Examining the Medicare Physician Fee Schedule, MACRA, and Opportunities for Payment Reforms

Subcommittee will come to order. Chair recognizes himself for five minutes for an opening statement. Today's hearing will examine reforms that could be made to Medicare physician payment and policies enacted in the Medicare access and Children's Health Insurance Program Reauthorization Act commonly known as MACRA to incentivize value-based care. physicians, nurses, and other health care providers. We don't have our witnesses here yet.

Wait, they don't have the witnesses.

Ah, they don't need, they don't. I mean, we need them.

What?

But we don't need them until I finish the opening.

They might wanna hear us if we pass.

Oh, they might wanna hear it. Okay. Put us on pause. I'm just rockin' and rollin'.

Yeah, I know.

So that everybody understands that we have a four thirty vote series scheduled so we're trying to Move it a fast clip, but apparently I got ahead of th- myself.

you can just wait for notice and then we can get another one.

Yeah, thank you.

Okay.

And we had another hearing here just a minute or two ago, so we hadn't completely transformed.

Yeah. Did I miss it?

We'll start again. How about that?

How about that? Yeah.

All right, that way, buddy Carter can be in on the list.

Oh. I can't believe I'm doing this.

Today's hearing will examine reforms that could be made to Medicare physician payment and policies enacted in the Medicare access and Children's Health Insurance Program Reauthorization Act commonly known as MACRA, to incentive our value-based care. Physicians, nurses, and other health care providers are critical to our health care system, and their work remains essential to ensuring patients have access to timely high-quality care in every community. Our discussion today builds on the affordability series we've been working on throughout the year and will give us the opportunity to better understand how provider payment challenges can impact healthcare affordability. MACRA was enacted into law in two thousand fifteen with overwhelming bipartisan support. This committee and subcommittee under the leadership of Doctor Michael Burgess worked diligently on furthering that policy. MACRA marked a significant shift in Medicare physician payment, aiming to modernize the program and improve its long-term sustainability. to move physician reimbursement away from a traditional fee-for-service structure, which often rewards volume of services provided towards a model that incentivizes high-quality value-based patient care. MACRA permanently repealed the sustainable growth rate, or SGR, that had been used to calculate provider reimbursement under the physician fee schedule. This was intended to bring better stability to physician payment updates. The other core component of MACRA was the Quality Payment program, which established the merit-based incentive payment system, or MIPS, and incentivized participation in the alternative payment models, or APMs. Under MIPS, providers participate in a performance-based payment system where reimbursement is tied to their performance based on certain quality reporting measures. On the other hand, APMs enable physicians to participate in risk-based-based care models that reward providers through financial incentives such as It is important we look for ways to make improvements and strengthen this landmark legislation, as we have heard from various health systems and providers that the current structure presents several reporting challenges under MIPS. Shifting quality measures, administrative burdens, and uncertainty around scoring has not only slowed adoption of MACRA's quality payment programs, but it has also led to additional levels of complexity, and increased costs that are specially concerning for smaller, independent, rural providers. We hear too often about the costs and infrastructure needed to comply with reporting requirements. This often makes meaningful participation in the payment models unrealistic and financially unviable in many cases. And many of these smaller practices do not have the administrative staff, technical resources, or financial ability needed to meet the reporting demands. At the same time, we have also heard concerns regarding the underlying Medicare physician fee schedule and long-term payment stability. Many physicians have expressed concerns that annual payment updates are not keeping up with inflation, leading to rising practice costs, longer patient wait times, and overall strain on the provider workforce. Relatedly, these physicians have also noted that the fee schedule's budget neutrality requirement has placed additional pressures on reimbursement for certain procedures and often pits specialists against one or specialties against one another. It is critical that we continue to work to balance fair and adequate compensation for physicians and other health care providers to mainta- maintain access to high quality care and promote patient choice. This is also critical to the viability of indefin- independent physician practices as further consolidation risks increased costs for patients. the federal government, and also di- disincentivizes individuals from entering the physician workforce. Congress has provided temporary patches to physician payments with another payment bump expiring at the end of this year. We need to look for opportunities that address these long-standing issues and level the playing field while we continue to work to move patients into innovative care delivery models. Maintaining a stable and sustainable physician payment system is important not only for supporting providers, but also for for preserving competition, affordability, and access to care for patients. I'm excited to have our witnesses before us this afternoon, and I look forward to hearing from them and to our discussion on this important issue and issues. And with that, I yield back and now recognize the subcommittee's ranking member, representative DeGette, for her five minutes for an opening statement.

Thank you so much, Mr. Chairman. Medicare payments to physicians impacts not just the seventy million Medicare but essentially all patients, given that more than ninety-five percent of clinicians are paid through the program. Payment through Medicare's physician fee schedule is a critical funding source for clinicians. The program pays for about nine thousand types of medical services, and accounts for a fourth of total national spending on physician and clinical services. But these payments aren't keeping up with inflation, which means America's physicians are paid less and less every year. In fact, Medicare physician payment has declined thirty-three percent in real terms since two thousand and eleven and payment rates under Medicaid are even more dismal. While rates vary state by state, Medicaid fee-for-service payments to physicians are significantly lower than Medicare payments. This delta between Medicaid and Medicare will continue to grow as states lower Medicaid payment rates in the wake of hr one in my home state of colorado for example medicaid providers will take a pay cut so that the states contend can contend with republicans massive new cost burdens nowhere is this a bigger issue than in primary care i know this because my daughter is a primary care doctor and she texts me about this on a regular basis access to primary care is the backbone of a healthy Primary care can serve as a critical entry point to the health care system, providing chronic disease prevention and healthy lifestyle promotion through trusted long-term relationships between clinicians and patients. Systems based on primary care are associated with greater health equity, better health outcomes, and lower health care expenditures. But due to the inade- inadequacy of payments and cumbersome administrative processes, the number of primary care physicians billing the Medicare fee schedule has slowly declined over the last few years. And fewer medical school graduates are choosing primary care over higher paid careers in specialty care, health care administration, or concierge care because lifetime earnings for primary care physicians average as much as two point five million dollars below their specialist peers. As a result, over a hundred million Americans don't have access to regular primary care. These one hundred million Americans are without a reliable touch point to health care and lack coordinated management of their diabetes, asthma, or blood pressure, which means that they can have undiagnosed medical issues for years, and may be forced to delay care until their preventable conditions become a health crisis. Across specialties, Low payment rates force clinicians to weigh fundamentally impossible decisions. Do they continue to accept Medicare patients and threaten their own financial stability to the point of selling their practice outright? Or do they take only patients with commercial insurance and diminish beneficiaries' access to care? Do they pursue medical fields based on patient need or seek out specialties for which they will be adequately compensated and can financially pay off their mountain of medical school debt. These are real questions that my daughter and her peers are asking every single day. Serving our nation's seniors and individuals with disabilities should not be seen as a liability. They deserve the dignity of the best access to care. That's why even MedPak, not exactly known for recommending reckless spending of tax dollars, has called for an inflationary update to Medicare physician payments. An increase based on the Medicare Economic Index, among other reforms, will not only ensure payment keeps up with the rising input costs, but also simplify the health care payment system. Additionally, Congress must work to close the large compensation gap between specialists and primary care physicians, to double the number of medical school graduates going into generalist fields who can manage multiple chronic diseases, and who can prevent illness before it happens. We need to expand payment structures that incentivize comprehensive, longitudinal care over quantity or complexity of of procedures performed. I have confidence that this issue of reforming physician payments to increase access to quality health care, starting with robust primary care, is one that we can all agree is urgent and deserves our full attention. I'm looking forward to hearing from each witness today, and I look forward to working with my colleagues, not just to address Medicare pay, but incentive the incentive structure that prefers expensive delayed interventions that leave patients sicker over earlier more holistic care and a yield back.

And Lydia yields back now. Recognize the Chairman of the full committee, Mister Guthrie, for his five minute opening statement.

Thank you, Chairman Griffith, for uh holding this hearing and thanks uh to ranking member. Again, all of our witnesses for being here today. Today's hearing will build on the committee's third affordability hearing, examining the provider landscape by focusing in on the challenges within the Medicare physician fee schedule. At that hearing, we heard consistently that the challenges pr- at that hearing, providers face in Medicare payment system are driving more physicians to leave independent practices and join larger systems. This increases con and consolidation ultimately drives up costs for patients. To fix these issues, we will hear today about some of the fundamental issues with the physician fee schedule and look at the Medicare payment uh physician payment reforms established in MACRA the law that enacted more than ten years ago, hard to believe it's been ten years. MACRA passed by wide b- wide bipartisan bipartisan majority in both chambers of Congress with the goal of moving past the annual dock fixes, and shifting Medicare towards a value-based care. Despite this important work, we've continued to see payment instability in the program, which Congress has addressed through temporary increases to physician fee schedule payments. MACRA also introduced a quality payment program, which encouraged clinicians to participate in MIPs or join APMs with the goal of improving quality while reducing costs. However, too too often we have heard that the administrative complexity of these programs creates challenges for participating clinicians, especially those in independent practices. It may not actually reflect the care they provide. This hearing will examine the state of these programs to better understand the barriers that exist for provi- providers to move into innovative models of care. Many of these issues uh in today's hearing will highlight will highlight have been long-standing challenges in Medicare payment policy. However, this committee has previously worked across the aisle to advance thoughtful bipartisan policies on these issues and I'm hoping that today's discussion can help identify meaningful solutions centered on improvement proving payment stability and reducing red tape, so our Medicare clinicians can focus more on what's the most important, taking care of our seniors. I thank the witnesses for their participation, and I look forward to today's discussion, and I yield back.

Chairman yields back, now recognize the ranking member of the full committee, Representative Pilon, for five minutes for an opening statement.

Thank you, Mr. Chairman. Today, committee Republicans are hold a hearing On the current challenges that providers face in the Medicare physician fee schedule and while I welcome this important discussion I must start by noting the current state of chaos and crisis in our healthcare system is largely due to the largest Medicaid cuts in our nation's history to providers in last year's Big Ugly Bill and it's all part of Republican actions that are driving up everyday prices across the board for American families on groceries gas at the pump and their healthcare. Republicans' Big Ugly Bill cut Americans' by more than a trillion dollars, the largest health care cut in our nation's history, which will result in one in fifteen million people losing their health coverage. And these deep cuts are directly hurting providers and reducing access to care for millions of families. Already hospitals and clinics are being forced to close their doors. Hospitals are shutting down maternity care units, reducing their services, and laying off health care providers. Approximately sixty-five hundred health care workers have already been laid off because the Republicans' care cuts and another nine hundred hospitals clinics and nursing homes are likely to close closing down altogether or or simply reducing services and this is driving massive increases in uncompensated care that will force more hospitals nursing homes and clinics across the country to close and it's gonna drive up health care prices for everyone else when they are already struggling to make ends meet president trump and congressional republicans refusal to extend the affordable care act enhanced premium tax credits is making health care unaffordable for millions of low and middle income Americans. Tens of millions saw their out of pocket costs skyrocket and according to a recent report more than one in five Americans who initially enrolled during over enrollment have already dropped their coverage because they were unable to afford the skyrocketing prices. Now Republicans in the Trump administration have made a concerted effort to make it much harder for Americans to afford the coverage they rely on. Just last week the Trump administration finalized a rule that would take away health coverage from working Americans and increase health care prices for consumers by causing deductibles and premiums to skyrocket. Even finalize the plan to allow no network plans to be offered on the exchange. Imagine, I can't imagine a healthcare insurance plan with no in-network doctors or hospitals. I don't I don't really see the point. Now, turning to Medicare, we must ensure the program remains sustainable, provides long-term stability for doctors, and delivers the highest quality care for all Medicare beneficiaries. It's also critically important that reforms to the physician payment system do not result in increases in Medicare beneficiaries' premiums or the price they pay out of pocket. So the Medicare access and chip reauthorization act, or MACRA, aimed to reform Medicare's payment model by creating a system of payments to healthcare providers based on the quality of care that patients receive however over a decade later it's fair to say that we have not seen the results that many hoped for MACRA created the merit-based incentive payment system or MIPS, which was intended to provide better pay for health care providers who provide better care. But under MIPS, providers may receive increases or decreases to the Medicare payments based on factors like the cost and quality of care they provide. But in reality, this system has appeared to create additional administrative burdens for providers without producing significant improvements in patient care. It's also not clear that MIPS is achieving its goal of improving efficiency of patient care and I look forward to learning from the witnesses about the lessons learned from MIPS and what reforms are worth considering. MACRA also created bonuses for physicians to take on a certain amount of financial risk by participating in an alternative payment models. Evidence shows that these models have improved quality of care and resulted in close savings, and I believe it's critically important that we we increase participation in alternative payment models by extending the bonus and building on the existing program and I look forward to hearing about how those uh apm programs have effective outcomes for both physicians and patients, and now congress can continue to build on its success. But as congress explores changes to the medicare physician payment system it's critical, that medicare remains viable while ensuring that seniors receive high quality care and doctors receive fair compensation. We need to make sure that any changes we make do not result in an increase of out-of-pocket costs for medicare beneficiaries and that we must also be able to evaluate the quality

Chairman uh yields back. We now conclude with member opening statements. The chair would like to remind members that pursuant to committee rules, all members' opening statements will be made a part of the record. And we want to thank our witnesses for taking their time to testify before our committee. today or our subcommittee today. Although it is not the practice of this subcommittee to swear in witnesses, I would remind our witnesses that knowingly and willfully making materially false statements to the legislative branch is against the law under title eighteen section one zero zero one of the United States Code, you will have an opportunity to give an opening statement, followed by questions from the members. Our witnesses today are Doctor William Fox, Chair Emeritus, Board of Regents, American College of Physicians, Doctor Stephen Furr, Family Medicine Physician, Doctor Daner Smethurman, Chief Executive Officer, American College of Radiology. Doctor Rick Snyder, President of Heart Place, and Doctor Farzad Mustashari, Chief Executive Officer and Co-Founder

Yeah.

of Adelaide, Adelaide. Uh, per committee custom, each witness will have an opportunity for a five minute opening statement, followed by a round of questions from the members. The light on the timer in front of you will turn from green to yellow. When you have one minute left, I now recognize Doctor Fox for his five minutes to give an opening statement. Dr. Fox.

You need to turn it on.

Yep, gotta gotta push the button, turn it on. There you go.

