“Congress has averted a continuation of a national health-care crisis,” said Ways and Means Health Subcommittee Chairman Kevin Brady (R-TX), who voted in favor of the legislation. “Doctors can now worry about patients instead of payments.”
The vote produces a clean slate on which Congress can begin its efforts to institute much-needed Medicare reform to save the program. It creates a more patient-centered system that will provide significant savings over the long term and offers a good first step toward keeping the promises made to our seniors. In addition, the package combats waste, fraud, and abuse in our Medicare program with the inclusion of the Protecting the Integrity of Medicare Act (PIMA)—all without increasing taxes.
Brady added, “Fixing SGR has been a shared goal for many years, and today we have provided the Senate and White House with the best opportunity to write a new chapter in the history of the American health-care system which focuses on creating stability for those most in need.”
"This is a firm step toward patient-centered health care. After years of manufactured crises, this bill will give doctors the certainty they need and seniors the security they deserve. We have a lot more work to do to save Medicare, but this plan will strengthen the program. It will put our focus on the long-term reforms we need. And I'm happy to support it."
H.R. 1058 was ordered favorably reported to the House of Representatives as amended by voice vote (with a quorum being present).
H.R. 1152 was ordered favorably reported to the House of Representatives as amended by voice vote (with a quorum being present).
H.R. 1026 was ordered favorably reported to the House of Representatives as amended by voice vote (with a quorum being present).
H.R. 1314 was ordered favorably reported to the House of Representatives as amended by voice vote (with a quorum being present).Amendment by Mr. Holding to the amendment in the nature of a substitute to H.R. 1295, which would require that any fees collected pursuant to the bill be subject to appropriations.
The vote on the amendment by Mr. Holding to the amendment in the nature of a substitute to H.R. 1295, which would require that any fees collected pursuant to the bill be subject to appropriations, was agreed to by voice vote (with a quorum being present)
Amendment by Mr. McDermott to the amendment in the nature of a substitute to H.R. 1295, which would require 501(c)(4) organizations to indicate whether they plan to engage in certain political activity.
The vote on the amendment by Mr. McDermott to the amendment in the nature of a substitute to H.R. 1295, which would require 501(c)(4) organizations to indicate whether they plan to engage in certain political activity, was not agreed to by a roll call vote of 20 nays to 11 yeas (with a quorum being present).
H.R. 1295 was ordered favorably reported to the House of Representatives as amended by voice vote (with a quorum being present).
H.R. 709 was ordered favorably reported to the House of Representatives as amended by voice vote (with a quorum being present).
H.R. 1104 was ordered favorably reported to the House of Representatives as amended by voice vote (with a quorum being present).
Here's the problem: In 1997, Congress tried to put a lid on Medicare's costs by capping doctor payments with a formula called the "sustainable growth rate." Under the law, if Medicare spent more than the cap in one year, it would have to compensate by cutting doctor payments in the next.
But this quick fix was no fix at all. Costs continued to soar as doctors performed more treatments to make up for the pay cuts. And when the threat of automatic cuts loomed, Congress simply postponed them—17 times. Meanwhile, doctors took time away from patients just to keep watch on Congress.
Thanks to this flawed law, Medicare is scheduled to cut doctor reimbursements by over 20 percent, starting next month. That means a lot of doctors may have to turn away seniors.
So my colleagues and I have come up with a bipartisan plan to replace these arbitrary cuts with real reforms. Our plan would strengthen Medicare by encouraging better care and rewarding doctors for better results.
Right now, Medicare pays doctors for every single treatment they perform—with no regard for the patient's overall health. It rewards quantity, not quality, of care. And 10,000 baby boomers are joining Medicare every day, so costs are growing out of control.
Our plan would start to move us to a patient-centered system. We would cancel the cuts and instead give doctors a modest increase for the next five years. Every year after, doctor payments would grow to depend more and more on results. Our plan would set up one streamlined program that would reward doctors who met performance goals and improved seniors' health. Over time, Medicare would reward quality over quantity, and seniors would get better care because of it.
This reform would be a firm step in the right direction. Our plan would also achieve savings by making two other structural reforms.
First, we'd ask the wealthy to contribute more to their care—something we have called for in the House Republican budget for years. Starting in 2018, seniors who make more than $133,000 a year would pay a higher premium for their doctor and prescription-drug coverage.
