[Congressional Record (Bound Edition), Volume 151 (2005), Part 21]
[Extensions of Remarks]
[Pages 28177-28178]
[From the U.S. Government Publishing Office, www.gpo.gov]




   INTRODUCTION OF THE MEDICARE PHYSICIAN PAYMENT REFORM ACT OF 2005

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Tuesday, December 13, 2005

  Mr. STARK. Mr. Speaker, throughout this year, myself, my colleagues, 
and our staff have been bombarded by physician lobbyists desperate to 
prevent a 4.4 percent reduction in Medicare payments scheduled to go 
into effect in January 2006. While I can empathize with their desire 
for more money--who doesn't want a raise?--I think it's time that we 
quell this fevered pitch with a dose of reality and a few facts. That 
is why I am introducing the Medicare Physician Payment Reform Act 
today.
  Without Congressional intervention, physician fees will decrease 4.4 
percent next year and an estimated 5 percent reduction for many years 
thereafter. This is due to what is widely agreed upon to be a flawed 
formula in the payment system known as the sustainable growth rate 
(SGR).
  That being said, it is important to note that even if the cuts go 
into effect next year, total spending for physician services would more 
than likely increase. This is because physicians have been steadily 
providing more services, and more intensive services, in recent years. 
While some growth may be desirable--for example providing additional 
preventive services--data show that much of the current growth has no 
clinical benefit or may even be harmful. Although I agree that our 
current SGR mechanism is flawed, I have serious reservations about 
repealing it without putting something in its place that will account 
for the increase in volume and intensity of physician services in 
Medicare.
  At the same time physician groups and members of Congress have been 
focused on the SGR, other issues with the physician fee schedule have 
emerged, including the accuracy of pricing for primary care services. 
These issues, although less well known, are critical to maintaining 
beneficiary access to high quality care. It has been 14 years since the 
current reimbursement system was implemented. It is time for Congress 
to receive an evaluation of how well this system is meeting its goals. 
In our effort to find a permanent solution to the SGR, we should not 
miss an opportunity to address these underlying issues.
  Medicare Physician Payment Reform Act calls on the Medicare Payment 
Advisory Committee (MedPAC) to conduct a comprehensive review of the 
physician payment system, including recommendations on the accuracy of 
Medicare pricing and alternatives to the SGR. To allow time for MedPAC 
to complete their work, the bill provides for a 1.5 percent increase 
for the next 2 years for physicians.
  The bill also provides two important additional components. First, 
the bill protects beneficiaries from Part B premium increases that 
would otherwise result from the physician update. Second, it repeals 
the so-called ``45 percent trigger,'' which was created in the Medicare 
Modernization Act of 2003 to restrict Medicare's general revenue 
support. If this

[[Page 28178]]

trigger is left in place, physician increases will force a counter-
productive, cyclical effort to cut Medicare spending.
  Given problems with potentially unjustifiable increases in volume and 
intensity of physician services, coupled with other perverse financial 
incentives in the system, repeal of the SGR is irresponsible and 
unaffordable. Likewise, the status quo is unacceptable. It is clear 
that problems with the physician fee schedule go far beyond the 
difficulties of the SGR, and Congress needs expert guidance to find 
solutions.
  Congress has become quite proficient at short term solutions to 
Medicare physician payment problems. Unfortunately, this near-sighted 
view comes at the expense of other Medicare changes that could directly 
improve benefits or decrease costs for Medicare beneficiaries. This 
bill lays out a plan for a permanent solution enabling physicians to 
count on fair annual payment adjustments. It's better for physicians, 
patients and the American taxpayer.
  Numerous proposals have been introduced to find solutions to these 
payment problems and such a fix is included in the Senate version of 
the pending budget reconciliation legislation. The concept of pay for 
performance is also heavily promoted as a potential solution, though 
everyone should admit that it would take many years for it to be 
implemented and prove effective.
  I think it's imperative we ask the experts for their recommendations 
before acting, while at the same time ensuring access is maintained and 
beneficiaries are protected. The Medicare Physician Payment Reform Act 
of 2005 will provide the intellectual foundation to enable Congress to 
enact a thoughtful, permanent solution for the physician reimbursement 
system by 2008. I urge my colleagues to consider this approach as the 
best alternative to ensure that physicians are appropriately paid and 
beneficiaries are protected.

                          ____________________