WASHINGTON (FRONTLINE MEDICAL NEWS) – Legislators on the Health Subcommittee looked to physicians and health care providers for ways to pay for a repeal of the Medicare Sustainable Growth Rate formula at a hearing Jan. 22.

The subcommittee is looking “at opportunities for pay-fors” to fund the already-agreed-upon bipartisan legislation to permanently repeal and replace the SGR, according to Rep. Joseph Pitts (R-Pa.), Health Subcommittee chairman. The panel’s ranking member, Rep. Gene Green, (D-Tex.), noted that he didn’t mind looking outside of health care to cover the estimated $140 billion cost of repeal.

Dr. Barbara L. McAneny, chair of the American Medical Association Board of Trustees, said that her organization needed more guidance from the subcommittee before leaders could recommend specific offsets.

The issue “is a very difficult one because, within the health care sector, so many people are struggling now just to keep their doors open to their patients, that for us from within the health care sector to really come up with a specific pay-for may not be as useful until there are some guidelines set up by Congress,” Dr. McAneny testified. “What are the rules of this particular budgetary process? How do we fit those things within that? I think the AMA stands ready to assist and help by weighing in on any given suggestions, but I think we are very uneasy and feel that we don’t really have the ability to give you specific pay-fors.”

Her testimony drew sharp criticism from Rep. Larry Bucshon, (R-Ind.).

“I would just implore you to really reconsider that and the AMA reconsider and maybe help us rather than waiting for other options and coming out and saying up or down, we disagree or we agree,” Rep. Bucshon said. “If you are going to offer an opinion at the end, then you should be part of the offering solutions on the front side. … If you are just going to wait and be a critic and not offer solutions yourself, to me that’s not very helpful.”

Others testifying before the subcommittee noted that despite the committee being open to all avenues to finance the SGR bill, Medicare would likely bear some of those costs.

“The [ American Hospital Association ] cannot support any proposal to fix the physician payment problem at the expense of funding for services provided by other caregivers,” AHA President and CEO Richard Umbdenstock testified, adding that the organization “cannot simply oppose payment cuts without supporting other solutions.”

Mr. Umbdenstock highlighted four solutions that the AHA supports: combining Medicare Part A and Part B with a unified deductible and coinsurance; higher premiums for beneficiaries coming into Medicare as well as means-testing for premiums; altering incentives to first-dollar coverage for Medigap so that beneficiaries will be more aware of how they are choosing the health care they need; and medical liability reform.

Mr. Umbdenstock added that these suggestions have general bipartisan support and “would not only generate savings, but also put the Medicare program on firmer financial footing for years to come.”

Eric Schneidewind, president-elect of AARP, also offered a number of solutions to the committee and suggested that maybe Congress does not need to fully fund the SGR bill.

“In light of current and future savings in the Medicare program, Congress would be justified in not fully offsetting the cost of a permanent repeal at this time,” Mr. Schneidewind said. He also added that legislators could consider expansion of competitive bidding for durable medical equipment, equalize payments based on physician site of services, be more aggressive in collecting overpayments to Medicare Advantage plans, increasing transitional care and chronic care management, and encourage the use of all highly skilled clinicians.

But what likely would be considered more controversial were Mr. Schneidewind’s suggestions related to drugs.

“AARP believes that any discussion of budget offsets for Medicare reimbursement reform should include savings from prescription drugs,” he said. “We urge you to give strong consideration to the following prescription drug proposals that could save at least $150 billion.”

Those proposals included offering Medicaid-level drug rebates to beneficiaries who are eligible for both Medicare and Medicaid, giving the secretary of Health and Human Services the power to negotiate drug prices, reduce the exclusivity period for biologics, prohibit pay-for-delay agreements (when a brand-name drug manufacturer pays to delay the launch of a generic equivalent), and prohibit the use of Risk Evaluation and Mitigation Strategies (REMS) to block generic and biosimilar drug development.


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