There we go. Can you hear me now? Uh, Chairman uh Guthrie and Griffith and ranking members Polonin to get and distinguished members of the subcommittee, thank you for the invitation and the opportunity to testify today. My name is William Fox. I am an Internal Medicine and Primary Care Physician and Chair Emeritus of the American College of Physicians. The ACP is the largest medical specialty society in the United States, representing one hundred and sixty-three thousand internal medicine physicians and medical students. Internal medicine physicians form the backbone of our nation's adult primary care workforce, accounting for forty-one percent of primary care physicians. Our members also include hospital physicians and the internal medicine subspecialists such as infectious disease doctors, endocrinologists, and cardiologists, just to name a few. Germane to the work of this committee, I am a primary care physician in a small and still independent practice in Charlottesville, Virginia, a practice which I have shared with two other physicians for the last twenty-three years. During that time we have been navigating the challenges of maintaining a viable practice in the face of significant headwinds. When we started our practice, ours was one of many independent practices in our community. Over the years, I have watched too many of these practices be absorbed by large healthcare systems, be sold to private equity companies, or simply close their doors. Our practice's own capacity to accept new patients is limited at this point. And my staff relay stories of prospective patients upset and even tearful on the phone when they learn of wait times of six to ten months for a new patient appointment if at that moment we can even accept new patients at all. These patients simply don't know how they are going to find a doctor. I am passionate about preserving primary care because it is essential that we do so. It is the foundation of a highly functioning healthcare system. I am equally passionate about maintaining independent practice as a vital part of our country's healthcare infrastructure. Our patients value the very personalized, trusted, and longitudinal relationships that we provide as a partner in their health that they may not get elsewhere. What is more, studies consistently show that independent practice is associated with lower health care spending and lower burnout rates among physicians. For decades, our country has not been intentional in its approach to physician reimbursement, and the physician workforce policies that would best serve Americans. This neglect has directly led to the erosion of both primary care and independent practice. The decline in physician reimbursement by thirty-three percent when adjusted for inflation since I started my practice, is an example of one such policy neglect. Despite these enormous challenges, I actually feel more optimistic than ever that these problems are solvable. Recent developments, including advanced alternative payment models and advanced primary care management codes recently created by Medicare, have helped me for the first time envision a potential pathway for success for independent primary care. I would be happy to discuss more of that in the Q and A, but I offer the following recommendations as a starting point. First, end physician fee schedule budget neutrality and create stable and annual physician reimbursement updates linked to the MEI. Second, support and sustain the advanced primary care management codes. It will be vital to study how these codes interact with the Medicare shared savings program and if necessary separate these payments from MSSP calculations. The committee should also endeavor to end cost sharing for these services. Third, create investments in primary care not subject to budget neutrality. Modeled perhaps on the primary care incentive payment program that expired a decade ago. And fourth, increase participation in APMs by extending the five percent APM participation incentive, and reducing the lag between the performance year and the actual payment. And also simplify and modernize the MIPS reporting program to make it more relevant and less administratively burdensome. More detailed recommendations are offered in our written testimony and once again, Thank you for the opportunity to be here today and I look forward to the discussion.

Thank you very much. Doctor Furrier, you're now recognized.

Chairman Guthrie, Griffith, ranking members DeGette, Pilon, and distinguished members of the subcommittee, thank you for the opportunity to testify today. My name is Doctor Stephen Furrier and I'm a practicing family physician from Jackson, Alabama. I'm the past president of the American Academy of Family Physicians. I'm honored to be here today representing a hundred and twenty-four thousand five hundred Fanny physicians and students. Instead of trying to define primary care for you, I'd like to describe it. One of my post-stroke patients had unmanaged diabetes, with a hemoglobin A one C greater than nine and blood sugars consistently over two hundred or three hundred. For months we experimented with different ways in every kind of oral medication combination to try and get him under control to no avail. With his limited education and living alone, he did not feel comfortable giving himself injections such as insulin. So my nurse and I finally decided to try on one of the newer agents at the time, a once a week injectable GLP-one, that we would have the home he- health nurse go out and deliver. That was four years ago. Two weeks ago, his hemoglobin A one C was five point five. In those intervening four years, he has never had an emergency room visit. He's never been hospitalized. When he walks in the office, I know he doesn't have diabetic retinopathy, because when we lost our local optometrist, We invested in a machine that allowed us to do diabetic retinal scans in the office, that are then over read by an ophthalmologist r- remotely. Although we lose money on this machine every month, we're able to provide care to our patients. In July, we'll upgrade this machine to one that uses AI so we'll get immediate readings immediately there in the office. I smile when he walks in the office because he's now eighty years old, and he drives himself to the office and still lives alone. He doesn't have diabetic neuropathy. He doesn't have peripheral vascular disease. We have no local podiatrist. So I found a lady in our community that's good at trimming nails. So she's a part of our office now. We absorb that cost. He comes in and gets his nails trimmed every three months. When I see patients like this, I better understand why they call us family physicians. Not just because we treat families, because our patients become part of our family, and our office becomes part of their extended home. That's primary care. I practiced for over thirty-five years and I can tell you firsthand that our current Medicare payment system is not working for patients and it's not working for the physicians trying to care for them. We're now at a crossroads. The United States has higher rates of chronic disease than pure nations, and nearly all older adults live with at least one chronic condition. At the same time, more Americans than ever have no usual source of care. Primary care should be the foundation of addressing this challenge In United States, primary care accounts for a small and declining share of the health care dollar spending less than five cents of every dollar and that's even less than Medicare. That underinvestment is not accidental, it's built into the way we pay for care. The Medicare physician fee schedule undervalues primary care related to procedures. As a result, physicians like me who provide comprehensive care and continuous care are paid less than those who do discrete procedural services. Even though managing the patient, the whole patient, is complex, time-intensive work, we need to move toward a system that pays for keeping people healthy, not for treating people when they are sick only. To begin that transition, I encourage you to focus on four key priorities. First, more appropriately value primary care within the fee schedule. If we continue to undervalue that work, we will continue to see fewer physicians in our primary care, and fewer patients will be able to access it. Second, reform budget neutrality requirements and provide an inflationary update. The current structure forces physician specialties to compete against each other, and often results in payment cuts when improvements are made elsewhere. This undermines stability and limits CMS's ability to invest in better care. Third, provide family physicians with sustainable, predictable revenue through permanent respective payment options. Fee-for-service alone cannot support the type of comprehensive teen case bear care that patients need. Well-designed alternative payment models allow practices to invest in staff, technology, and care delivery innovations. And fourth, financial barriers, remove those barriers that prevent patients from accessing primary care services. Medicare has taken steps to come up with new codes for care management, but beneficiaries fa- face cost sharing barriers. I have had patients every month decline these services because they cannot afford the small monthly co-pay that came along with them, even though they're the ones that would benefit most from this. The option to bill for service is not only a benefit to physicians, if barriers prevent patients from seeking that care. Congress has taken some steps in the right direction, including U codes and APMs, but we need a clear clear path forward, one that provides stable long-term options for physicians to move in value-based care. Comprehensive Medicare reform is essential, not only for our patients, but also for the health physicians who care for them. Thank you.

Thank you. And Doctor Smitherman, you're now recognized for five minutes.

Chairman Griffith, Ranking Member DeGette, and members of the subcommittee. Thank you for the opportunity to testify on behalf of the American College of Radiology, representing more than forty thousand referral-based physicians practicing diagnostic radiology, interventional radiology, radiation oncology, and nuclear medicine, as well as medical physicists and other imaging professionals. My name is Doctor Dana Smetherman. For many years I worked as a diagnostic radiologist specializing in breast imaging, and I now serve as the CEO of the American College of Radiology. Imaging is essential to modern medicine. It can confirm or rule out stroke, screen for cancer, guide treatment, detect internal injuries, monitor chronic disease, and allow more precise treatments and faster intervention. Yet despite this central role, radiology and physician care more broadly is being delivered within a Medicare payment system that is increasingly unstable and unsustainable. Radiologists are nonpatient-facing referral-based physicians. We do not control patient volume, yet demand for our services continues to rise. Workforce shortages persist, inflationary pressures continue to grow, and practices must absorb higher staffing, technology, and compliance costs. At the same time, reimbursement has steadily declined in real terms. The result is simple. Radiologists are doing more work for less, increasing strain on practices, and threatening patient access, especially in rural and underserved communities. Three structural issues are driving this challenge. First, The physician's fee schedule lacks a predictable inflationary update, while other providers receive annual inflationary adjustments, physicians do not. Second, budget neutrality requirements create instability in the conversion factor. This volatility makes it harder for practices to plan, hire, and invest, discouraging innovation, particularly in technology-intensive specialties like radiology. And third, the current one size fits all value-based models under MACRA do not adequately reflect the role of consultative referral-based physicians like radiologists. We need models that are more specialty-specific, more clinically relevant, and less administratively burdensome. These are significant challenges, but opportunity also exists to enact legislation that would benefit patients and the Medicare system by reducing the volume of unnecessary imaging. To that end, the ACR strongly urges Congress to advance the Radiology Outpatient Outpatient Ordering Transmission, or ROOT, Act introduced by Congresswoman Harshbarger. The prior appropriate use criteria framework, part of the twenty fourteen Protecting Access to Medicare Act, was well-intentioned, but CMS paused implementation after determining that its claims processing requirements were not workable. This pause gives Congress an opportunity to replace this impractical system with one that is clinically sound and operationally feasible. The Root Act modernizes section two eighteen of PAMA by enabling real-time clinical decision support at the point of care and improving data exchange without adding administrative burden. In addition, the Root Act is projected to generate approximately two billion in Medicare savings over ten years, while also reducing out-of-pocket costs for patients. Just as importantly, it aligns incentives with better care, supporting physicians rather than burdening them. We are encouraged the Root Act was included in the Medicare payment reform discussion draft, recently released by Congressman Joyce, Congressman Murphy, and Congresswoman Schreier. We applaud their leadership and look forward to the positive impact resulting from full implementation of this program. But the ROOT Act must be part of a broader effort, and we urge Congress to establish a permanent inflationary update in the physician fee schedule, reform budget neutrality to reduce volatility, and modernize MACRA to better reflect specialty-specific care delivery and outcomes. Radiology is ready to help lead this important work. partnering with Congress to build a more stable, sustainable Medicare system that protects access to high quality care. Thank you again for the opportunity to be here today. I look forward to your questions.

Thank you very much. And now, Doctor Snyder, you're recognized for five minutes.

Chairman Griffith, Ranking Member DeGette, and members of the subcommittee. Thank you for inviting me to testify today. My name is Doctor Rick Snyder. I've been an interventional cardiologist for thirty years, and I am president of HeartPlace, one of the largest independent cardiology practices in Texas. Every day, my colleagues and I care for Medicare beneficiaries across the Dallas-Fort Worth Metroplex, patients with heart attacks, heart failure, blocked arteries, and other serious cardiovascular conditions. The MedF Care fee schedule is not just an accounting formula. It shapes where patients receive care, what care costs, and whether independent physicians can continue caring for the people who rely on them. Right now, the system is broken. Hospitals receive an automatic annual inflationary update from Medicare. Physicians do not, even as the costs of operating a medical practice are rising dramatically. After adjusting for inflation, Medicare physician reimbursement has declined thirty-three percent since two thousand and one. These disparities are reshaping healthcare delivery in ways that directly impact patients. Independent pr- practices are disappearing. Many physicians, especially in primary care, cannot absorb rising costs while reimburs- reimbursements fall further behind. As a result, some are retiring early. Others are shifting to concierge models. And many are selling to hospitals because their independent practices are no longer financially viable. Medicare's reimbursement structure offers hospitals an additional advantage. It pays them more than independent physician practices for identical care. Consider an example from my practice. My clinic is on the campus of a major hospital in Dallas. When I perform an echocardiogram in my office, Medicare pays my practice a technical fee of about a hundred and twenty-three dollars. My patients' copay for that fee is roughly twenty-four dollars. If a patient walks out my door and takes the elevator down one floor to a hospital outpatient lab, in the exact same building, the cost of Medicare and the patient more than quadruples. That's what I call a magic and very disturbing elevator ride. I've heard similar stories from physicians across the country through the American Independent Medical Practice Association where I serve as Vice President. AMPA represents more than fourteen thousand physicians caring for approximately forty million patients across forty-eight states. My independent physician colleagues and I have watched these pa- payment disparities accelerate hospital acquisition of physician practices and the consolidation of health care markets. Hospitals acquired nearly thirty-three thousand physician practices and added more than one hundred and eighty-one thousand physicians to their employment roles between twenty eighteen and twenty twenty six. In twenty twelve, almost sixty percent of physicians practiced independently. Today, almost sixty percent are employed by hospitals. Patients and taxpayers are paying for the price for this consolidation. Patients lose a trusted, convenient entry point to the health care system, and they may wait longer for appointments or, especially in rural areas, have to travel hours to see a provider. Given how much more expensive care is in the hospital setting, taxpayers lose out. If my practice became part of a hospital system, Medicare spending on just two common outpatient cardiovascular tests would increase by more than twenty-five million annually. In other words, our practices are being bought with taxpayer dollars. If we want to preserve the viability of independent physician practice and make sure that the patients can seek timely access to high-quality affordable care in their communities, then we must reform the Medicare physician payment system. At a minimum, Medicare physician reimbursement should include a permanent inflation-based update tied to the Medicare Economic Index, just as many other parts of the health care system receive. H R sixty one sixty, led by Doctor Ruiz and Mister Bilirakis, addressed this disparity. I commend and appreciate their leadership and the leadership of Doctor Joyce and others whose work will stabilize physician payment. More broadly, Congress should pursue site-neutral payment reforms. Medicare policy should encourage site of care optimization that incentivizes providers to shift care delivery to the lowest cost setting where it can be provided safely and effectively, whether that's a physician office, an ambulatory surgical center, or a hospital outpatient department. If we fail to act, we will continue moving towards a healthcare system dominated by larger more expensive providers. That will mean higher cost for taxpayers and beneficiaries, fewer options for patients, and less access to community-based care. Thank you again for inviting me to testify today, and I look forward to your questions.

Thank you very much. Now recognized Doctor Mostashari. Now get close.

It's great.

Uh, all right. You're recognized for five minutes.

