Healthcare industry executives speaking at a Senate Finance Committee roundtable hearing on June 14 agreed that the current Medicare physician payment system is in need of reform.

Speakers at the roundtable, including senior executives from healthcare payers and provider groups, agreed that Medicare’s current system of per-procedure or per-service payments to individual clinicians should be replaced by payments to groups of practitioners based on the quality of care. This approach would likely be similar to existing government initiatives such as the Accountable Care Organization (ACO) concept introduced in the Patient Protection and Affordable Care Act (PPACA). ACOs are expected to allow groups of physicians, hospitals, and other healthcare providers to better coordinate patient care, improving quality of care and reducing costs.

The hearing, held while the industry awaits a Supreme Court decision on the constitutionality of PPACA, was the committee’s second roundtable on Medicare physician payments. At the first roundtable, on May 10, four former administrators of the Centers for Medicare and Medicaid Services and CMS’s predecessor, the Health Care Financing Administration, agreed on the need to adopt bundled payments for physician services, among other reforms.

The Senate panel’s recommendations for reforming the payment system are expected within a week.