Second, our plan would discourage unnecessary doctor visits and give seniors an incentive to seek the most effective care. Many seniors have "Medigap" insurance—that is, a private plan that helps pay for costs Medicare doesn't cover, like co-payments and deductibles. These plans insulate people from costs and, experts believe, encourage the overuse of healthcare. Beginning in 2020, this agreement would prohibit Medigap plans from covering the first $147 of out-of-pocket spending, so cost is once again a consideration in healthcare decisions.
The truth is, the real threat to Medicare is in the long term. That's why we need these structural reforms. Together, they would provide big savings to taxpayers that would grow even bigger over the long term.
Our plan would give doctors the certainty they need. It would give seniors the security they deserve. And above all, it would be a firm step toward a patient-centered healthcare system.
Paul Ryan represents Wisconsin's first Congressional District and serves as Chairman of the House Ways and Means Committee.
"This is a budget to be proud of. Our plan would balance the budget in eight years, help create jobs, and strengthen our national security—all without raising taxes. We also call for Congress to fix our tax code by making it simpler, flatter, and fairer. And this committee is ready to get to work. This budget lays the groundwork for an opportunity economy, and this committee is going to build on that work."
"So, we're marking up a lot of bills today. But the point we're trying to make here is this: The IRS works for the taxpayer, not the other way around. It's their job to make doing your taxes as easy as possible. And so the burden is on them to prove any wrongdoing. The burden is on them to protect people's privacy. And the burden is on them to tell taxpayers their rights. That's the attitude they should have.
"But that's definitely not the attitude they have today. If our investigations have shown us anything, it's that bureaucracies don't do what's efficient. They do what's convenient—at least, what's convenient for them.
"Well, principles aren't always convenient. And what we have here is a matter of principle. So we're going to insist that the IRS do their job—the right way.
"Now, these reforms are simply common sense. All we're saying are things like, 'Don't target people because of their political beliefs. Don't tax donations to tax-exempt groups. Don't send taxpayer information to your private email.' Pretty simple stuff.
"And there's another thing we've learned. And that is, this kind of mischief grows in the shade. We found out about this stuff because we dug deep. The only way to hold big bureaucracies accountable is through rigorous, effective oversight.
"But the thought I want to close with is this: All the confusion, all the unfairness and frustration—all this comes from the fact that our tax code is a mess. It's way too complicated. It punishes people for working, saving, investing—all the things we need to build a healthy economy. Sometimes it even punishes people from beyond the grave.
"That's why today we're here to repeal the death tax. People work hard and pay taxes all their lives. They've earned the right to leave something for their kids—often a family business—without being penalized for it. And this tax doesn't just hit the big guy. It hits the little guy—like the small business and the family farm. It is both unwise and unfair, and it needs to go.
"In fact, we need to replace our whole tax code. We need to make it simpler, flatter, and fairer. That would create more opportunity in our country. And it would build a healthier economy for all. So I'm glad we're taking a step in that direction today. And I'm glad we're putting hardworking taxpayers and their concerns front and center."
"Welcome, everyone, to our second hearing. The reason we're here today is to strengthen one of the most important federal programs, Medicare, which provides necessary healthcare services to millions of our nation's seniors. Every year, Medicare loses billions of taxpayer dollars through fraud and improper payments. And today we're going to find out what the administration is doing to stop it.
"When we first constituted this subcommittee at the beginning of the Congress, the ranking member and I talked about our shared goal of working together, establishing the facts, and making government work better for all Americans. Today I have the unique privilege of holding a hearing on a topic I know my friend Mr. Lewis has worked on for many years, including holding hearings and producing legislation as the chairman of this very subcommittee.
"I know I'm speaking for all of us when I say that we are extremely concerned about Medicare fraud. It remains a serious, evolving threat. There are billions of dollars at stake. And there continues to be a lot more work to be done to get ahead of the criminals and get it under control. So today's hearing is a continuation of the significant work that these members and the Congress have done in the past, and we're going to be taking a look at the administration's current efforts and ways we can improve Medicare payment integrity.
"To begin, I want to emphasize just how big of a problem this is. Last year, the federal government lost $124.7 billion dollars in improper payments across 124 programs. Of that $124 billion, one program accounted for $60 billion—or nearly half of the losses: Medicare. Because the program is so large and susceptible to abuse, the Government Accountability Office has singled it out as a high risk for fraud every year since they started keeping track in 1990.
