Miller said the cost estimates for repealing the SGR depend on projections of growth in the volume and intensity of services provided by physicians and other health professionals and the relationship between that volume growth and gross domestic product growth. The difficulty in making the estimates, because of the unpredictability of volume growth, has made the estimates more volatile – a point that was constantly stated during the hearing.

Miller also said the current payment system must move from volume-drive systems to systems that focus on quality, coordination, and accountability.

“We should not simply repeal the SGR. We also must change the underlying fee-for-service system that Medicare uses to pay physicians. Fee-for-service promotes volume over value. Physicians are rewarded for doing more tests and more procedures, even when unnecessary,” Baucus said.

Bruce Steinwald, a healthcare consultant, mentioned that now is a particularly “fertile period” to do away with SGR.

“For years, the stance of the profession seemed to be repeal the SGR and then we’ll talk about reform,” Steinwald said. “Now it seems to me that the medical profession recognizes [reform] needs to be part of the same conversation.”

Baucus noted that the payments models being currently tested by the Center for Medicare and Medicaid Services (CMS) are not ready to replace the existing fee-for-service system.

Dr. Kavita Patel, managing director of the Engelberg Center for Health Care Reform at the Brookings Institution, called for harmonization of all the existing incentive payment initiatives under the CMS into a “care coordination program” that would a offer a transition pathway to novel methods of payment.

“Short-term strategies that will result in better care coordination between primary care physicians and specialists are the ultimate answer but the question remains on how to get there,” Patel said.

Bipartisan support in both chambers of Congress to act quickly has increased in recent months. Panels in the House and Senate are eagerly pursuing a permanent “doc fix.”

Last month, the Energy and Commerce and Ways and Means panels outlined additional details of their latest draft plan to reform the current system. The proposal would also repeal the SGR and replace with a more “fair and stable system” of physician payment.

Baucus and Hatch sent a letter to healthcare providers Friday asking specific questions about repealing and replacing the SGR. Tuesday’s hearing made clear that there is no agreement on the best path forward yet.