Thank you, Chairman Griffith, Ranking Member DeGette, Ranking Member Pallone, members of the subcommittee. Thank you for the opportunity to testify at this hearing on Medicare payment reforms. I'm Doctor Farzad Mostashari, the former US National Coordinator for Health IT at the Department of Health and Human Services. I am now Co-founder and CEO of Alidaid, a physician-led public benefit corporation and a national leader in value-based care. Through our accountable care organizations, over three thousand primary care practices in forty-six states and the District of Columbia share in the rewards of improving care for over three million patients. More importantly, we have the privilege of working with primary care organizations in over ninety percent of the district's represented by members of this subcommittee. We disproportionately serve smaller, independent, and rural practices. My testimony today is based on the evidence and experience we've accumulated at Allodate from over a decade partnering with these organizations, on value-based care. Before I get into policy recommendations, I wanna acknowledge my mom who passed away on Monday. peacefully, at home, and surrounded by loved ones. Not having to worry about finances of hospitalizations and hospice was an incredible gift to her and I just wanna applaud the work of this committee for trying to ensure that that gift continues for generations of Americans to come. I'm also in awe of the medical professionals, well represented here, who cared for her during her long periods of illness. Their professionalism, their care, their love, none more so than her primary care physician. But we also experienced firsthand the lack of coordination, the opacity, the complexity of a fee-for-service healthcare system. that is focused on maximizing throughput, that is focused on coding and documentation, that is focused on meeting regulatory checkboxes. There was one ray of light that I wanna share with you. My mom broke her hip last fall after a difficult hospital stay. We were determined to bring her home. The hospital discharge planner does their best, but when the hospital bed doesn't show up, when the medications clash, when the home health agency doesn't operate on the weekend, families are left on their own. And families with a lot less resources than mine, with a lot less understanding of the system than mine, suffer much more. This time, an experienced nurse from her primary care practice called me with incredible relief and some surprise. I said, " Is this a new service?" yes you can help it would be amazing if we could get some help sorting through what's happening here and she said no this is not a new service but your mom is now in an accountable care organization members of the subcommittee shouldn't every medicare beneficiary be in an accountable care organization As the chairman noted, the purpose of the original MACRA framework was to provide both carrots and sticks to encourage practices to join advanced alternative payment models, AAPMs, instead of remaining in fee-for-service and MIPs. Unfortunately, the implementation of MACRA has played out differently than Congress had hoped. Most practices do not see a stark difference between AAPMs and remaining in fee-for-service and MIPs. CMS has been reluctant to significantly penalize lower performing practices so MIPS has neither driven care improvements nor provided an incentive for practices to leave fee-for-service. At the same time, CMS has diminished some of the advantages of participating in AAPMs. In my view, Congress should continue but fix the AAPM bonus and instruct CMS to consistently press the advantages of joining AAPMs. Chris Klomp, the Deputy Administrator at CMS, recently stated, " Accountable relationships outperform on virtually every single quality measure that we track." I've laid out some critical steps Congress can take to do this in expanding AAPMs in my testimony. Most of the ideas I've presented are not directly addressed in the many bills, the legislation related to the fee schedule, MIPs, and AAPM bonuses, The community of value-based care providers would love to work with this committee to update the Value in Health Care Act on some ideas to accelerate this movement. We welcome the committee's partnership in getting there. Thank you.

Thank you, um, and thank you for joining us during this time of morning. What was your mother's name?

Her name was, uh, her nickname was Sesha.

Sesha. Uh, with ranking member to gets uh agreement uh we will take a moment of silence in memory of your mother

um

We often forget, we get busy. We have time schedules and we often forget the important things. Thank you for reminding us of that, and thank you for your presence here today. We will now begin questioning. I'll ask that members not begin a new question to our witnesses. Is there five minutes expire? It's okay to leave five or ten seconds on the clock. Um, and we encourage members to submit written questions for the record. I now recognize myself for five minutes. Uh, Doctor Fox, in your testimony you referred to a report uh that found that the number of independently owned physician practices has declined over forty-eight point five percent from twenty eighteen to twenty twenty six. Do you agree with Doctor Snyder that the current structure of physician fee schedule is driving independent doctors to sell out to bigger consolidated enti entities which drives up costs for everyone? And assuming your answer is yes, would you please explain And if you could pull that mike just a little bit closer to you, I was having some difficulty hearing you in your opening.

Th- thank you, Mister Chair, and yes, I do agree. Uh, thank you for the question, and I think the problem is even bigger than that. A generation ago, seventy-five percent of physios physicians were owners in their own practices, and perhaps twenty-five percent were employed by larger health entities or corporations. And today it's just the opposite. And if I had to point to one thing, that has led to the deterioration of independent practice, it is the lack of uh positive updates and predictability in the fee schedule. You can imagine that in addition to me taking care of or our practice taking care of thousands of patients, I'm also a small business owner. And the costs of being a small business owner go up every single year. Rents, uh cost of living increases, the cost of insurance, and so forth. And without stable and predictable updates from Medicare, you can imagine how hard it might be to sustain such a business. Hence, many practices selling to private equity companies or being absorbed by their local health uh health care centers.

Thank you. Doctor Smitherman, can you explain why the current fee schedule budget neutrality requirements pit specialties against each other and could cause unfair cuts for certain specialties If they project the reimbursement wrong for new codes.

Yes, so the current budget neutrality requirement basically pits different specialties against one another. So in order for one specialty to have an increased codes, it means uh an increased reimbursement, it means another needs to go down.

Can you give us some a real life example of that?

Sure, um Pretty recently there was an increase in the E and M codes, which uh you know certainly was warranted for physicians who see patients in offices like all of my colleagues. But uh the conversion factor had to go down in order to account for that in the fee system. So basically all of the other specialties, including radiology, took a a pay cut in order to accomplish that.

Alright, thank you. Doctor M- Master Shari, I'm gonna I'm never gonna get it right, but

Far far as that is fine.

All right. Um Talk some more about the your suggestions on the advanced alternative payment models you you s- you s- started on that in your opening but uh I'm gonna give

Yes.

you about a minute and a half to do that and then I'm gonna yield back.

Yes. Um the the fundamental flaw in terms of the structure of the AAPM, I think it's very important for both signaling and incentives to have an AAPM bonus or reward uh program uh but the fundamental structure of it currently is flawed in two ways first uh the uh payments kick in two years after you make a decision to join an aapm that is kinda not a great way from a behavioral economics point of view to have an impact uh we would much prefer and we talked to thousands of practices who join and those who don't join and what i can tell you is if they signed up and they got immediately that equivalent of that aapm bonus in payments in January and a one-time per person bonus, that would allow them to invest in all the kinds of resources that Doctor Fur talked about to be able to do the value-based care and to create an immediate incentive. The second uh flaws I alluded to here is a percent of billing is not the best way to have a s- essentially a site-neutral impact. Uh the primary care physicians who are the lowest paid would then therefore get the lowest incentive. to participate. So we would strongly recommend also turning it into a site neutral per person bonus for any new patient who has not been in an ACO before, has not been in an AAPM before. That way you would encourage both more practices to join AAPMs, but also existing AAPM practices to reach out to patients in their communities and bring them into their ACOs.

Thank you very much. I'm now gonna yield back and recognize the ranking member Diana to get for her

Thank you so much, Mister Chairman, um, Doctor Furry, I was really struck by your testimony and it reminded me of my childhood doctor, Doctor Retallick, who would do all the things that you talked about and how in this day and age, we have so few doctors like you, so thank you so much for what you do. Um, in your testimony you mentioned only three point four percent of Medicare goes to primary care, which is the lowest across all payers. But meanwhile, over nine in ten American adults, sixty and older, have at least one chronic condition and nearly eighty percent have two or more. So I guess I'm wondering if you can talk for a moment a little bit more about the role of primary care doctors in managing chronic conditions.

Yeah, I see the primary care physician as the quarterback of the team. We got very talented players all across the team, but we don't have a quarterback calling the plays. uh care is not gonna be what it should be so we spend a tremendous amount of time coordinating care where they're seeing the oncologist their neurologist their cardiologist they come back to us they've just got out of the hospital they don't know what medicines they're supposed to be taking we spend hours sometimes going through that calling different places see what medicines they're supposed to be on so somebody's gotta coordinate that care and just like a um uh when when a patient comes in like say they've been in the hospital uh their blood sugar's out of control somebody's gotta work with them and maintain

And and it has a much, much better patient outcome, doesn't it?

Yes, much better patient outcome, in fact, when you look at the numbers on chronic care management for that low cost service, Medicare saves ninety-five dollar a month for every patient who's in chronic care management versus the Medicare patient who's not.

and this is not the kind of thing you can do just in a ten minute or fifteen minute increment. It takes time to do this kind of care.

It takes time.

Is that right?

It takes time, it takes a whole team. It's our nurses, it's our front staff, our chronic care management, our nurse practitioners, all of us working together.

Yeah. I saw a study that estimated the average primary care doctor, given a typical patient load, would need nearly tw- twenty-seven hours a day to deliver guideline recommended care. So maybe when we do the daylight savings time they'll be able to expand the number of hours for primary care physicians. Obviously, seriously, um, uh, Doctor Fox, I wanna ask you, what does Medicare really pay for? Is it for patient care overtime or is it for something else?

Yeah, great question. The Medicare physician fee schedule is really designed to pay for episodic care. A doctor delivers a discrete service and then submits a bill.

Right.

What Medicare is not good at is uh paying to care for chronic patients with chronic complex illnesses longitudinally over time of the type that Doctor Fur referenced more r-

Yeah.

Yeah, more recently there are some codes out of Medicare, the APCM codes and the G two two one one codes, which are beginning to recognize this longitudinal care, and we should support and strengthen those codes.

We should. Yeah, cuz we're we're asking more from primary care doctors, but we're not compensating them. Um, and frankly, this doesn't incentivize the type of care that keeps people healthy in their homes and out of the hospital. Um, so I want to ask, um, Doctor Fox. Is the low payment that we're seeing right now the main driver of new doctors not going into primary care do you think?

Yes, absolutely, in part. And still, Studies show this, studies show that the choice of specialty is influenced by the income potential of the field. And we, we know this and it's published in the literature. There are other things. There is a lack of perceived prestige in primary care.

Mm-hmm.

Um, and there is a disproportionate amount of administrative burden which falls on primary care. And those things play a role as well. But certainly the income plays a role and the, as I believe you mentioned, the millions of dollars of income that is given up when one chooses a career in primary care.

Right. So, Mister Chairman, I think this is really something this commi- this subcommittee can work on in a bipartisan way um I uh because I think it's it's recognized by everybody and, and it is a growing national crisis. I yield back.

And I use back now recognize the gentleman from Kentucky. Mister Guthrie, the Chairman of the full committee.

Thank you, Mister Chairman, and uh, regular member Dageddon. Yeah, I think we all can work on these things together. I appreciate those comments. Um, Doctor Snyder, uh, why is reforming the Medicare physician fee schedule important? And what does it mean for the viability of independent practices and affordability for seniors depending on where they get their care?

It it's critical. We are in a crisis in the healthcare economics in this country right now. And part of it is the Medicare physician fee schedule. Unfortunately, there's not meaningful practice viability for a lot of specialties, especially primary care with the current reimbursement uh methodologies and with the administrative burden then being placed on physicians. When this occurs, when these physicians have to make a very painful decision about either retiring or selling to a higher cost provider network like a hospital system, we are not optimizing the quality and low cost access for patients. Our our goal should always be timely access to high quality, affordable care for our patients. And that is, would be what their independent physicians would be the most optimal model.

Okay, thank you. And Doctor, Doctor Fox, in your testimony you highlighted reforms that would improve the fee schedule by addressing targeted issues around budget neutrality, a year-to-year conversion, and those other kind of issues. So while all these seem very technical reforms, can you walk us through why they are important?

Uh, thank you, Mister Chair. Um, we've talked a bit about the importance of budget neutrality and predictable updates for many decades. Uh, physicians have essentially been uh strangulated by the lack of predictable updates. But the rest of the question I think gets at the accuracy of the fee schedule. Are we accurately valuing the services that physicians do? And this is very important and it's something not only recognized by us, but by Medicare and by the National Academy of Sciences and by MedPak have all raised these concerns primary care physicians feel that the work they do taking care of patients in a continuous longitudinal manner over time which is what we need to do in order to care for patients with complex chronic illness is not accurately valued. And so these changes these these suite of changes would instill greater accuracy into the fee schedule.

Okay. Thank you. And now, Doctor, Doctor Furr, we passed MACRA over a decade ago, MACRA uh put MACRA pushed in the goal of pushing Medicare towards value-based care. I think this worked for some time to practice the others. As an independent physician, can you speak to the administrative burdens of programs like MIPS for a small, rural practice?

Yeah, for a small rural practice, it's gonna be done, it's gonna be done by me. Uh, that's essentially the way it is for most independent practices, we don't have the staffing to do all the other things that need to be done. So essentially I'm the quarterback, I'm the manager of the ship, so I gotta sp- am I gonna spend time doing that or spend time

Would there be better measures or do you think the measures re- do you think the measures actually reflect the care that you provide or is that burdensome?

I think the the problem is there's a whole plethora of of measures, and that's the whole problem. We need one standardized universal measure across all insurances, so we understand. So when I have patients that change from one Medicare Advantage plan to another, I could have another whole another set of measures I gotta deal with each year. So we need to all come together and agree what truly measures that we need to all have, and everybody agree what those are. So the burden, part of that burden is the measures don't cover what we want to, but the other problem is there's multiple measures out there and nobody's agreeing on what they are.

Yeah, we gotta find the right balance between paperwork, red tape, or whatever you wanna call it. And if you do zero, then we end up with twenty billion dollars going in hospice in California. I just had a guy the other day said They sent four hundred letters to hospice companies in California, somebody from HHS, and twelve and they they withheld their funding. And twelve people called and said, " Where's my money?" So you think the other uh, what, three hundred and eighty-eight just could live without their money, or do you think they were false? So leave that to you. So, Doctor Smitherman, we've similarly heard from specialists that programs like MIPS or alternative payment models don't reflect the care or complexity of services provided. What steps could Congress take to reduce the burdens Same kind of question, while still capturing the value of MIPS.

Yes, so um I I feel that MIPS does represent primary care where you see a patient over a long period of time, but radiology really is at different episodes of that care, adding a lot of value, but really not captured. The other thing that we've seen in radiology is that we have very few measures that we can actually report, and so it's very hard for radiologists to succeed, and they frequently get topped out. and then that measure no longer exists. So, I think that this does actually create tremendous challenges for independent radiology practices, and is in some ways driving the move towards consolidation.

Thank you. Well, my time's, all right, three seconds. I'll yield them back. I'll have time for them. Chairman yields back. Now recognize the ranking member of the full committee, Mister Pilon of New Jersey.

Thank you, Mister Chairman. We talked about how MACRA aims to reform Medicare's payment model to establish stronger financial incentives for higher quality care. and also created bonuses for providers participating in certain advanced alternative payment models. Um, so I have basically one question for Doctor Mostashari and one for um, Doctor Furr so I'm gonna ask you to take couple minutes each. So Doctor Mostashari, can you briefly discuss ways that APMs have been successful in improving patient care at lower cost, and uh the importance of the APM bonus? for physicians participating in these models, if you will.

