Sebelius Pledges to Work for Long-term Medicare Payment Solution if Confirmed as HHS Secretary

Kansas Gov. Kathleen Sebelius told a Senate committee last week that if confirmed as secretary of HHS, she would work to change Medicare's payment policies to increase the number of primary care physicians. She also vowed to work with Congress to find a long-term solution to problems associated with use of the sustainable growth rate, or SGR, formula, which is used to determine Medicare physician payment rates.

Sebelius, who testified before the Senate Health, Education, Labor and Pensions, or HELP, Committee, here on March 31 as part of her confirmation process, called for "refocusing the payment incentives so that primary care becomes a much more lucrative profession." There are relatively few health care professionals in preventive medicine compared with the number of subspecialists, said Sebelius, adding "if we focus on prevention and wellness, we will not need as many (sub)specialists."

Sebelius also called for "growing the market of primary care and family doctors" to place a greater emphasis on prevention, wellness and early intervention. Part of this process entails changes in the Medicare payment system and changes in graduate medical education, said Sebelius, a former state senator and Kansas insurance commissioner.

During the HELP Committee hearing, Sen. Patty Murray, D-Wash., asked about the SGR, assailing it as an outdated formula that relies on use of services rather than on health care outcomes to determine payments.

"If I am confirmed as secretary, that will be a top priority -- to work with those of you in Congress to address a long-term solution," said Sebelius. "I do believe as part of health reform, Medicare can lead by example, and part of the leadership will require a reconfiguration of the overall payment system. SGR is a part of it, but only a piece of it."

One of the overarching goals, said Sebelius, is to redirect payments to reward appropriate care, quality health care outcomes and preventive care. "We have a huge opportunity with the Medicare system to not only redesign and address the SGR itself, but also to redesign a whole payment system that redirects care to our senior population and our disabled population," she said.

If confirmed as HHS secretary, Sebelius will oversee CMS, the CDC, NIH, the FDA and other agencies that account for nearly $80 billion in annual discretionary spending and hundreds of billions more in entitlement programs.

Sebelius represents the administration's second attempt to fill the position of HHS secretary. The administration's first choice for the position, former Sen. Thomas Daschle, D-S.D., withdrew from consideration after it was reported he had paid $140,000 in back taxes. Although Sebelius and her husband recently paid $7,040 in back taxes and $878 in interest, that is not expected to derail her nomination, according to sources interviewed by AAFP News Now.