"Historically, CMS has used a method called 'pay and chase' in processing Medicare payments, first paying for a charge, and then later looking back to check on the validity of the transaction and potentially trying to claw back the money if the payment was made improperly. As you can imagine, that strategy isn't very effective. Time and again we have seen fraudsters bilk the system for a few million dollars, shut down, and pop up under a new name to run their scams all over again. The Medicare program is getting outsmarted by these methods and the proof is in the unacceptably high rate of improper payments each year.
"In 2010, I proposed a new approach to help CMS work smarter. Instead of 'pay and chase,' CMS should use the same kind of cutting-edge predictive analytics technology that private companies use successfully to look at transaction data in real time and identify potentially fraudulent charges—stopping the payment before the money goes out the door. Credit cards use a similar system to identify a potentially fraudulent charge and stop payment while they further investigate the claim. The framework of that idea was later enacted as part of the Small Business Jobs Act of 2010.
"The system created by CMS to incorporate data analytics to protect Medicare is called the Fraud Prevention System, or FPS. In its first year, FPS got off to a rocky start—the Health and Human Services Inspector General could not even certify any of the system's results. In its second year, ending in July 2013, the Inspector General certified that the system had returned one dollar and thirty-four cents for each dollar invested that year, totaling about $54.2 million in savings.
"Now $54.2 million dollars is a lot of money, but it is quite literally a drop in the bucket when compared to the $60 billion that Medicare programs lost last year. As it currently operates, FPS is catching less than 1 percent of improper payments. And I should add that disappointingly, CMS is still primarily relying on the pay-and-chase model to go after money that has already been paid out improperly, rather than stopping improper payments on the front end.
"I continue to think that the idea behind FPS is sound, but taxpayers are entitled to see that idea implemented with excellence. Each dollar we fail to secure from fraud and improper payment is a dollar that isn't going to needed healthcare services for our seniors. And when we look around at what private companies are doing to protect the integrity of their transactions, it's clear that so far, FPS is leaving a lot on the table.
"For the first panel, this subcommittee wants to hear directly from CMS and the Office of the Inspector General about how they are using FPS and other data sources to identify emerging trends in Medicare fraud. And we want to know how CMS and OIG are coordinating their efforts with the Department of Justice to share data and prosecute Medicare fraudsters. I'll note here that regrettably, we invited the Department of Justice to testify about these issues today, but they were unable to provide a witness.
"On the second panel, we'll hear from two witnesses who previously served in the administration at DOJ and CMS, respectively, to get their insights about the government's performance on these issues. Another witness will tell us about how CMS and DOJ are collaborating with the private sector to address fraud issues affecting both Medicare and private insurers. And finally we'll hear about how Visa, a private-sector company, has used predictive analytics to stop fraud. Visa's global rate of fraud is 6 basis points—meaning 99.4 percent of the $10 trillion dollars in payments it processes globally are fraud-free. That's quite an impressive track record, and one we hope to learn a thing or two from.
"We look forward to hearing from all of our witnesses and thank them for their consideration in appearing today."
"Many of us have worked for a long time to repeal this flawed formula and replace it with a more patient-centered system. Now we have a chance to get it done," said Ways and Means Committee Chairman Paul Ryan (R-WI). "This package is the best opportunity to turn the page on years of short-term fixes so that we can finally make the reforms we need to strengthen Medicare for our seniors. This is real patient-centered reform—done in a bipartisan way—and I urge all of my colleagues to support it."
"This legislation provides a real opportunity to create stability for seniors and doctors by doing away with the flawed SGR system and replacing it with one that rewards quality and innovation," said Ways and Means Committee Ranking Member Sander Levin (D-MI). "Resulting from bipartisan negotiations, this package combines the end of SGR once and for all with important extensions of the Children’s Health Insurance Program and other critical health provisions, including funding for community health centers."
"We can see the light at the end of the SGR tunnel—finally. Our bipartisan product begins the task of strengthening Medicare over the long term," said Energy and Commerce Committee Chairman Fred Upton (R–MI). "This responsible legislative package reflects years of bipartisan work, is a good deal for seniors, and a good deal for children too. It’s time to put a stop once and for all to the repeated SGR crises and start to put Medicare on a stronger path forward for our seniors."