Uh, thank you, um, uh, Congressman Pilon. The good example is actually Woodbridge Medical Associates in in your district, and they are an independent practice and they're doing all the right things, uh, and they are able to do that and stay independent because of the incentives in joining an ACO an accountable care organization where if they control the patient's blood pressure better and their blood pressure control is now eighty- three percent, which is far superior to many academic medical centers, superior to where I trained at Massachusetts General Hospital. If they can achieve that blood pressure control and prevent strokes, they get some of the funding that would have otherwise gone to the suffering and expense of a hospitalization for uh a stroke. They do ninety-three percent annual wellness visits. So, uh it's really, really critical for there to be one visit a year with a primary care doc where they focus on what's gonna keep you healthy, as opposed to responding to the immediate issues. On emergency room follow-up, there were three hundred and thirty-three of their patients who went to the emergency room. They called two hundred and seventy-six of them, ninety-four percent of the people who went to the emergency room. Most fee-for-service practices don't even know how many of their patients went to the emergency room and they called them. So these are all examples of better care for patients, better primary care management that has resulted in significant increase in payments to the practice that has allowed them to stay independent. So, I just want us not to lose the thread on making sure that these AAPMs are supported, are reinforced, and are simplified, uh, so that we're not actually flipping the intent of MACRA, which was to make it easier to be in an AAPM than MIPS, whereas now, on the quality reporting, for example, it's harder to be in an ACO than it is to be in MIPS.

Alright, well thank you so much. I appreciate it. Um, Doctor Furr, can you briefly discuss how Congress can support provider participation in APMs, particularly primary care providers, and how can Congress help more providers transition to value-based care and you, I mean, we know that primary care has been historically underfunded, so if you could also discuss the importance of um I'm kind of combining two questions here, of investing in primary care and what more can be done to address barriers to access. That's a lot in two minutes.

I think the bonus is very important up front because most practices don't have the kind of money to invest in the technology and staff to actually make that move and also if their fee for service is unstable to begin with, you got an unstable ship, it's hard to make a a jump there, so doing the other things we've talked about as far as stabilizing our income as it is makes it easier for them to do that. I think the other thing is there needs to be some stability in the program. It changes from year to year, and then the problem with that, some of these will expire after a year or two and move on. We need some stability long time cuz this is something that takes years to really see how they're gonna be effective.

Um, but you know, my kind of my second part of that was the importance of investing in primary care as well. I mean, I mean, you know, we know that there are fewer primary care doctors and You know, a lot of doctors don't wanna go into it. Why is it important that we have a lot, you know, more primary care doctors? That's, if you will.

Yeah, but cuz again, we're the we're the gateway, we control a lot of the cost cost that goes in the Medicare system, even though we get paid very little of it. We control millions of dollars in that cost going forward cuz we determine where that care gets taken care. But the key thing is we want healthy Americans. We wanna prevent disease, so primary care, that's what we do. Essentially for us, every visit is a wellness visit. every time a patient comes in, we're not only thinking about how are we taking care of them now, but also how are we gonna prevent problems going forward.

But so your point, uh which you made in the beginning there is that because so much of uh the cost if you will, not that we just wanna talk about that, but is what goes through or directed if you will by primary care doctors, even to specialists or whatever, uh it's even important from a cost point of view in terms of

Yes.

what goes on after you see a primary care doctor.

Great.

Yeah. I I appreciate that. Thank you so much. Thank you, Mr. Chairman.

Thank you. The gentleman yields back now, recognized the Vice Chairman of the subcommittee, Miss Harsh Barger of Tennessee.

Yes. Thank you. Thank you, Mr. Chairman, thank you to the witnesses for being here today. Um, you know, I wanna thank Doctor Joyce on our committee, too, a colleague, for his leadership on the important issue of insuring sustainable Medicare payment systems for the health care professionals. who care for our seniors and who care for those people with disabilities. You know, when Medicare was created in nineteen sixty-five, health care looked very differently than it does today. And yet many of the uh Medicare statute and payment policies haven't kept pace as doctor first stated. Um, today you have care that's increasingly delivered through uh team-based models that include pharmacists or N P's or P A's and other providers. especially in rural communities like the one I represent or the one that the chairman represents. And as the committee examines reforms to Medicare payment systems, it's important we consider all the health care professionals who provide and bill for care under Medicare. Uh, and I want to reaffirm my strong support for an interest in this committee working with ways and means to advance this year the ICAPS bill. Uh, and it allows pharmacists to receive Medicare payment for essential testing and treatments for a limited set of diseases. uh consistent with state law because we have a shortage of physicians, and we can step in if we have the clinical training to do that. And I want to start with uh Doctor Smitherman, in your testimony you mentioned a legislation that I introduced, uh the Root Act, which addresses um the administrative hurdles that stalled the implementation of the medical imaging appropriation use cri- uh criteria section of the Protecting Access to Medicare Act. And the Root Act would address those hurdles. So can you briefly explain how the Root Act addresses the administrative hurdles of the overall PAMA imaging program and the overall benefits associated with reducing unnecessary imaging?

Um, so, yes. Um, one of the biggest challenges for radiologists is that we don't control the volume of imaging studies but they just keep going up and up. Um, the challenges with the original PAMA legislation were largely administrative, so the Root Act seeks to reduce those administrative hurdles. It eliminates the real-time claims processing. Um, the ordering physicians now have to attest that they're consulting the appropriate use criteria but not necessarily adhere. Um, they also don't have to consult AUC a hundred percent of the time. Uh, in addition to the current EMTALA emergency services exemption, there are also new exemptions for patients who are in clinical trials and patients who are in small or rural practices. And of course, on the plus side, uh, the patients will receive the right scan at the right time. Uh, for those who have CT or X rays, there'll be less radiation exposure if they don't get a test they don't need. Uh, and there will also be savings of approximately two point four billion dollars over ten years to the Medicare program. Um, but also, equally if not more importantly, a reduction in the out-of-pocket costs for patients.

OK.

Well, that sounds good to me. Um, Doctor Furr, when you were talking about your little patient, and the it it just it reminded me of the little patients who come to see, me in my district, and I'm a pharmacist, I can't prescribe unless I have a collaborative agreement, but it's exactly what we do in rural districts. You almost triage them right there and then we send them to where they're gonna get the best care, and the primary doc is the one that that takes care of them. So, with everything being vertically c- consolidated, uh, how much is Medicare payment is really contributing to that consolidation?

I think it is, cuz practices are just not sustainable, uh, you gotta realize not only have we not got an inflationary update, nobody talks about it anymore, but I do. Uh, the two percent sequestration,

Yeah.

it's it's still out there. And you know, Einstein said it's the eighth wonder of the world, compounding interest. Well, it works the other way too. if you take a two percent cut every year and do that over decades it's real money and then you throw no inflationary update on that it's just not a sustainable practice anymore so you gotta find other ways to make it last so in rural

yeah

practice we'll convert to a rural health clinic or FQHC community health center anyway we can try and get our reimbursement up some but when you got Medicaid pays poorly Medicare pays poorly and then you have a poor payer mix

yeah

on top of that there's only so many ways you can

it's terrible

Can cut it.

Well, there there is. I mean, that's why nobody wants to go into medicine, they all wanna be influencers, cuz they make a lot more money. Um, Doctor Snyder, the magic elevator ride, really striking because you know why? It's true. It is absolutely true and what I'd like for you to speak more about it and how the current structure of the Medicare um physician fee schedule encourages solid consolidation of what does that mean for patient cost and quality of care, sir?

It's it's a significant issue. It's providing incentive for the higher cost systems to pursue, the proceduralists, cardiologists and whatnot, to wear which are the high intensive procedures and to consolidate them and and capture those referrals and those procedures.

And I forgot, I wasn't supposed to ask a question, but you can you can answer me in writing. I wasn't looking at the clock, I'm talking to the

All right.

the patient or the doc.

I get it. It's it's interesting stuff.

Are you back?

The gentlelady who is back now recognize the gentleman from

Thank you, Mr. Chairman. Uh, we need to talk about the very real patient access issues faced by seniors and other Medicare uh beneficiaries as it relates to access to physicians and we need to take a big picture view as to the the burdens that physicians are faced with today. Uh, there is a severe physician shortage crisis, more pronounced in medically underserved area and rural areas all across America. one third of physicians are already in retirement age. And as a result of the one big beautiful bill, we're gonna see uh uh an escalation of the rural hospital clo- uh closure crisis where hospitals will be closing in rural areas. On top of that, uh for years physicians have been experiencing cuts to their Medicare reimbursements, even while other Medicare providers like hospitals, skills nursing, facilities have experienced increased payments tied to inflation. From two thousand one to twenty twenty six, Medicare physician pay has virtually remained flat. And the same time, the cost of running a medical practice has increased by sixty three percent, according to the American uh Medical Association. So that's a an inflation adjusted payments for a physician declined by thirty three percent. Even amid the rising cost of running a medical practice. Mind you, physician shortage crisis, mind you, one third already in retirement age. This pay remaining flat while cost increase is essentially a cut. We have heard directly from the witnesses today that the physician fee schedule is broken and this has led some physicians to struggle to keep their practice doors open and even turn away new Medicare patients. That's why this is a senior access to health care issue. This is a patient health care access issue. Think about it. Inflation is a hot topic right now. and we see it impacting the cost of just about everything in our daily lives, and it's a problem. So why have we not taken it into account when talking about the providers we trust to take care of our loved ones of our s- of our seniors in our country? That's why I with Representative Bill Irakes have introduced and championed the bipartisan legislation HR sixty one sixty, the strengthening Medicare for Patients and Providers Act, to tie the Medicare physician payment rate to the medicare economic index or the mei the inflation physicians and independent practices are already facing rising operating costs and workforce shortages and many providers cannot effectively plan from year to year when they are constantly concerned about cuts every single year this legislation would help physicians keep up with the rising cost of practicing medicine and keep caring for seniors and other medicare beneficiaries As Doctor Snyder mentioned in his remarks, we cannot afford more independent practices to close their doors or to take fewer Medicare patients because they can't afford to treat them. Doctor Fox, have your members experienced these cost increases and what are the biggest cost increases practices are facing?

Thank you, Congressman, and we did discuss uh earlier that the cost of running a practice is going up every single year. So there's the we we have employees, and we wanna give those employees cost of living increases and I'm proud that we've been able to do that

Employees, equipment, utilities,

every year. Equipment, rents,

you name it.

everything.

Everything.

So in the face of flat payments or payments that are reduced uh when taking, inflation into account,

And even, yep.

very hard to sustain.

So, Doctor Snyder, in a senior or in a patient perspective, what do these cuts mean in terms of patient access, especially in rural America.

It means, well, especially in cardiology, you don't frequently don't see a cardiologist. It's very difficult to find access in some of the rural areas vis-a-vis the urban areas. And especially when you consider sixty percent of cardiologists are now over the age of fifty five and twenty five percent over the age of sixty one. If you continue to see more and more cuts,

Thank you.

you're gonna see some physicians I think make some

Doctor, Doctor Fur, you you mentioned clinics would be closing. So, Doctor Fox, American College of Phys- of uh, um American College of Physicians, the American Academy of Family Physicians, the American Academy of uh, of Radiologists have endorsed my bill. Doctor Fox, do you suggest we vote on my bill in this committee?

We would welcome uh increases in payment linked to MAI,

Yes, a simple yes is fine.

yes sir.

A simple yes is fine. Doctor Fur, you agree? Yes, sir. Doctor Smederman, do you agree? Doctor Snyder, do you agree?

Absolutely.

Doctor Mastashari, do you agree? You know, uh, tying it to MEI is critical at this moment. It will provide stability. Anything short of fully tying it and linking it to MEI is short-changing our physicians and short-changing our seniors. We need full parity with this infl- inflation rate. Thank you. I yield back.

Gentleman yields the bag, now recognize the gentleman from Florida, Mister Bill Rockets, for his five minutes.

Doctor Ruiz, since I'm the co-sponsor of the bill, uh, Republican co-sponsor of the bill, I agree. The Medicare payment system has not kept pace with the realities of, uh, delivering care. And we are increase, eh, we're seeing consequ the consequences are there. Independent practice is struggling to remain viable services shifting into higher cost settings and growing pressure on community-based care again uh i'm just emphasizing reiterating what we've been hearing the whole and i totally uh agree that's why i i recently reintroduced to promoting fairness for medicare providers act in many cases outdated reimbursement structures make it difficult for physicians to continue offering certain high-supply cost procedures in office-based settings. I also helped introduce a strengthening Medicare for Patients and Providers Act, which would help bring greater stability to Medicare reimbursements. So, Doctor Snyder, in your testimony you discussed the financial pressur- pressures facing independent practices, and the downstream effects those challenges have on patients. So my first question is for you, sir. How does the current Medicare reimbursement structure affect the ability of independent practices to staff appropriately invest in technology, and continue offering quality services to patients?

It's making it very challenging to maintain an office our staff, frequently our staff are looking now that it's always greener on the other side. Our staff are going to other hospital employed models because they can offer more because of the reimbursement there is more and it's having a significant impact on our ability to see as many patients in the office that we as we would like to.

OK, second question for you, sir. If these reimbursement challenges remain unresolved, what would that mean for patient choice, access to community, a base care, and overall health care costs? The bottom line.

If these go unabated Uh, we are experiencing what I like to con- uh, affectionately call the, our physicians are entering the physician transfer portal and going to a hospital employment. And frequently those pa- their patients will follow with them, but we see they come back because, yes, I wanted to follow Doctor Jones. I've known him for a long time. We have a good, a very good relationship. But when I went to go get my annual test, my annual echocardiogram or, uh, guideline indicated stress test, it's two to three times the cost. and they're on the hook for that and they will come back at it frequently.

Yeah, so there's no patient choice in a lot of cases. So. Doctor Smitherman, uh, in your testimony you specifically mentioned the pressures small radiology practices feel because of how the MPFS has lagged in compensating fully uh for practice expenses, especially for the cost of new high-cost medical equipment and supplies. So the question for you, sir, is what reforms could Congress consider to ensure practice expenses can be adequately accounted for in radiology and other specialties with the high practice supply or equipment costs especially for physicians practicing in the non-facility or independent practice setting?

So, um, obviously, radiology and the other specialties that we represent, not just diagnostic radiology and interventional radiology, but also radiation oncology, are very technology intensive fields. Now you have to remember we have members that practice in all different kinds of settings. Um, so we wanna make sure that we are supporting our physicians who are in independent private practices physicians who are working in hospital employment. Um, but we always want to make sure that patients have adequate access. So whatever can be done to allow our physicians to continue to be able to invest in the care that patients need should absolutely be done whether it is um addressing the fee schedule like we've already talked about with an inflationary update, um, you know, addressing budget neutrality, um, and then of course for us finding other ways um in the in MIPS or whatever would be a future program so that the care that we provide is better reflected

yeah thank you very much i appreciate that and i'm gonna yield back but i wanted to just say my my brother who passed away a couple years ago uh was a primary care physician and he passed from uh parkinson's but uh he took care of the patient uh worried about the patient you know concerns making house calls talking on the phone with the patient. And even when he referred to a specialist, he always kept, you know, up with the patient to make sure the patient was fine. So, uh, and, uh, the money that he was making was minuscule compared to, uh, say, an attorney, uh, in the area. So, uh, we've gotta fix it, folks. There's no question. And, and again, they're not going in like this. good lady said, uh, physicians, uh, are not going into well, in other words, prospective physicians are, uh, not choosing primary care, and that's got to change. Thank you very much. I yield back.

