PEPC Submits Statement for the Record for the Energy & Commerce Hearing on Transparency and Competition

On March 28, the House Energy and Commerce Committee Health Subcommittee held a hearing focused on examining ideas to drive down the cost of health care through transparency and competition. 

PEPC submitted a statement for the record for the hearing, highlighting concerns around increasing consolidation in the health care market and the urgency it creates to ensure that value-based care is a path to sustainability for practices and physicians who are independent and wish to remain so.

PEPC highlighted evidence of the detrimental impact of hospital consolidation, such as:

  • An April 2022 analysis by Avalere Health and the Physicians Advocacy Institute (PAI) found a nearly 24 percent increase in the percentage of employed physicians during the COVID-19 pandemic (January 2020 to January 2022). By January 2022, the study found that 74 percent of physicians were employed by a hospital or corporate-entity.
  • A March 2023 study by the Harvard Kennedy School found that when physicians integrated with a hospital, they changed their care practices and increased their throughput, resulting in increased complications and worse patient outcomes. Moreover, integration increased rates of reimbursement by about 48 percent.
  • A January 2023 study found that, in 2018, health system physicians and hospitals delivered a marginally better performance on clinical quality and patient experience measures but spending and prices were substantially higher. This was especially true for small practices, and researchers concluded that the small quality differentials combined with large price differentials suggest that health systems have not realized their potential for better care at equal or lower cost.

PEPC proposed several recommendations for Congress and/or the Administration to take action, including:

  • Congress must invest in the Medicare physician fee schedule to ensure that providers are appropriately reimbursed for their services and to ensure that reimbursement accounts for rising overhead costs and inflation.
  • Congress should build upon existing site-neutrality rules and create more fairness in the payment system by passing legislation to ensure CMS pays the same rates across practice settings. Site neutral payment policies should be accompanied by an increase to reimbursement for Part B services given that reimbursement for these services is currently inadequate.
  • Congress should ensure that oversight agencies such as the Federal Trade Commission have the resources needed to be effective in researching and pursuing new and develop issues related to health care consolidation and competition.
  • Congress should urge CMS to prioritize physician-led models, and should extend the MACRA bonus for providers participating in advanced alternative payment models (AAPMs). Congress should also consider approaches to MACRA reform that focus on the doctor-patient relationship, and leverage the unique capability of physician-led groups to transform health care for the benefit of patients.

Read the full written testimony here.

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