and biography statements for our panel here, I see FFS, NSQIP, 
ACS, ASNC, NQF, CSAC. Of course we are talking about SGR in a 
place called D.C.
    [Laughter.]
    Mr. SMITH. But I only mention that because I think it is a 
reflection of some well-intending efforts of those associated 
with government to try to create a better situation. And yet, 
SGR, although well-intended, has not been impacting the 
situation as we would prefer. And it is very compelling when I 
hear that patients themselves--for which there is no acronym 
description--are seeing reduced access because of the obvious 
fiscal realities that exist. And that is without the next wave 
of health care reform efforts that I already sense are seeing 
some resistance.
    So, with that said, I also know that we are seeing some 
consolidation in health care, physicians kind of leaving their 
independent practices to join larger practices, whether or not 
under hospital umbrella or not. And I am concerned that 
patients may not benefit from these changes.
    And so, if you could perhaps elaborate when you take the 
consolidation issue, whether it is in rural areas or urban 
areas as well, what is the impact with SGR, whether you think 
it does not have any relationship whatsoever or patients should 
not be concerned or providers themselves should not be 
concerned. If any of you would like to, respond. Dr. Cutler?
    Dr. CUTLER. Well, the ACP doesn't have policy on this. But 
just personally, I have been on both sides of the fence. I was 
self-employed, I owned my practice for most of my career. Just 
recently I have begun to work for a small hospital network.
    I think the key really lies in the physicians, whether it 
is a two-doctor group or hundreds of doctors, the physicians 
being able to make the decisions that are best for their 
patients. So it--in a network like mine, which has a great deal 
of physician input into the decisions that are made from a 
business standpoint, I feel quite comfortable working there. If 
the physicians are not in charge, I would worry about a system 
like that.
    Mr. SMITH. Dr. Williams.
    Dr. WILLIAMS. Yes. Thank you, Representative Smith. As a 
imager, again, on the hospital side, university side, I have 
watched the influx of physicians that--during this 
consolidation. And the concern is that, as Medicare has 
decreased payment to the fee schedule less than the hospital 
outpatient payment system, it drives people in to a system that 
ultimately costs Medicare more money. It does cost the patient 
more money to come away from their physician to a major 
facility, in terms of travel and time. But, more importantly, 
it takes away the on-site freedom of practice sort of 
environment that has allowed the imaging to flourish and to 
help people.
    Now, obviously, some things had to be reigned in. There was 
a time when there were--that nuclear cardiology probably 
sitting at this table only because of this--it was the number 
one Medicare expenditure. That was about 2004, 2005, before the 
fees were cut dramatically. The volume has gone down, largely 
because of appropriate use criteria and getting people to 
certify in their specialty, and to make sure that labs were 
accredited. That was the MMA of 2010, that if you are not 
accredited, you are not allowed to do nuclear cardiology and 
other imaging.
    And so, the quality measures really can impact in a 
positive way how much Medicare spends. Thank you.
    Mr. SMITH. Dr. Hoyt.
    Dr. HOYT. You know, I think, you know, in specialty care, 
particularly in surgery, we are seeing a trend toward 
employment as one form of this. And when you add to that, then, 
bundling of payments to entities or systems as a potential 
reimbursement model, you know, you create a--on the one hand, 
some real advantages so that somebody that is part of a bigger 
system doesn't have the investment costs in electronic medical 
records, they may feel less burdened by liability in a more 
protected environment.
    But I think the concerns about being able to perform at a 
quality level are really the same, so that we really need the 
same tools to be able to motivate people to perform quality 
care.
    Mr. SMITH. Very briefly, Dr. Courneya?
    Dr. COURNEYA. Yes, it really depends on why they are coming 
together. We are going to see examples of groups that come 
together with the objective of serving patients well and 
competing in an environment where quality and good use of 
resources is the reward. They are going to do great. We are 
going to see examples of individual, single-physician practices 
who also do great in that environment.
    We are also going to see examples of people coming together 
to exercise leverage that may not be as good. It really depends 
on their objectives, and whether they are led in a way that is 
in the interest of the patients.
    Mr. SMITH. Very good. Thank you. I appreciate--and 
certainly it is my objective that this panel doesn't come, or 
anyone else doesn't come, between you and your patients.
    Thank you, Mr. Chairman.
    Chairman BRADY. Thank you, Mr. Smith. As we wrap up, one, 
thank you very much for all five of our witnesses being here. 
Your experience and ideas are very helpful.
    Dr. McDermott and I had very quick question, very briefly, 
and it goes to the point of if collaboration is important, 
timely feedback is important, a team-type of practice is 
important, I understand--we understand how that works in the 
Twin Cities. How does that work for a rural doctor? How do you 
fit a rural doctor that may have another physician in town? May 
not be isolated hundreds of miles, but in that type--how does 
this fit for them?
    Dr. CUTLER. The American College of Physicians recognizes 
the difficulty that the doc or doctors in a small community 
have, certainly with support resources. And it is for that 
reason that we think we need five years to transition into 
these new models of care and payment.
    Thankfully, the Internet exists. A lot can be done through 
electronic technology. But the fact is that many of these 
practices are one or two doctors. They are on a very tight 
operating margin, and they need time to transition into new 
models. So we think it can be done. We think perhaps the 
recommendation from the College of Surgeons dealing with 
affinity groups might help the small practices. If given the 
time, we can make it work.
    Chairman BRADY. Very quickly, Dr. Hoyt.
    Dr. HOYT. Yes. Well, just to add to that, I think we are 
seeing also some exploration of regionalization, which is 
probably good for certain types of patients. And vice versa, 
larger systems in urban areas supporting rural practices to 
provide them back-up, so that they really can feel comfortable 
practicing in isolation.
    Chairman BRADY. So it can be done.
    Dr. HOYT. Yes.
    Chairman BRADY. Your answer.
    Dr. HOYT. Yes.
    Chairman BRADY. A reminder, any Member on the panel wishing 
to submit a question for the record will have 14 days to do so. 
If any questions are submitted, I would ask the witnesses 
respond in a timely manner.
    We are committed to finding a sound solution, permanent 
solution, reliable solution for the SGR this year, and we are 
committed to working together toward that.
    With that, the meeting is adjourned.
    [Whereupon, at 11:53 a.m., the subcommittee was adjourned.]
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