I recognize the gentlelady from Illinois for her five minutes, Miss Kelly.

Thank you, Chair Griffiths and Ranking Member DeGette for convening this hearing. I have to, um, I guess, piggyback on, uh, my colleague. He talked about his brother. I, my husband was a doctor. And I lost him three years ago and he too made house visits and we used to talk all the time about, you know, the fee and money and uh those kind of things and he did anesthesia before and he said sometimes, you know, the what you spend on the anesthesia and what you get paid, um it really it didn't match. So but American physicians have more than stepped up to the challenges that they have encountered over the past three years, throughout the pandemic. They put in countless hours, often risking their own health and safety to keep our communities healthier and safer. I've heard from many physicians, those in primary and specialty care, who have voiced concern about the rising costs associated with providing quality health care to the communities they serve. The combination of rising costs with the continued threat of provider reimbursement cuts causes physicians to make difficult decisions, and you've talked about them. such as limiting new appointment slots for Medicare patients, reducing clinical staff, or reducing charity care services. The current situation is unsustainable. We must act to ensure seniors continue to have access to the full range of Medicare services that they need and were promised to them. Doctor Fur, in many c- rural communities in my district, their primary care physician is the only consistent source of care. How does chronic underinvestment in primary care threaten rural access and increase downstream costs for Medicare?

And the same in Alabama. I I can right now name four counties in our state that have the physician practicing there whose past retirement age no longer practice there would be no medical care in that whole county. We know the cascade that happens there when that practice goes away, and the hospital also dies. When the hospital goes away, there's also no ambulance service, so there little is, no medical care. in that area. So it's really important that we do get people who are willing to practice in rural and underserved areas. Uh, and the fact is there are incentives to do that, but if Medicare is one of the major payers, and they're not getting ex- any extra money there, and the thing is, the reality is, is we're competing, we're trying to recruit a medical student right now who's a resident.

Mm-hmm.

We're competing at these large hospital systems that can pay a whole lot more than we can, and where is he gonna go practice when he comes out? So it is a huge crisis.

Yeah, in in some of my rural hospitals, it's hard for them to attract um doctors to come because I represent the Chicago land area but I have a very big district so people wanna be, especially younger people closer to Chicago.

And I I think it brings up another uh issue that I might say in a rural area.

Uh.

The rural areas are dying cuz people are moving away. Used to, it would be the young people moving away, but now I'm seeing retired people moving away and I'm thinking why is that? Well, Number one reason they're going to be with their grandkids.

Mm-hmm.

But the number two reason is they're afraid they can't get the medical care in the rural area. That's the number two reason.

Really good point. Also, Doctor, for many of the witnesses today have focused on different roles within the physician payment reform system and the approach we should take to evaluate their services why do you think we should look at primary care differently and what difference would it make for older Americans or Medicare?

Yeah, because, cuz one, they're part of our family and we're gonna treat them like we would our parents or our, our children. Uh, but again, we're really focused on, as I mentioned earlier, for me, every visit they come in, whether it's a cute visit or whatever, is a wellness visit. I'm gonna take that opportunity and all the people in our our office are trained that way. If they're there and they're there for, cuz they've got a cold, but we see they haven't had their A A one C in six months, we're gonna get their A one C or we're gonna do their diabetic foot check. We're gonna prevent those things from happening. And I go- I can tell you if my practice goes away, and they have to go to the tertiary care system in Mobile, eighty-five miles away, they're gonna get great, outstanding care when they get there. But they're gonna be in worse shape, and instead of preventing that ulcer on their leg, they'll ha- have their leg amputated, or they're gonna be in dialysis. So when those practices close, they're still gonna get care, but it's gonna be much more expensive care.

And I know we're talking about seniors, but I'd - so I do a lot of work around a maternal mortality and morbidity and I know one my farmer's he told me that when his wife is getting ready to have a baby he had to drive sixty miles to the nearest hospital and when they got there she wasn't ready so they drove sixty miles back and he went into the field and then a little bit later she was ready and drove sixty miles back so you know it's a issue for seniors but in so many areas uh it's an issue. Thank you so much. Thanks to the witnesses and I yield back.

Gently, it's back now, recognize the gentleman from Georgia, Mister Carter.

Thank you, Mister Chairman, and thank all of you for being here today. This is certainly important as a as a pharmacist, I can tell you, a healthcare professional, I I'm and and a member of the doctor's caucus, this is something we discuss quite often, as you can well imagine, and it's important to our healthcare system, it's important we get this right. You know, we I the chairman has gone over the fact that MACRA was intended to modernize the Medicare payments and to move the system toward a more value-based care, which I think the intentions were were grand. And many providers continued, though, to face the instability and the administrative burden, especially and the reimbursement uncertainty. But at the same time, the growing provider consolidation, and that is one thing I'm concerned about because I've said it often and I continue to say it you know we all want the same thing my friends on the other side of the aisle, and my and my friends on this side of the aisle. We all want accessible, affordable, quality healthcare. That's what we want, all of us, and that's what we work toward. But we gotta make sure that this consolidation, which I would submit to you, is is causing a lot of the problems and our healthcare system doesn't get out of control. Doctor Snyder, I wanna ask you, when a when a hospital system acquires an independent practice and converts it to a hospital outpatient department, Medicare pays a facility fee on top of the physician fee. Can you walk us through what that cost shift looks like in dollar terms of uh, uh, for a Medicare beneficiary?

So in my uh, in my testimony I gave an example where if we do a sonogram in my office, uh, echocardiogram, a common test, that's probably the most common test we do in in in cardiology to evaluate the heart. It costs, you know, with with the professional fee and the technical fee, it's about two hundred dollars in my office. The technical component's about a hundred and twenty-three. we go one floor below that to the hospital patient department, it's about three to four times that amount.

Unbelievable. You know, we had the uh, you you all know what CBO is and and and the Congressional Budget Office, we had it wasn't a hearing, it was a member meeting that we had with them, we had the director and we had twenty of the staff members there, and I asked them directly the question, I said, " Give me one example, one example of where consolidation in healthcare has saved money." They couldn't give me one example. None of them could give me one example. And what I said just a second ago, all of us want the same thing, affordable, accessible, quality healthcare. Consolidation in healthcare, where's Teddy Roosevelt when you need him? We we need him to come in and bust this up. That is the problem. Doctor Snyder, I wanna follow up with you, what would meaningful macro reform mean for the current trend of practice acquisition by large hospital systems?

Well, MACRA, especially w- w- w- number one, I would start with site neutrality and and level the playing field. Take away the incentive for organization hospital systems to purchase physician practices and align them to the most highest cost of care, number one. Number two, I would try to uh reform the system by which we could have annual inflationary updates. And number three, we need to ha- make it more meaningful from an administrative standpoint. The MIPS ex- experiment. It's more, it seems like it's more of an administrative, we're just clicking uh things on the computer. We need to have more patient and less paper.

Good. You know, MACRA recognized the value of the qualified clinical data registries, and and it required the secretary to encourage the use of the QCDRs for reporting measures under the quality category of MIPs that you were just referring to. Doctor Smith-Sermon, what what reforms could Congress consider if we were if we were to leverage these registries to better measure quality and reduce administrative complexity complexity for physicians.

So I do think that if we used registries which have been developed by um specialty societies, you would have the ability to leverage more specialty specific measurements. And that of course has been a challenge for radiologists who do not own an entire episode of care, but rather deliver their care at different points along that journey. So for us, it's very hard to link maybe an outcome of a long episode to care, but this would enable us to look at things like radiation dose or accuracy of interpretation or other things in ways that are specific to our specialty turn around time for reports, things like that. So I took

Right, and that would be very helpful.

But for our specialty, yes, it would help.

And I'm sure every specialty has has their All nuances, if you will, in that area.

Yes.

Okay, well, thank you all very much for being here, Mister Chairman, I'll yield back.

Gentleman yields back, now recognizes gentlelady from Washington, Doctor Schreier, for her five minutes.

Thank you, Chair Griffith, and thank you, Ranking Member DeGette, and thank you to all of our doctor witnesses for being here today. I am so happy that this committee is here discussing an issue that I really think is fundamentally critical to the well-being of our health care system and to the health of our patients. And as a pediatrician and chair of the Democratic Doctors Caucus, I know how important stable physician payment is. And for the better part of the last year, uh, Dr. Joyce and I have been working together on a bipartisan Medicare physician reimbursement package that would boost Medicare payment, invest in primary care, and reduce administrative burden for doctors. Um, which you all have been talking about today. Fundamentally, it seems to me that fair reimbursement respects the work that physicians do, and it keeps those physicians' practices open and available to patients so that seniors and others who rely on Medicare can get the care that they need. Um, everyone's heard about the affordability crisis in healthcare, which in large part is due to mass consolidation and vertical integration from large corporations. Making sure that independent physician practices stay open as we've heard from all of you is one of the most critical ways we can ensure competition and drive down costs um i wanted to tell you about doctor stephanie fosbach she's uh an internal med doc in uh pullman washington about ninety minutes away from spokane the next large city she ran a private primary care practice um with seven other clinicians uh serving eleven thousand patients in her community and they struggled year after year to make ends meet because Medicare reimbursement just wasn't keeping up and practice expenses were going up. Uh, consultant came in and looked at their books and basically said, you gotta stop seeing Medicare and Medicaid patients until you're turning a profit and then you could do what they called philanthropy. And so that is how dire the circumstances now are. Um, m- Medicare is so reimbursement is so low that physicians uh treating those are now viewed in some cases as charity and that's not what physicians want or what patients deserve and it is closing access um she ended up having to sell her primary care practice to a hospital that just raised cost for patients and for medicare um because when hospitals own the clinics they bill it significantly higher as we heard uh hospital rates for the same services four times as much according to doctor schneider um doctor schneider what are the factors that put pressure on physicians to decide to sell their practice?

Probably most important one is the financial. I mean, we're we are talking about financial viability and this is not unique to cardiology. I think it's it's all the specialties are fa- are facing the same pressures. The administrative burdens that some of the payment systems are putting upon us is is also a big factor. And finally, if you uh if you look at it, unfortunately the let by legislation and by rulemaking the governor's given the incentive to hospitals. They've given them the financial means,

Yeah, I was just gonna ask about that.

the financial resources to uh to source our our physicians and and and bring them on into that into that model.

And there you go. Okay, so basically uh the incentive is there that for private equity and for insurance companies to buy these practices is that they can charge more, squeeze more profit out of the physician fee schedule. Did I summarize that correctly?

Well, no, actually the the only model by which the Medicare fee schedule is not a lot would be if you're in the hospital employed model. When you're on the hospital employed model, then you are more aligned with the with the differential fee. All the others, if it's private equity, if it's corporate, if it's other models, are still governed by the physician fee schedule.

Thank you, uh, for that clarification. How would you like Congress to fix, uh, this issue of vertical integration?

I would number one make make sure that we have are putting the patient first, that we have a financial system that rewards high quality, low cost care that's timely uh accessed. And to do that, we need to really in in empower and bold an independent practice financially, uh that they get meaningful reimbursement and reene- meaningful value for the care that they're delivering in the lowest cost sites.

And I'm gonna go right to that with primary care question. Uh, we have just heard uh from doctor fox and doctor fir about uh how really primary care is the backbone of our healthcare system and that when you have more primary care people have a medical home and health care outcomes, health outcomes are better and yet primary care is one of the lowest paid specialties, on average a primary care physician um over their lifetime of work will earn uh three million dollars less than a specialty physician and they all went to medical school and took out the same debt. Um I'm going to get to my question later or get a two-in-writing about what we can do to balance that. Thank you. You're back.

I thank the gentlelady. Now I recognize the gentleman from Pennsylvania, Doctor Joyce.

Thank you for yielding, Mister Chairman, and I would sincerely like to thank the committee for having this hearing on such an important topic, topic for our presenters here today, but most important topic for Medicare recipients. These individuals have paid into this system for their entire lives. and we need to be able to sustain that system for them. Doctor Fox, you stated specifically in your area in Virginia that you have seen independent primary care practices being bought up by hospital systems. Do you feel that when that occurs, the ensuing vertical integration leads to less personalized care, less access for the seniors who, as I said, paid into this Medicare system for their entire working lives?

I do, Doctor Joyce, I'm seeing vertical integration occurring all around me and I have for the last several decades as practices in my community are being sold to private equity, are being acquired by the healthcare system.

So delve into that a little bit more. Once we're sold to a private equity firm, do you find that physicians have less time to spend with their patients?

Well, we know from studies that vertical integration leads generally to higher cost.

Do you feel Though that in uh affects the ability of the physician. You're the physician sitting across the table from to refer them to the best specialists, the best hospital facility, the best laboratory, the best radiologic facility? Does that impact on that?

My my colleagues share with me that there are enormous pressures placed upon them when they are in large health systems or in private equity, that there are pressures to be more productive.

So now I'm going to pivot. I'm gonna ask the entire panel my next question. Raise your hand if you agree with the statement. This is a very simple statement. Having more physicians in independent practice generally reduces cost systems-wide and empowers the doctors to spend more time directly with their patient. Raise your hand simply. Please note that each of our panel has raised their hand noting in the affirmative that they agree. Doctor Snyder and then Doctor Fox, I would like you to address a simple yes or no response. with specific payment incentives, such as recreating to original ex- exceptional performance bonus payments under MIPS, but directing it only to independent practices, be a small step in the right direction in trying to slow or even reverse the trends of medical practice consolidation. It's a yes or no. Would that be

Yes. Yes.

Thank you both. Thank you, Doctor Snyder, in your testimony Uh, and we're in the testimony from Doctor Smetherman, she specifically mentions the the pressures of small radiology practices, because of the medical physician fee schedule is lagged, and properly valuing practice expenses, especially for the cost of new high-cost medical equipment, which that has a huge impact on your practice. So, Doctor Snyder, is it fair to say that you have felt similar pressures in your cardiology practice?

We absolutely have.

Doctor Snyder, would it make more sense at tethering the practice expense components of the fee schedule to grow annually at a percentage of the hospital outpatient deposit department cost data for similar services so that independent physicians receive similar accounting of their practice costs that the hospital outpatient departments receive?

It would. It go it would go a s significant w- w- level of leveling the pa- playing field.

