U.S. Representative Rick Larsen (WA-02) today praised an agreement that brings Congress one step closer to passing health care reform that works for Washington state. The deal was reached between House leadership and a health care ‘quality coalition’ of Members of Congress including Larsen, other Washington Democrats and Representatives from sixteen other states who are working to fix long-standing Medicare reimbursement problems that have hurt access to health care for Washington seniors. The agreement calls for two studies which will reform Medicare payments to reward high-quality, cost-efficient care and remedy geographic disparities to help Washington state patients get the care they need.
“Today we are one step closer to getting health care reform that works for Washington state,” said Larsen. “I thank my colleagues Rep. Jay Inslee and Norm Dicks for representing our state in negotiations with House leadership and for delivering a deal that helps bring fairness for Washington state and greater access to care for local seniors.”
Under the current system, Washington state is penalized for providing higher-quality, lower-cost care. The average federal Medicare payment per patient in Everett, Washington is $6,905 a patient in McAllen, Texas averages $14,946. But while the quality of care in Everett is the same if not better compared to McAllen, medical providers there get paid more than twice as much, costing taxpayers more than twice as much and punishing Washington providers. This inequity makes Washington physicians less likely to accept patients on Medicare, making it more difficult for local seniors to find a doctor who will accept their insurance.
Larsen has pushed to get a fair deal for Washington state and change the way health care is delivered to reward “value not volume” – value for the patient, not volume of tests or procedures. To that end, Larsen has sent letters to House leadership and communicated his concerns to the White House.
“One hundred and four thousand of my constituents don’t have health insurance, and local families and businesses are struggling with the high cost of care,” said Larsen. “My constituents deserve health care reform that works for our state. That is why I am working to pass health care reform that expands access to care for local seniors and other patients. Our deal is an important step toward reaching that goal.”
Below are the details of the deal.
Paying for Value, Not Volume:
The Institute of Medicine (IOM) will conduct a study and provide recommendations on changing the Medicare payment system to reward “high-value” care, which is defined as the “efficient delivery of high quality, evidence-based, patient-centered care.” The study will be completed by September 2011.
The IOM’s quality and value-based payment recommendations will automatically go into effect unless Congress objects within sixty days.
The new value-based payment system will be implemented before the public plan goes into effect in 2013.
What does this mean for Washington State? Washington state doctors and hospitals are already providing the kind of innovative, high quality care that this new payment system would recognize and reward. Paying for value, not volume, will finally reward Washington state doctors and hospitals for their efficient, high quality care.
Addressing Geographic Disparity in Payment Rates:
The Institute of Medicine (IOM) will conduct a study to evaluate the payment rates that Medicare uses to pay medical providers for office visits and medical procedures. The study will make recommendations to improve the base payment rates and fix geographic disparity in Medicare payments.
The Secretary of Health and Human Services (HHS) is required to implement the new payment rates recommended by the IOM study. This means that they will go into effect without any political influence by Congress.
Reforming Medicare payment rates is intended to reward low-cost, high-quality care and penalize high-cost, low quality care. The new payment rates will be implemented before the public plan goes into effect in 2013.
The agreement invests $8 billion over two years to compensate areas that were penalized by the old payment rates.
What does this mean for Washington State? Medicare payment rates currently penalize Washington state for its efficient, high quality care. Fixing this long-standing inequity would finally recognize and reward Washington state doctors and hospitals for their efficient care and could mean million of dollars in additional Medicare payments for Washington state doctors and hospitals. Higher Medicare reimbursements also mean that doctors and hospitals could be more likely to accept new Medicare patients.
