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Senior fellow Robert Berenson, testifying before the House Ways and Means Health Subcommittee on physician payment reform options in Medicare, argued that long-term approaches need to include bundled payments as an alternative to traditional fee-for-service payments, especially for primary care physicians caring for patients with chronic conditions. Because these reforms are operationally challenging and will require demonstrations of effectiveness, Berenson also suggested reforms to the existing resource-based relative value scale (the basis for the Medicare Fee Schedule) that could be implemented immediately.
Chairman Stark, Mr. Camp, and members of the Committee:
I appreciate the opportunity to provide testimony to the Health Subcommittee on a subject I have been deeply involved with through most of my professional career. I practiced internal medicine for over 20 years, 12 of which were in a group practice just a few blocks from here. I was the first representative of the American College of Physicians to the American Medical Association's Resource-Based Relative Value Scale (RBRVS) Update Committee (RUC). In the last part of the Clinton administration, I had operational responsibility for the Medicare Physician Fee Schedule at the Centers for Medicare and Medicaid Services (CMS). Finally, in recent years as a senior fellow at the Urban Institute, I have had a chance to study how well the Medicare Physician Fee Schedule has worked and what might be done to improve it.
I believe that this is an important hearing because the focus of the hearing is not on how to use marginal dollars (1 to 2 percent) to try to influence physician performance or on paying third-party disease management organizations that are separated from the physicians actually providing the medical care to beneficiaries with chronic conditions, but rather on how the program might better spend the 100 percent base of physician spending, which is now approaching $60 billion. It is important to explore the likely effects of these newer approaches to improving quality and efficiency on beneficiaries, physicians, and the Medicare program overall.
The hearing is also important because it signifies that the budgetary pressure of finding a solution to the shortfall created by the cumulative deficit, which the sustainable growth rate (SGR) formula produced, should not occupy all the time and attention of health policymakers. Indeed, as I will try to make clear, I believe that greater attention to how we spend the base of $60 billion can provide both short-term and long-term improvement to the financial bottom-line and ease some of the current SGR pressure. In recent months, very constructive ideas, including some presented at today's hearing, have been raised. I hope to contribute to that discussion in my remarks today.
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The views expressed are those of the author and should not be attributed to the Urban Institute, its trustees, or its funders.
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