I think, Doctor Snyder, that you mentioned something that is so important to this hearing, and that is leveling the playing field. Ranking member DeGette has talked w- in hearings before about her doctor her daughter doctor daughter in primary care. And I would like, Miss DeGette, to realize that Doctor Schreier, the Democrat Doc Caucus Chair, and Doctor Joyce, the Republican Doc Caucus Co-chair, are working to address this issue. We need your daughter. and we need these daughters in primary care.

I I already texted her. Don't worry.

Thank you. Thank you, ranking member DeGette. Thank you, Doctor Schreier, especially for working with me on this important legislation. And I look forward to working with this committee to advance bipartisan reforms that strengthen patient access and independent practices which ultimately serve our patients better. I thank each and every one of you for taking time out of your busy schedule to be with us here today. And, Mister Chairman, I yield back my remaining twenty-four seconds.

I appreciate it. Thank you very much, Doctor Joyce, and now recognize gentlelady from Texas, uh, Miss Fletcher.

Well, thank you, Mister Chairman, and thanks to you and ranking member DeGette for holding this hearing, and thank you to all of our witnesses who are here today. Um, I have the privilege of representing many, many physicians, um, across my district because so many of them work in the Texas Medical Center in Houston. And I feel so lucky to represent them because they have been so engaged on these issues and have really educated me and shared with me a lot of their concerns over the years. And since I got to Congress, um, one of the top issues I've heard about from them is the Medicare physician fee schedule and the need for Medicare physician payment reform so I'm really glad that we're having this hearing for years the physicians that I represent have faced declining reimbursement because the current rates just haven't pace with inflation or with the rising practice costs. And this has created significant financial strains for them, and I know it has for physicians across the country. And as we've heard today, um, from our witnesses, for so many physicians, these rising costs are just unsustainable. And they're having to limit the number of Medicare patients they see or they're having to opt out of Medicare entirely. Um, and other physicians, as we've heard, have had to consolidate or close their Some physicians are choosing to retire early because they face a ton of burnout from these uh rising costs and tons of challenges relating to staffing and to dealing with um all of the challenges that this brings so it is clear to me and I think to everybody here that the current Medicare physician payment system is contributing to the physician workforce shortage and it's not only harmful for physicians obviously it's harmful for patients. And it becomes more and more difficult for patients to access care when there are fewer physicians available. And we all know that access to care is a huge challenge for people all across the country. And so, you know, whether it's the long wait times, whether it's having to travel further to see a physician, um, the likely delays in accessing care are gonna lead to worse health outcomes. So we really need to do something about that. Medicare patients and all patients should have access to their physicians and to quality. health care. So one of the things um that I am glad that Congress has kind of done some temporary fixes uh to try to address this, we really need to focus on long-term reform for fet- for Medicare physician payments to ensure that physicians who treat Medicare patients receive sufficient financial reimbursement for their services. And um a really important area of reform is just ensuring that these patients are that these payments are keeping up with inflation. So, despite other fee schedules having a formula that increases with inflation, Medicare physician payment updates don't currently account for inflation, and that's contributing to declining reimbursement rates for physicians. So, Doctor Fox, can you talk about how this lack of an inflationary update is directly impacting the viability of physician practices?

Well, as you mentioned, every other part of the healthcare ecosystem has a built-in inflator every single year. for independent practice and just for physicians in general, we do not. So it becomes harder and harder to maintain a sustainable practice. This is all about trying to maintain access for our patients. We want our patients to have a viable, robust practice to go to. And if we're losing independent practice, patients lose access.

Well, your answer anticipated my next question, of course, about the impacts on patients. Um, but can you talk a little bit about what you think Congress can do to ensure that inflation is accounted for in the Medicare physician payment updates?

Well, the most important thing, in my opinion, is to link annual predictable positive updates to the Medicare Economic Index. I think that is the number one thing we can do to help preserve uh adequate pay, um, access for our patients, and the preservation of independent primary care.

Great. Well, I know that that's important to the people I represent, uh, both the people who uh care for patients and the patients everybody um in my district wants to see this happen and I think that this is a very achievable doable thing that we should be talking about on this committee I really appreciate um your weighing in there and all of you coming and testifying and sharing your expertise and insights with us today, and Mister Chairman with that I will yield back.

Appreciate the gentlelady yielding back, now I'll recognize the gentlelady of Iowa, Doctor Miller-Meeks for her five minutes of questioning.

Thank you Mister Chairman and I want to thank our witnesses for testifying before the subcommittee today. Uh, and I also want to thank the subcommittee for holding this hearing. As someone who's dedicated their professional life to the practice of medicine, the issue of payment reform is, in my opinion, the most critical issue for physician stability and the long-term viability of our health care workforce and especially as in my state rural health care. The Medicare physician fee schedule was intended to create stability and predictability. Instead, Physicians have faced years of uncertainty, repeated payment cuts, actually on an annual basis, and growing administrative burdens. At the same time, the cost of delivering care continues to rise. If we continue on this current path, we are not just cutting payments, we are cutting patients' access to local care they know and trust. Additionally, many of us physicians predicted in twenty ten with the passage of the Unaffordable Care Act that this c- consolidation and uh resulting difficulty in access to care and our uh increasing strain on our physician workforce would in fact happen as it has happened um. Mr. Utherman, the declining physician physician fee schedule conversion factor and the rising hospital base rates are not an accident, but a result of policy choices made by Congress in the Medicare Access and Chip Reauthorization Act or MACRA of twenty fifteen. The primary base hospital payment for inpatient services has increased by thirty percent since twenty sixteen, the outpatient services base rate has increased by twenty six percent since uh, twenty sixteen, and we've heard mention of hospital outpatient departments. Meanwhile, the physician-based payment rate has declined significantly over that same period. Virtually all other provider types receive an annual payment update tied to inflation, physicians and other clinicians do not. From your perspective, why should Congress seriously consider adding some form of a standing statutory annual inflation adjuster to Medicare's physician uh fee schedule, just like we do hospitals.

So, I was in Indiana last week talking to members, two weeks before that I was in Arizona, the coming week I will be in Louisiana. In every single one of those settings, this issue of basically the decline in real dollar reimbursement to physicians will come up. Every setting that I am in um the unpredictability as you noted of the fee schedule in a field that is as technology intensive as radiology makes it pretty much untenable to invest in the kind of new technology that we all want for our patients.

Yeah, and as a person who is an independent practice medicine in town of twenty five thousand people driving to another town of fifteen thousand people, I know that firsthand. Doctor Schneider, we continue to see independent physician practices disappear as care is consolidated. Again, we predicted this back in twenty ten. Only eighteen percent of physicians today remain independent compared to nearly fifty percent not even a decade ago. Independent docs have been squeezed out and seemingly their only remaining option to keep doors open in continuing practicing medicine is to consolidate with large health systems be purchased by private equity or leave Medicare altogether. I believe Congress should be focused on strengthening physician-led care, preserving independent practices, and ensuring Medicare patients can continue seeing doctors they know and trust. In order to preserve Medicare, we need to preserve the physician workforce. As the president of one of the largest independent cardiology practices, can you speak as to why independent physician practices are often able to deliver more affordable, patient-centered care than larger hospital-led s- systems? And if we continue on this path, how will it neg- negatively impact physicians and other clinicians' ability to deliver high-quality care?

One of the important levers we have to pull as an independent physician practice is we get to choose the site of service, whether it's hospital A versus B or place of service, such as an ambulatory surgical center. If I have a, as a physician, as a cardiologist, have a patient that needs a very critical procedure, I can choose if I want to refer that patient to a doctor who's maybe employed by a hospital system, uh, or or another one, or and I can, and I have that latitude to do. I am not restricted. in what system I practice in, I have that full attitude. And that is probably the most important thing, choosing the site of service for the right patient, right place at the right time.

Uh, thank you. Um, um, I wou- was very proud to introduce H. R. eighty-six twenty-two, the Medicare Physician Data-Driven Performance Payment System Act of twenty twenty-six. In addition to, uh, inflation adjustment for physicians to the Medicare Economic Index. The bipartisan piece of legislation would repeal with data driven performance system payment system, a new payment system designed to support small, rural and safety net practices by improving fairness, transparency and clinical relevance. Since my time is running out, Doctor Fox, if you would answer in writing for us if you can explain how reforms like those included in H R eighty-six twenty-two would help preserve independent practices improve patient access and create a more sustainable Medicare program for the both physicians and beneficiaries in writing please, I yield back.

Gentlelady yields back now, recognizes gentleman from Texas, Mister Vizzi, for his five minutes question.

Thank you, Mister Chairman, uh, when we talk about the Medicare physician fee schedule, I think it's important to remember that this conversation is not just about Medicare beneficiaries. Uh, the way Medicare reimburses physicians affects access to care for all Americans, uh, because it influences who becomes a doctor and what sort of specialty they might choose, uh, and whether they can afford to practice independently. uh to in in our communities uh and you'll talk to medical school students and you'll ask them uh what kind of doctor do you wanna be uh and they quickly learn that primary care physicians are reimbursed at a far lower rate than other specialties over the course of their career that can mean millions of dollars in lost earnings uh potentially compared to higher paying fields and students respond to those financial realities which clearly see in the residency match rates. Uh, and while specialties like orthopedic and uh neurosurgery fill a hundred percent of residency slots family medicine only filled about eighty-three percent of their slots this year of course Medicare reimbursement is not the only factor influencing specialty choice but it's definitely a significant driver. Uh, and now we are facing a severe primary care physician shortage. About two thousand and thirty-eight, America will be about seventy thousand primary will be short about seventy thousand primary care physicians uh this is the number of primary care physicians required to staff every primary care clinic in texas california and new york combined uh doctor fox i wanted to ask you uh to what extent uh is the way medicare reimburses for primary care influencing what specialty medical students decide to pursue

thank you congressman we know that choice of

Yeah. Yeah.

Yeah.

Yeah. So, um, after residency, you know, young physicians have to ask themselves, do I wanna open my own practice or work for a large hospital system? And for independent physicians, the barriers can be enormous. It doesn't matter the payer mix. Running a private practice means taking on administrative burden, staffing costs, a rising overhead. I know a OBGYN in the Grapevine, Colleyville area that just went to, they just closed their practice down and went into another practice because of this. Uh, then add uh that to a Medicare physician fee schedule that has effectively reduced uh physician reimbursement by over three percent over the last twenty five years and meanwhile hospital systems offer guaranteed salaries administrative support and far less financial uh um uh uh uncertainty uh so uh for a young physician carrying hundreds of thousands of dollars in student debt trying to start a family practice um can can can can really be tough uh and while hospitals play a critical role in our healthcare system independent healthcare matters too not everybody wants to be a hospitalist doctor uh, Snyder, as someone who owns a private practice back in DFW, can you briefly explain how the challenges of owning a practice are compounded by Medicare reimbursement policy especially in a lower income area like the one that I represent in DFW?

Yeah, when when I was president of Texas Medical Association three years ago, and we talked about this, one of the things I went around all the state was to meet with all of our physicians in West Texas, East Texas, rural areas, urban areas, and try to learn about their frustrations and and burdens and the Medicare fee schedule was always at the top of the list, especially amongst the independent physicians. And now it was a relentless cut and compared to the value and the cost that they were trying to provide patients. And I would have very emotional discussions, especially with some primary care doctors, that they would have to make the very emotional and heart-wrenching decision about closing their practice and joining a uh hospital employed model. which they really didn't want to or to go to concierge model, which when that happens, about two thousand patients just lost their primary care provider because they're

Yeah.

focusing on to giving the access the time that they want to to about five hundred. So, these are all very heart wrenching decisions and it's all coming back to the same thing. The Medicare physician fee schedule is not a viable reimbursement mechanism for a lot of independent physicians. And so a lot of them are again making that decision to stay try to stay independent or make other choices.

Yeah, yeah, and I think whether you're in a rural county or major city, or whether you have private insurance or Medicare, uh, you have access to fewer independent primary care physicians than you did a decade ago and I don't think that that's good for the public uh that's going to result in in in higher costs less competition longer wait times it's just, it seems like a bad outcome for everyone. Mister Chairman, I yield back.

I thank the gentleman, now recognize the gentleman from Ohio, Mister Balderson, for his five minutes.

Thank you, Mister Chairman, and thank you all for being here today. Uh, my first correct question, excuse me, will be directed to Doctor M- Master Sherry. I hope I didn't got that correctly. Um, digital health technologies have the potential to help physicians, patients and others in the healthcare system. As we look for ways to transit patients to more innovative care delivery models, how can we better leverage health information technology to reduce administrative burdens? such as for quality reporting and alternative payment models while still capturing the quality of care provided to beneficiaries.

Thank you so much. As a former US National Coordinator for Health IT, I presided over the agency during a time when we went from ten percent of hospitals on EHRs to ninety percent, practices from twenty percent to eighty percent, and the thinking at that time was all of the information uh should come from the electronic health record. That was gonna be the system of record. in the past fifteen years that has changed. Information is now in many places, it's in registries, it's in health information exchanges, it can flow. And unfortunately a lot of the the assumptions in CMS quality reporting still is it's gotta come from the electronic health record it cannot come from a combination of sources uh that we spend a lot of time and effort putting together to get that view of of the patient. So In terms of digital health, I think it can be tremendously uh impactful, uh but some of our policies are kinda ossified back in back in the twenty tens, uh particularly around quality reporting in a networked uh world. Uh I also wanna say uh that a lot of that infrastructure that we built on electronic health records, I was personally disappointed that it was used for coding and billing, not for prevention uh that we could do. Um, but it is now being put to work in the context of alternative payment models. And I think this point about technology serves your business model is key. And if we're thinking about AI coming into as a new technology into healthcare, AI is gonna help fee-for-service billing and coding. If the provider's fundamental incentive structure is fee-for-service, we're gonna see an increase in costs from AI, not the wonderful potential that it could have, right, but when the incentives are aligned to value-based care to keeping people healthy and out of the hospital, then the technology, whether it's electronic health records, data interoperability, or AI, are gonna be put to that purpose. So, context matters in technology implementation, and payment model is the single most important context.

OK. Well done. Thank you very much for that answer. Uh, my next question is for Doctor Fox. uh and also Dr. Rick Snyder. Uh, Dr. Fox you can go first and then Dr. Snyder you can follow. Several peer-reviewed journal articles report that Medicare physician payment has not kept up with the cost of running a medical practice, we all know that. This suggests that Congress' annual payment patches to the fee schedule has not allowed physicians to keep pace with their practice cost. Dr. Fox and Dr. Snyder, from your perspectives as primary care and specialist physicians, how would a predictable inflation based update built into the physician fee schedule help doctors better mar- ma- manage their practice cost. First question and then follow-up would be, why would this be important for keeping independent practices competitive? Again, Doctor Fox, if you would like to go first, and answer that,

Sure, thank you.

that would be great.