"Finally, after a decade of trying, we have a bipartisan bill that will permanently repeal the flawed SGR and move Medicare to a health care system based on quality and efficiency, that is good for seniors and doctors alike," said Energy and Commerce Committee Ranking Member Frank Pallone (D-NJ). "As with any bipartisan effort, this legislation reflects give and take on both sides. However, we have come to a balanced compromise that will end uncertainty in the system, extend the Children’s Health Insurance Program (CHIP), fund Community Health Centers, and make permanent the Qualifying Individual (QI) program that helps low income seniors pay their Medicare premiums."
The House is expected to consider this legislation this week.
WASHINGTON — Today bipartisan leaders from the House Ways and Means and Energy and Commerce Committees released a working summary outlining the broader framework of an agreement being negotiated to permanently replace the broken Medicare Sustainable Growth Rate (SGR) formula with a system that rewards quality, efficiency, and innovation. Committee leaders continue to make progress negotiating a comprehensive agreement that would further strengthen Medicare, extend vital health provisions, and extend the Children’s Health Insurance Program. This broader agreement builds upon the SGR Repeal and Medicare Provider Payment Modernization Act, H.R. 1470—legislation reintroduced yesterday in the House along with a companion in the Senate.
Click here to see a working summary of the SGR package.
“This framework would be an important first step to saving Medicare for our seniors,” said Ways and Means Committee Chairman Paul Ryan (R-WI). “These reforms would strengthen Medicare over the long term and move us toward a more patient-centered system."
“We have an important opportunity to do away with the flawed SGR once and for all and create more stability for seniors and doctors by putting Medicare and the way we pay physicians within the program on a firmer footing,” said Ways and Means Committee Ranking Member Sander Levin (D-MI). “It is also vital that we extend the Children’s Health Insurance Program and other critical health provisions, including funding for community health centers. I’m optimistic that we will soon reach a comprehensive bipartisan agreement long in the making.”
“This bipartisan agreement puts us on the road to real reforms to strengthen Medicare for our seniors and puts the broken Sustainable Growth Rate in the rearview mirror forever,” said Energy and Commerce Committee Chairman Fred Upton (R-MI). “The SGR has generated repeated crises for nearly two decades. We have a historic opportunity to finally move to a system that promotes quality over quantity and begins the important work of addressing Medicare’s structural issues. This deal is good for seniors; it’s good for children. Let’s get this done.”
“I am encouraged by the progress we are making to fix the SGR once and for all and end this vicious cycle of kicking the can down the road,” said Energy and Commerce Committee Ranking Member Frank Pallone (D-NJ). “I am pleased that this bipartisan package, which strengthens Medicare for seniors and doctors alike, also extends critical programs such as CHIP and Community Health Center funding, and includes important permanent protections for low-income seniors and families.”
The members write, “The cumulative effects of the administration’s policies relating to the MA program have resulted in a roughly 10 percent cut to the program over the past several years. A recent report from Oliver Wyman suggests that the cuts and policies from the Call Letters between 2014 and 2015 cost beneficiaries, on average, an additional $60 to $140 per month. Additionally, according to CMS data, beneficiaries had their choices of MA plans reduced during this period.”The members are urging the administration to reverse course on proposed policy changes that would only exacerbate these issues. They write, “We worry that more and more seniors will be unable to choose a MA plan, while millions more could face reduced benefits and higher costs. We are particularly concerned with the agency’s regulatory policies with respect to risk adjustment, STARS measures, and coding adjustments.”
