As I know firsthand, at the heart of the Affordable Care Act was a recognition that we must transform how we pay for and deliver health care in this country. The law gave providers tools to establish Accountable Care Organizations, bundled payments, and other groundbreaking ways of paying for care. It also created the Center for Medicare and Medicaid Innovation, which tested many value-based payment models under the leadership of the Obama Administration.
These reforms have ushered in an evolution in health care delivery that we are witnessing unfold every day in our districts.
As we enter this new landscape, we have begun to hear calls to revisit certain other laws that have been in existence for many years. Today, we are discussing whether several laws that prohibit physician self-referrals in Medicare, collectively known as the Stark Law, should be reexamined in light of our shift to a value-based payment system.
On this issue, we must proceed with care.
The Stark Law is an important tool that for nearly thirty years has protected Medicare beneficiaries from inappropriate referrals and overutilization of care. Despite its complexity, the core principle of the law is a simple one - that physicians should not make referrals to entities in which they or an immediate family member have a financial interest.
Evidence continues to document that these self-referrals have a detrimental impact on care. For example, a series of reports by the Government Accountability Office found that an exemption in the law permitting self-referrals for in-office ancillary services has directly increased overutilization and raised Medicare spending by billions of dollars.
However, the incentives that existed in a fee-for-service health care system are not the same as those in a value-based system. Integration of care may, in certain instances, involve financial arrangements that do not violate the basic spirit of the Stark Law.
We recognized this fact when we passed the Affordable Care Act, providing waiver authority to allow for providers to establish ACOs and other arrangements. In addition, the Obama Administration provided leeway through the regulatory process to facilitate new payment models. More recently, an ongoing Request for Information will provide additional information as to what may be done using existing statutory authority.
Before considering legislative action, I hope that this Committee will proceed with a process that befits an issue of such sensitivity and complexity. Unfortunately, no witnesses from the Office of the Inspector General or the Department of Justice were invited by the majority to join us this afternoon. It is critical that this be corrected in the future.
Finally, it is ironical that this Subcommittee is considering the impact of the Stark Law on the value-based approach of the ACA at the same time the Trump Administration continues to raise costs and reduce access to affordable health care in its never-ending zeal to sabotage the law.
In just the last few weeks, it has refused to defend protections for Americans with pre-existing conditions, stopped risk adjustment payments to health plans covering sicker patients, and again slashed payments to the Navigators that help people access health insurance. These and many other misguided efforts are raising costs for those Americans who need health coverage the most.
We should be examining and responding to this growing threat to affordable care. Instead, this Subcommittee has exacerbated it through its silence in the face of regulatory sabotage and its own legislative efforts to rip coverage away from millions of Americans.