Yeah, as I as I've said earlier, I think that reimbursements that fail to keep up with inflationary pressures is one of the biggest reasons why we're seeing practices uh fail. not be sustainable or be sold to uh health centers or be absorbed by health centers or be sold to private equity companies so maintaining stable payments is really important i wanna give my staff a cost of living increase i wanna pay for the increased cost of all the things that are done in a a small independent practice and a small business actually i feel like we've never really had the cushion to go beyond that we're a three physician practice, we really should after twenty-three years be a six physician or a ten physician practice. We've never had the cushion of money to be able to strategically plan long-term that would allow us to even take care of more patients in our community. So we're fragile, um, and that this is part of the reason why.

Okay. Thank you. Doctor Snyder.

The impact on Medicare for Each's schedule does not only impact or influence the decision of a specialty to go into primary care or, for example, cardiology, it also influences what model affiliation uh a a a young doctor when they're coming out of training. You know, in in my specialty frequently uh hospital employed models can offer three to four hundred thousand dollars more per year than what we can. That's just the reality.

Mm-hmm.

And unfortunately, that's just driving more of those doctors to that higher side of care. Now, in terms of the doctors that are already in our practice, it's can be very challenging retaining them within the practice because the allure uh of going to uh another practice model where they can make frequently double

Double, right.

than what we can we can we can offer uh it makes it very challenging.

Okay. Thank you very much all of you and Mister Chairman I yield back. Gentleman yields back now recognize the Gentleman of Louisiana Mister Carter for his five minutes.

Thank you Mister Chairman and ranking member for holding this very important hearing. Um United States already has a severe primary care shortage, but it's even more acute in rural America. Rural patients are sicker and older, they have higher risk of chronic disease, and are more likely to rely on Medicare and Medicaid. This is a patient population that needs more care, not less. Yet they're more likely to face barriers and lack access to primary care because there simply aren't enough doctors. We also know that patients with access to regular primary care have better health outcomes and lower overall health care costs than those without. I know this because I've seen these issues firsthand. I represent Louisiana, a state where forty-four of sixty-four parishes are designated as rural and seventy-three percent of residents, including those throughout the river parishes in my district, live in a primary care health professional shortage area. My state also ranks fourth in the nation for chronic diseases, including heart disease, cancer, diabetes, and kidney disease, all of which can be mitigated if they're caught before a patient goes into the emergency room to seek care. We must expand access to primary care, support the health care providers who rely on Medicare to serve these patients and fix our flawed payment system. Doctor Fur, In the US, the US is facing a position shortage of up to eighty-six thousand by twenty thirty six. If Congress fails to act on a fee schedule reform, what do the next ten years look like for seniors trying to find a doctor, particularly in rural and underserved communities?

Yeah, it's very bleak, and I think it brings up a very good point. Not only do we need to change the fee schedule, but one thing we've not talked about is where we train our physicians at. We definitely need to look at Medicare and how it reimburses GME and see if we can not work to train more of our primary care physicians in community settings and in rural areas where actually we're in a health man power shortage and we're looking at trying to get a rural track in our area too. What we find is those physicians are much more likely to practice in the area where they do their residency. So instead of training in a big tertiary care center, we need to get them out in the rural areas and community health centers they can actually be trained and stay there. But if if with amount of medical school debt that they're facing, if we don't raise what they can get reimbursed with, they're gonna find the quickest track to get them out of debt.

Wh- which segues perfectly into the next part of my question. I understand that many physicians across the country feel underpaid. I hear that all the time. Um, I'm I'm interested in hearing your perspective on why it's so important to consider primary care as a special category outside of overall uh physician pay increases why is it good for the system overall

I'll tell you everybody needs a primary care doctor not everybody needs a surgeon not everybody needs a cardiologist thankfully but they all need a primary care doctor if we're gonna really bend the curve of the cost we've gotta prevent disease and not just treat it after it happens so you know diabetes is a devastating disease my diabetes or diabetic or hypertensive they got high cholesterol but the ability to change that curve. We've got better agents, we got better pharmaceuticals, we got better care.

I I I don't I don't wanna I don't wanna cut you off. I got about a s- a minute thirty second, but you're answering you're answering the questions just like I think the American people need to hear. How else can Congress stabilize rural primary care and ensure that seniors have access to primary care physicians?

I I think that's where you reimburse them specially, essentially like a per member per member month to take care and manage that patient, uh rather than just say a fee for service. actually reward them for that continuous care that they give over time.

Excellent. Uh, Doctor Fox, patients with multiple chronic conditions are among the most expensive and complex to treat. Yet the fee schedule doesn't adequately account for that complexity. How does the misalignment affect patient access to care? And what can we do um in this strained healthcare system financially with patients, especially those with chronic conditions? that don't have access to primary care.

Yeah, this is one of the most in im- important questions because primary care is the only field in all of health care that's been shown to reduce overall costs and and increase outcomes and the one thing about the physician fee schedule it does not recognize how to manage patients with complex cl- chronic needs so it's only now, very recently, that Medicare has innovated things like the advanced primary care management codes that will that really recognize that primary care is unique that we are managing patients longitudinally over the course of their illness it's not like discrete services like the rest of the fee schedule so this is something that we have to strengthen and endorse and support and learn more from but uh reimbursing physicians for managing chronic disease rather than episodic care is something vital and something that this committee should really take a look at.

Pay me now or pay me later. Curative care is much more expensive than preventive care.

Exactly.

Uh, Mr. Chairman, I yield.

Thank you.

The gentleman yields. The gentleman from New York is now recognized for five minutes.

Thank you, Madam Chair. Medicare physician payment policy has major consequences under whether or not providers can continue operating independently, whether p- practices can recruit and retain physicians, and ultimately whether patients can continue accessing care in their communities close to their homes. Uh, these issues are especially important in rural areas like in my district, New York's twenty-third district, where losing even a single physician through retirement or or moving on to a different area, uh, or any independent practice can have significant impact on access to care for my constituents. Uh, and with that, Doctor Furr, you mentioned in your testimony the growing pressures facing physician practices and increasing difficulty. Many patients have uh finding timely access to care. I- in many rural communities across the country, including in my district, we are already seeing physician shortages, longer wait times, and growing challenges recruiting and retaining doctors, particularly in the area of primary care. Uh, in some areas, patients wait months. uh, for appointments or they have to drive significant distances to to get to their appointments for routine care. From your perspective, how much um, our instability in the Medicare payment system and growing administrative burdens contributing to these broader workforce shortages and access challenges?

You know, ev- every year we tremble when January comes around and we know we've got another cut and we're trying to decide what are we gonna do with our practice. Can we add more staff or are we gonna have to You just can't plan ahead. But you know, I can remember a few years ago, you know, I did a fix, but it was actually in March or April and we held all our buildings for three months and had no income from Medicare until we got the fix done so that instability, you can't run a business that way. You couldn't run a restaurant, uh you couldn't run a gas station that way. So that instability makes it hard to s- to get the technology we need, to hire the staff we need. Uh, all those things make it very difficult to run a practice, and that's one of the reasons behind consolidation. One, there's more they're benefited more by the cost of of the service that they can provide, but also the cost of doing care. When I first started practicing, if my overhead was forty percent, I was shocked. It's sixty-five percent today just because the cost of doing care.

Well, we we need Medicare payment policies that are keeping pace with innovation and advancements in patient care. Uh, Doctor Snyder, uh, as we discuss Medicare payment policy, can you talk about the growing use of cardiac PET scans and why many physicians view them as important advancement for the diagnosing and treating of heart disease.

Yeah, PET scan is a common term as a nuclear stress test. I think a lot of people are familiar with that term, but it's an innovative one, which gives us no which gives us additional information that we don't have access to currently. Uh, from a patient perspective, it pro- it yields one third to one sixth of the radiation, so it's a safer, better test overall. It's much more accurate. You get better images. And it gives us very good data, probably the most accurate data about does a pa- patient have an obstructive blockage or not. So, w- there's a lot less false positives which lead, you have to take that patient to the cath lab. So, in a way, we get to defer, we get more accurate data, and we can safely say you do not need a higher uh invasive test. But more importantly, there's another cause for chest pain, especially amongst women. It's called coronary flow reserve and coronary myocardial vascular dysfunction. And what that is, it's a type of cause of angina with a microcirculation, the circulation you cannot see with an angiogram or with a detect with other type of s- uh stress test. But beforehand, a lot of these women we said, oh, you don't have a severe blockage, it's in your head. And we now know it's not true. They were actually having disease, they were having chest pain, and this is a condition, uh, micro- uh, microvascular dysfunction, which leads to higher mortality and higher morbidity. So we can accurately diagnose it. This is the only non-invasive test available for us to actually detect this. And you see it frequently in fifty to seventy-five percent of women who have non-obstructive disease. They actually had something, and you also see it in certain minority, so uh populations such as African Americans actually have a disproportionately high uh prevalence of this condition as well, so it's a very powerful tool for really getting down to the high quality care before something goes goes awry, I'm a little concerned there's been some uh discussions about decreasing that reimbursement and which would have a a very bad access problem for us.

And in the very short time I have left, how important is it that payment policies keep pace with these newer technologies so that the patients can continue to get these new advancements? And are there any reimbursement or payment policy barriers that could slow patient access or or broader adoption of the technology?

It would it would definitely slow the adoption and here and here's the thing, it's actually saving us money. We're able to defer the the more costly invasive procedures at a hospital or in ASC because we can do this non-invasively and safely and not expose the patient to an invasive procedure.

Well, thank you very much all for your time uh away from your your busy work and and God's work that you do every day. I appreciate you being here and Madam Chair, I yield back.

The gentleman yields. The gentleman from Ohio is now recognized for his

Thank you, Madam Chair, and thank you, uh, ranking member, DeGette. Um, Medicare is unquestionably one of the most important things we've ever done, uh, as a country. And it's now around sixty-seven million Americans, uh, over the age of sixty-five that get their health care from Medicare. It's over a trillion dollars, uh, investments that we make, uh, although it's something that the American people pay for. Uh, mostly through payroll taxes. We're talking about the physician fee structure today, and I was gonna ask some questions about it, and then I realized there's this fundamental issue and around whether or not we really are investing or have the money we need. And if we had a different trust fund, if it were funded in a more significant way, we might be having a very different discussion. So the question, and anyone can answer this. Do you, you know, is it just me or or are you worried about the trust fund? I mean, it would we be having a very different conversation about physician fee schedules if the trust fund was fully funded or was sufficiently funded? Anyone wanna answer that? Or, or let me ask in a less leading way. Is there an issue with the fund? Uh, do we have enough money in in the Medicare trust fund?

I'll

Thank you, Doctor.

take a

Oh, sorry. Go ahead.

Um, one of the things I w- I this this uh a lot of this hearing has been around policies in traditional Medicare. And uh as important as that is, it is now the smaller part of Medicare outlays, which is on Medicare Advantage, but those Medicare Advantage rates are inflated, tied to, trended by cost growth in traditional Medicare. And so I think these discussions in terms of how we can

Right, but but but but Medicare advantage is is us just paying private insurance to provide insurance to seniors. I'm asking a question about the larger program. Are the revenues coming into Medicare sufficient? Would we be having a differe- i- Are you worried about physician fee payments? Uh, are they stretched too thin or do we have plenty of resources and it's just a policy question?

I'm under, I'm under fir- uh, uh, uh, strong conviction that this is not an insufficient spending issue, it's a cost efficiency issue. According to uh, uh, CMS, office of the actuary, we as a country spent four point eight trillion dollars in twenty twenty three. In twenty thirty three, it's gonna be eight point seven trillion. Seventy five percent more.

It doesn't worry you that this program was set up,

Mm.

social security to, uh, paid for by payroll taxes and that we now have a tax system that's essentially two-tiered. You have

Mm-hmm.

workers, including the working rich, that pay income taxes and pay the payroll taxes, and then you have folks who have wealth, that own wealth, and they don't pay any payroll taxes. Does that bother you? I mean, that has to like, because Sure, spending is up, healthcare is expensive. But the question is, when we get into these policy conversations, are we really just nickeling, diming seniors and our physicians who are really struggling because we have such a broken tax system? It doesn't Let me ask you a lead, a less leading question. You've got trillions and trillions of dollars sitting in in in with the the folks at the top who don't pay any payroll taxes.

Mm-hmm.

Isn't that a problem for Social Security and Medicare?

From a funding mechanism, you know, we pay for our healthcare co- you know, two different commodities, time or money. If you got a lot of money, you pay with very little time. If you don't have a lot of money, you're gonna pay with a lot of time. You're not gonna have meaningful access. Per capita, we spent fourteen thousand seven hundred fifty dollars per capita in this country. Compared to every other country in the world, we easily outspend every other country in the world, and it's almost by two to three X.

Yep.

So, again, it's not an insufficient spending issue. It's a cost efficiency, and a lot of that is driven by the Medicare fee schedule, and the other Medicare aid schedules that we are

I, I mean, I,

governing the system.

I agree that we spend more, and I only got thirty-five seconds. We, if we invested in, you know, prenatal care and child care and preschool, you'd have healthier outcomes and health care costs would go down. But we don't have the, you know, we don't invest that way. Other countries do, and they have better outcomes.

We're reactive.

And we, yeah, we react, right? And so now we have But, you know, we have these conversations. And physicians tell me, " I'm struggling." And then what happens, and this is where we spend more, a physician gets bought by a hospital, the hospital takes the same service that that physician was providing and charges two to three times more. Healthcare costs go up because we didn't do the right thing because we're essentially broke because most of these folks at the top don't pay all their taxes. Thank you, I yield back.

Our incentives are not aligned.

The gentleman yields, the chairwoman recognizes herself. for five minutes. All right, well thank you all for being here, not just our witnesses but all of our our folks in the gallery today. Um, you know too often, and I think you've heard this today on both sides of the aisle, we say that we have a health care system, but what we really have is a sick care system that is wrapped in layers and layers of paperwork and bureaucracy. For years Washington has promised physicians that if they just fill out a few more forms track a few more metrics and jump through a few more compliance hoops, that quality would improve and cost would come down. Now, we all know that that is a load of BS. So, we find ourselves where doctors are still buried in documentation, patients are still struggling to access care, and independent practices are disappearing. Somehow, the answer always seems to be that more reporting requirements and more ex- administrative complexity is the key. At some point, we need to stop confusing more paperwork with better health care. Physicians should and I believe want to be focused on keeping their patients healthy and practicing medicine not spending half their day trying to satisfy another scoring system designed by bureaucrats in Washington, typically a bunch of people who aren't MDs. So I'm gonna start with you, Doctor F- Doctor Fur, is that how we say it? All right, I'm terrible with names, so bear with me on this one. I think a lot of physicians feel that they're spending more and more time navigating the system as I just said. They're not treating patients instead they're doing uh the the administrative work and they could say that maybe some of that is um MIPS, which for folks watching back home that is the merit-based incentive payment system and dealing with reporting requirements. But it's also some of the billing documentation, prior authorizations, compliance reviews, liability concerns that are all piling on top of each other. So, here we are nearly a decade after MACRA, what changes would actually help physicians that this body could take on, that would spend keep those doctors spending more time with patients, and less time doing data entry?