The letter was signed by: Energy and Commerce Health Subcommittee Chairman Joe Pitts (R-PA), Ways and Means Health Subcommittee Chairman Kevin Brady (R-TX), Energy and Commerce full committee Vice Chairman Marsha Blackburn (R-TN), Energy and Commerce full committee Chairman Emeritus Joe Barton (R-TX), Rep. Gus Bilirakis (R-FL), Rep. Diane Black (R-TN), Rep. Charles Boustany, Jr., M.D. (R-LA), Rep. Susan Brooks (R-IN), Rep. Vern Buchanan (R-FL), Rep. Larry Bucshon, M.D. (R-IN), Rep. Michael C. Burgess, M.D. (R-TX), Rep. Chris Collins (R-NY), Rep. Kevin Cramer (R-ND), Rep. Renee Ellmers (R-NC), Rep. Morgan Griffith (R-VA), Rep. Greg Harper (R-MS), Rep. Lynn Jenkins (R-KS), Rep. Bill Johnson (R-OH), Rep. Mike Kelly (R-PA), Rep. Bob Latta (R-OH), Rep. Billy Long (R-MO), Rep. David McKinley (R-WV), Rep. Patrick Meehan (R-PA), Rep. Markwayne Mullin (R-OK), Rep. Kristi Noem (R-SD), Rep. Devin Nunes (R-CA), Rep. Pete Olson (R-TX), Rep. Erik Paulsen (R-MN), Rep. David Reichert (R-WA), Rep. James Renacci (R-OH), Rep. Peter Roskam (R-IL), Rep. Aaron Schock (R-IL), Rep. Adrian Smith (R-NE), Rep. Pat Tiberi (R-OH), Rep. Ed Whitfield (R-KY), and Rep. Todd Young (R-IN).
Read the complete letter online here.
The legislation—nearly identical to bills introduced in the House and Senate last year—was introduced by Rep. Michael C. Burgess, M.D. (R-TX), Senate Finance Committee Chairman Orrin Hatch (R-UT), House Energy and Commerce Committee Chairman Fred Upton (R-MI), House Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ), House Energy and Commerce Health Subcommittee Chairman Joe Pitts (R-PA), House Energy and Commerce Health Subcommittee Ranking Member Gene Green (D-TX), House Ways and Means Committee Chairman Paul Ryan (R-WI), House Ways and Means Committee Ranking Member Sander Levin (D-MI), House Ways and Means Health Subcommittee Chairman Kevin Brady (R-TX), House Ways and Means Health Subcommittee Ranking Member Jim McDermott (D-WA), and Rep. Charles Boustany, Jr., M.D. (R-LA).
This proposal will:
The SGR formula—the mechanism that ties physician payment updates to the relationship between overall fee schedule spending and growth in gross domestic product (GDP)—is fundamentally broken. The flawed formula has led to 17 short-term patches enacted by Congress to prevent significant Medicare reimbursement rate cuts over the past decade. This bipartisan policy agreement is an important milestone in finally resolving the flawed SGR formula, providing certainty for seniors and their physicians, and creating a system that promotes the highest quality of care.
A section by section of the bill can be found here.
-Committee on Ways and Means Views and Estimates on the Fiscal Year 2016 Federal Budget.
-H.R. 529, A bill to amend the Internal Revenue Code of 1986 to improve 529 plans.
-H.R. 622, A bill to amend the Internal Revenue Code of 1986 to make permanent the deduction of State and local general sales taxes.
-H.R. 880, A bill to amend the Internal Revenue Code of 1986 to simplify and make permanent the research credit.
Additional Markup Materials
JCT Description of Amendment in the Nature of a Substitute to H.R. 880 Green Sheet
Committee on Ways and Means Views and Estimates on the Fiscal Year 2016 Federal Budget was ordered favorably reported to the House of Representatives by voice vote (with a quorum being present).
Amendment by Mr. Davis to the amendment in the nature of a substitute, in which under the amendment, 529 programs would be required to provide certain information regarding contributions and distributions required by the Secretary to be made public in aggregate form.
The vote on the amendment by Mr. Davis to the amendment in the nature of a substitute, in which under the amendment, 529 programs would be required to provide certain information regarding contributions and distributions required by the Secretary to be made public in aggregate form, was not agreed to by a roll call vote of 21 nays to 13 yeas (with a quorum being present).
Amendment by Mr. Davis to the amendment in the nature of a substitute, which under the amendment disqualifies 529 plans that accept contributions from taxpayers with adjusted gross incomes of more than three million dollars.
The vote on the amendment by Mr. Davis to the amendment in the nature of a substitute, in which under the amendment taxpayers with adjusted gross incomes of more than three million dollars would not be eligible to make contributions to 529 accounts, was not agreed to by a roll call vote of 23 nays to 14 yeas (with a quorum being present).
H.R. 529 was ordered favorably reported to the House of Representatives as amended by voice vote (with a quorum being present).
Chairman Roskam has scheduled an organizational meeting of the Subcommittee on Oversight to be held in B-318 Rayburn House Office Building on Wednesday, February 11, 2015, at 10:00 a.m.
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