Deal targets 'unfair' Medicare payments

Medicare no longer would penalize Minnesota, Wisconsin and other states that provide high-quality, low-cost health care under a House agreement announced Thursday in Washington by U.S. Rep. Betty McCollum and three other lawmakers.

"This agreement will transform our outdated Medicare reimbursement

Medicare, the nation's health plan for the elderly, currently pays out more to other states and rewards doctors for ordering more tests and procedures, whether patients need them or not. That volume-based payment system is the main reason Medicare spends $9,400 per beneficiary in Florida but only $6,600 in Minnesota.

McCollum said House Speaker Nancy Pelosi and the chairmen of three key House committees have agreed to include language basing Medicare payments on quality, not quantity, in their version of President Barack Obama's health-care reform bill.

The St. Paul Democrat called the agreement "historic."

"The legislative language, in a nutshell, is going to modernize Medicare payments, deliver better quality and in doing that will save billions of dollars for taxpayers," she said.

She flatly predicted the House would pass the language and the bill. The Senate has not yet agreed to change Medicare reimbursement rates, but McCollum predicted a House-Senate conference committee would include the negotiated changes in the health care reform bill it sends to Obama.

Under the agreement, the Institute of Medicine, a branch of the National Academy of Sciences, would recommend within a year a Medicare payment system based on quality and value that also would correct geographic inequities. The secretary of health and human services would immediately implement the pay changes. The legislation provides $4 billion a year in 2012 and 2013 to cover the revised payments.

For the past five months, McCollum, U.S. Rep . Ron Kind, D-Wis., and two other lawmakers from states penalized by Medicare payment disparities headed a coalition of Democratic legislators negotiating the reform package with House leaders. In July, they announced the leaders had agreed to their goal of overhauling the Medicare payment system -- in part because coalition members threatened to vote against the health-care bill if it didn't transform Medicare. The latest agreement fills in the details.

"If we're going to reform health care, we have to fix what's broken in the system, and the Medicare reimbursement rates are broken," McCollum said.