I think if you actually looked at primary care and actually did something like a per member per month reimbursement to take care of the patient and manage the patient, uh, so that you would have the money to invest in the technology and staff that you need, and then incentivize them to take care of that patient and manage them over time, rather than just their acute illnesses. That's been done before with HMOs and others and has been very effective.

Mm-hmm.

Uh, and then you would be focused on managing the patient and not just managing the metrics. You know, sometimes I tell a patient, you might be having a heart attack while I'm sitting here, but I wanna make sure I got all your numbers right. So, you know, you gotta focus on the patient what's there before you.

It's almost like we should prioritize patient outcomes rather than metrics?

Yes.

It's a novel idea. I'm gonna p- uh pivot to you, uh I'm gonna butcher this, but I'm gonna try. Doctor Masashari?

You got it.

Yes. All right. Well, you noted in your testimony that MIPS has not really worked the way that Congress has intended under MACRA. So how can Congress simplify this in a way that actually is reducing the administrative burden? Give me a real tangible item that we can undertake here on this committee.

Yes. Uh, one one uh point first, uh, on your first question, a lot of the paperwork that's put in place, the prior authorizations, the denials,

Mm-hmm.

the um the the utilization management, uh the narrow networks that people are sick and tired of those are all attempts at cost containment in a fee-for-service

Right. And doc I'm up against the clock we can all agree that the insurance people are horrible

business model.

so so let's get to my point let's get to my question.

My my my my my my point is just in a value-based care model where you don't have the incentives aligned uh uh incentives to do more

Mm-hmm.

you don't have to worry about those things and so things like the per patient per member funding becomes more uh more uh more feasible. Um, uh, in terms of the specifics on on MIPS, one, the uh efficiency measure, the cost measures should be taken directly from uh the Medicare Shared Savings Program ACOs. Quality measures should come uh out of any system, not just the electronic uh health record. And we should have a mandatory standardized set of quality measures uh for every one of the types of specialties including primary care,

Okay.

not a pick your own adventure, so that the measures can actually be relied upon.

Perfect, thank you. And I'm gonna turn to you, Doctor Smetherman. Heck yeah. Your testimony also highlights concerns with how MIPS applies to radiology and other specialty providers especially when it comes to reporting and the one size fits all metrics anybody who knows me knows that I think the one size fits all model is awful so talk to me about the reforms that you would implement to make these pro programs more clinically relevant and less burdensome for our specialists.

Well I think that for radiologists who are involved uh at different points of the patient's care journey, but really don't control the whole outcomes, having things that are specialty specific, that really apply to the work that we do and the quality of that work would be incredibly helpful and much more meaningful than the one size fits all model we have today.

Excellent. I went exactly five seconds over my time, so I will yield at this moment and turn to the gentleman from Massachusetts. You have uh five minutes and are recognized for your questions.

Thank you. I yield to the gentleman from Washington, Doctor Schreier.

Thank you, Representative Auchincloss. Um, when we left off, uh, we were talking about primary care, and several of you mentioned alternative payment models. Uh, Doctor Furr and Doctor Fox, I was wondering whether capitated payment systems, like, capitated monthly payments are one of those models and how you would integrate that into insurance that covers all care, not just primary care.

So actually you you know that has been done in the past with the in the age of HMOs, we do work on our capitated model and actually that worked fairly well in some systems. It depends on what's capitated and how much it's managed, but it uh that is a feasible system. Again, we need some kind of system where you're rewarded for taking care of that patient over the long term, not o- on a per visit basis. but actually managing that patient and taking care of them.

And I think that's a great point, somehow having quality outcomes that reflect patient outcomes and I'll get to that in just a moment. Um, I wanted to revisit, oh, sorry, Dr. Fox.

I- i- no, thank you. I - I was gonna say I'm not sure that we're quite ready for capitation part two yet, fully. I do think that a blended payment model would be most appropriate. For instance, i do think that a component of fee-for-service a component where you are held accountable for quality that is the aapms and then some amount of reimbursement for managing the whole patient like these per member per month that were just released by medicare the advanced primary care management codes that would be a great formula a pathway for success for independent primary care

It would be nice to have that certainty and stability in reimbursement. Um, I wanna go back to vertical integration because physicians are being eaten up by corporate entities uh like private equity hospitals insurance companies. Um, Optum Optum or United Health Group buys up physician practices and then uh they direct their doctors to code patients as sicker than they are, we know this, allowing them to get a larger payout from Medicare advantage, for example. Um, hospitals have every incentive to consolidate, uh, because earlier we talked, Doctor Snyder, about, uh, hospital rates for the same, uh, procedures that cost less as an outpatient in an individual independent clinic. Um, I, uh, so there's every financial incentive right now toward vertical integration and consolidation. Uh, Doctor Snyder, if your practice were sold to, say, Optum or Private Equity, do you feel confident that you would still have full control over the number of patients you see every day, uh, how you code, and the medical decision making that you make every day.

Uh, I I don't know how it works with with Optum or uh we we work a lot with the the WellMed group in in our in our area because we are independent, we we play the role of the low-cost providers because they do a lot of value-based care, but we as an independent group clinical autonomy is far and away the most important uh factor we have in when we practice. And and we would never sell our group. We are an independent group. We're always stayed that way. And uh, cuz we want to have that leverage. I want to be able to have a patient that I see in my office. If I want to send it to a surgeon that's not on my hospital campus, but I think he's the best surgeon for the specific procedure, I want to be able to do that. And I do that almost every week. if I wanna send a patient to another location because they have more advanced technology, and I think that would be better, that would be the the model or the only model I will be in.

Thank you. I appreciate that, and that g- touches on physicians and patients making healthcare decisions and not yielding that either to giant corporations private equity or insurance companies. I wanted to just touch uh really quickly, I have fifty seconds, on MIPS. Um These are meant to be quality improvement uh uh uh measures, very well intentioned. It's ended up being an administrative burden, fifty-three hours and uh twelve thousand eight hundred dollars per physician per year to do this. Um if docs don't hit the metrics they get penalized. Disproportionately this goes to rural docs and small practices. Doctor Smethurman, uh y- you're you're a radiologist. Do you even have appropriate MIPS, quality measures, and do doctors even inform these measures?

So, uh, we have very few MIPS and it's fewer year over year. They become topped out very quickly. Uh, and in radiology, this is actually one of the things that's driving consolidation because going to multi-specialty groups actually enables radiologists to sort of piggyback on the success of their colleagues in other specialties.

Got it. So you can't get the incentive, so you join. and then everybody enjoys them another uh incentive to consolidation. Thank you. Yield back.

Yield, I say yield.

Does the gentleman yield? Okay. Uh, all right, it looks like we don't have anyone on the Republican side, all right. I believe the the gentlelady, Miss Bedegon, is recognized for five minutes.

Uh, thank you. Uh, Doctor Snyder, in your testimony you talk about the need to support Medicare payment reform that protects independent physicians from closing in joining big hospital systems. More and more hospitals are in, more and more physicians are in hospital-owned practices rather than their own independent practice. Only eighteen percent of physicians are practicing medicine in uh uh practicing medicine uh independently compared to eighty-two percent who are employed by hospitals or corporate entities. On average, patients stay with independent primary care physicians nearly twice as long as they do with hospital employed physicians. How are independent physicians better suited to provide primary care?

Well, I'm not a, I'm not a primary care physician. I'm a specialist.

Mm-hmm.

But generally the s- primary care specialists who are independent that I do work with, um, they, they're the quarterback. They get to decide. They have an option to refer a patient to myself or any other specialist they, that they want to. They have that uh, independent thought process to make that decision. They have that, uh, ability to do that, what's right for the patient. Um, I remember I used to out- I used to outreach to a rural Texas, to a area in Terrell, and I used to do, have a clinic there once a week, and the hospital came in and bought the primary care practice. And the primary care doctors there said, um, and they were very apologetic, uh, sorry I cannot send you any more referrals because we are now aligned with the hospital, and we cannot we can only send to doctors that are aligned with our hospital. And one of the doctors, I was actually their their cardiologist.

Mm-hmm.

So it was it was a tough decision. I understand they're under these type of constraints, but when you're independent, you're not having to limit where you're gonna send a patient either for the right specialist, at the right location, at the right all that you have to consider is what is best for the patient.

Got it. I will try to go to you, sir, uh if I could. I'll just give you a second. Um You also testified that more physicians are shifting to concierge models. What are concierge models and what does this shift mean for patient access to care?

So, concierge model is a model I like to describe almost kind of like getting the VIP pass at Disneyland.

Mm-hmm.

Everyone pays the ticket for to enter the park, but you might pay a little bit more to go to the head of the line. And for concierge practice, you're able to offer your patients the time and the the focus and the attention that you like. uh, quite frequently is for much longer period of time. Um, but you sign a contract with those patients, you're gonna limit how many patients you're gonna see, maybe just five hundred in that book of business because you offer them immediate access. For doctors, primary care doctors who already had a book of business, they usually have, I'm gonna say, twenty, five hundred, three thousand, lot of those patients can't enter that model, so they no longer have that model to - they d- they lose their doctor.

Cuz is it is it more expensive?

And it's an extra issue.

Is that why they other people can't get in the concierge models?

Well, it's uh if we had a lot more doctors, we could offer everyone a concierge experience,

Hmm.

but we don't have enough doctors and we don't have the reimbursement models to afford that.

OK. So did you wanna chime in on the um

I I

independent physicians?

I I did. I think the the answer to your question that is most data driven is if you look at the results of the Medicare shared independent practices are not only more efficient at baseline than others, but they also generate about twice the savings once the incentives are aligned towards saving money and improving quality. Uh, the data around physician-led and smaller independent accountable care organizations is the strongest. And the another point that has not been yet, I think, made in this hearing is that if you're an independent, successful practice in the Medicare Shared Savings program, you can supplement your income tremendously, you can double the amount that you're making, uh, equal amounts from s- creating saving money than you do billing fee-for-service all year. And that can mean the difference between being independent and selling yourself. So independent practices that are successful in value-based care do not sell themselves to hospitals they flourish they thrive they grow.

Great, thank you. Well, access to primary care means more healthy Americans and it's lower cost for our health care system yet nearly one in three. adults in the USA, they don't have a usual source of care, and Congress must act to reform the Medicare payment system, and incentivize more physicians to stay independent so that patients have more choices and lower costs. That's one of the reasons I support the strengthening Medicare for Patients and Providers Act, which I believe will provide an annual Medicare physician payment update tied to inflation. I want to thank all our panelists today and and all your work. With that, I yield back.

The gentlelady yields back. Votes have been called, so we will go to our final speaker. Uh, Representative Trahan from Massachusetts, you are recognized for five minutes.

Well, thank you, Madam Chair, and thank you to all the witnesses for being here today. Um, stable Medicare reimbursement is essential to sustaining our physician workforce and ensuring the patients can access the care that they need. Yet current reimbursement structures in Medicare disproportionately undervalue OBGYN services, reflecting a broader systemic bias in our healthcare system. A twenty twenty five study found that more than a hundred codes for surgeries performed on fe- on female anatomy were reimbursed on average thirty percent less than similar surgeries performed on male anatomy. In some categories, including urinary tract procedures and genital biopsies, reimbursement rates were as much as a hundred and thirty-five percent higher. for procedures performed on male patients. We are talking uh, talking about double discrimination, both against female patients and the providers who serve them. And this comes on top of long-standing gender disparities in medical research, in clinical practice, that too often leave women dismissed, undertreated, or misdiagnosed. These inequities also directly affect OBGYN providers. When procedures involving male anatomy are reimbursed at higher rates, hospitals and large health care systems have financial incentive to prioritize those services and specialties. At the same time, the United States is facing an OBGYN shortage, which is only projected to get worse in the coming decades. Uh, a study published earlier this year uh found that by twenty thirty-five, all but six states will face an inadequate OBGYN supply. So if we're serious about strengthening women's health care, addressing inequities in Medicare reimbursement must be part of the solution. Uh, Doctor Mostashari, can you talk about how inequities in Medicare reimbursement impact one, women's access to quality care, and two, providers' ability to be fairly compensated for the services that they deliver?

Uh, in uh In the areas where we um work the most, it's in the value-based care uh context, and I don't uh I think clearly any sort of uh discrimination uh would be harmful, but I don't have specific examples uh to share, but perhaps uh Doctor Fox might uh might be able to help.

Or even just answering the, I mean I I think we provided the examples like what happens when we don't um reimburse uh similar rates,

Yes.

what ha- what happens to patient care and what happens to the providers that we rely on to treat those patients.

And, as - as - as you stated, uh, there's less accessible care and people are less likely to get the care they need.

Dr. Fox, did you wanna add anything?

Um, I would say that this - this - this is a real concern that you raise. And to me, it gets to the need to dedicate ourselves to accurately valuing the work that we do. Currently, our work is valued through a RUC process, the AMAs relative value update committee generally. And I think there are real methodologic concerns about how they value codes. Their methodology is like forty years old now from the nineteen eighties. And if, if there was true accurate valuation of physician services, I don't think we would see these inequities. So I think we need to dedicate ourselves to modernizing the process, and many people have talked about how to do this better. The - the - the - the uh methodologies they use are survey methodologies, they're very old, there's very low return rate, there's intrinsic bias. And we have newer methods now, including interrogating EHRs and time-motion studies and uh operating room logs for these procedures that you mentioned. So, um, thi- this is a a systemic problem of how we value accurately physician services. And it's not just this issue, as we've talked about earlier, um, you know, in the primary care space, managing patients longitudinally over time, we're not sure that that's valued accurately either, and that has led to a lot of systemic uh, issues in primary care as well.

Well, I p- I appreciate that. And I think on this committee we'd love to dig into modernizing those methodologies, so that we can address this issue. It's not just about fixing a payment formula. Uh, it's so much more, it's making sure that, um, we have a health care system that values women's health, uh, equally and treats those providers fairly. So, thank you so much for that and, um, I yield back.

The gentlelady yields back. That concludes today's hearing. I would like to thank all of our witnesses again for being here today. Members may have additional written questions for you all. I remind members they have ten business days to submit questions for the record, and I'll ask the witnesses to respond to those questions promptly. Members should submit their questions by the close of business on Thursday, June fourth. So without objection, the subcommittee is adjourned.

Yes, good job.