Medicare Reimbursement Issues Enter Health Reform Debate

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New legislation introduced yesterday would attempt to shift Medicare reimbursement policy to reward patient health outcomes, rather than the volume of services provided, MinnPost, a nonprofit online news organization, reports. "We need to be sure to keep score," said Sen. Amy Klobuchar, D-Minn., who introduced the bill, according to MinnPost. "That means measuring outcomes and rewarding providers that deliver quality results."

The site adds: "The Medicare Payment Improvement Act would create a value index for determining Medicare physician fees. The value would be calculated by a quality component, which would be determined by the secretary of Health and Human Services, divided by efficiency, which would be measured as total Medicare spending per beneficiary in the area. The legislation would also seek to link rewards to outcomes and reinforce coordinated health-care systems within communities" (Dizikes, 6/11).

Meanwhile, another Medicare payment reform proposal was introduced this week by California Democrats Sen. Diane Feinstein and Rep. Sam Farr, the Santa Rosa, Calif. Press Democrat reports. That proposal would do away with some geographic designations that cause physicians in "rural" areas to receive lower reimbursement rates than their colleagues in "urban" areas. The change would "dump" the urban and rural designations of counties that are classified as falling into larger metropolitan areas, called "Metropolitan Statistical Areas ... Local medical providers have long protested that the rural designation for Sonoma County has short-changed area medical providers because the reimbursement is significantly lower than those of nearby counties, such as Marin, which is designated urban, despite the county's economic growth and health care costs" (Espinoza, 6/11).

Also in Medicare reimbursement news, UnitedHealth Group, the largest U.S insurance company, is poised to lose money as the result of an "aggressive" Medicare strategy, Associated Press/Forbes reports. The company has federal contracts to provide Medicare services through private managed-care plans. But, in an effort to expand its market share to make up for recently reduced rates for its contracts, analysts said the company had overreached. Shares in UnitedHealth dropped Thursday, as the analysts lowered their expectations for the company's performance (6/11).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.