The House healthcare reform legislation contains new provisions to revamp the way Medicare pays providers, lawmakers announced at a news briefing.
Specifically, the new language calls on the Institute of Medicine to conduct two studies, one of which would take place for one year after enactment of the bill, and would update Medicare's reimbursement formula to eliminate geographic disparities.
Disparities in payment have been a long-term, ongoing problem, said Rep. Jay Inslee (D-Wash.). Providers in Seattle get paid 15% less for a procedure than providers in New York, even though the cost of doing the procedure is the same, he said in an interview.“We need to change the way we pay doctors and hospitals,” Inslee told reporters, adding that the studies should be looked upon as “actions,” not just passive research.
The second study, which would take place over two years and be subject to congressional review, would implement a plan to base Medicare payment on quality of care rather than volume. Rep. Peter DeFazio (D-Ore.) said that current problems with Medicare reimbursement needed to be fixed first before establishing programs such as a public health plan option based on Medicare rates.