News From the
Committee on Small Business
Subcommittee on Regulations, Healthcare and Trade
Charlie Gonzalez, Chairman

CONTACT: Shripal Shah (Gonzalez) – (202) 226-7524
Erin Donar  / Jaime Zapata – (202) 226-3636

Committee Hears from the Medical Community on the Effects of CMS

Programs and Rules on Small Firms

WASHINGTON, DC – Small medical providers—including physicians, pharmacies and laboratories—are the backbone of the nation’s healthcare system. Changes to programs and regulations by the Centers for Medicare and Medicaid Services (CMS) have a profound impact on the bottom lines of these small firms and the services they can offer patients. Today, the Subcommittee on Regulations, Health Care and Trade continued oversight of CMS’ efforts. Members of the Congressional panel heard testimony from representatives of the medical profession, who said the Centers are not considering the needs of small businesses appropriately.

“When federal agencies make rules, the law requires them to consider their effect on entrepreneurs, and examine less burdensome alternatives,” said Chairman Charlie Gonzalez (TX-20). “Communities across the country depend on small medical practices for their care. If CMS disregards the needs of these providers, it undermines their ability to serve patients.”

Witnesses voiced particular concern about the implementation of the Recovery Audit Contractor (RAC) program, designed to correct payment errors. CMS says these errors amount to $10.8 billion a year. However, witnesses noted the RAC initiative focuses almost exclusively on recovering overpayments made by the agency and ignores the money owed entrepreneurs.

“CMS is right to seek an efficient payment system, but that doesn’t mean it should only correct the errors that favor the agency. Fairness and accurate accounting matter,” said Chairman Gonzalez. “In the current economic climate, many small providers are struggling to stay afloat. If CMS owes them money, they should be paid.”

The issue of CMS’ rule for Medicaid reimbursement to pharmacies, which the Committee has investigated in prior hearings, was also raised by today’s witnesses. They voiced strong objection to a rule that would reimburse pharmacies only 64% of their costs for acquiring generic drugs. The proposal discourages small firm participation in the Medicaid program and would reduce patient access to prescription medicine.

“We all want a healthcare system that serves patients well and is cost effective. The small medical provider market can help make that a reality. It’s one of our most valuable assets,” said Chairman Gonzalez. “CMS officials should keep that in mind, because ignoring that fact is more than just short-sighted—it threatens to leave millions of Americans without access to the high quality care they need and deserve.”

Click here to view witness testimony.
Click here to view video of the hearing.