Senators Introduce Legislation to Add Pay-for-Performance to Medicare

Senate Finance Committee Chairman Charles E. Grassley (R-IA) and committee ranking minority member Max Baucus (D-MT) have introduced legislation, the “Medicare Value Purchasing Act of 2005” (S. 1356) that would establish a two-phase implementation of paying providers bonuses for delivering high quality care to patients. In the first phase, providers’ reimbursement would be tied to reporting quality data in much the same way hospitals were required to do under the MMA. In the second phase, Medicare providers would voluntarily participate in “value-based purchasing,” under which a portion of their payments would be set aside to create a quality pool. These funds would be given to providers meeting quality standards or those making progress toward meeting them. This phase would begin in 2008 for physicians.

Pay-for-performance (P4P) payments would begin at 1 percent of Medicare payments for each provider group, rising to 2 percent within five years. The P4P fund would be valued at about $2.5 billion initially, increasing to $7.5 billion annually by 2013. CMS would be charged with developing the quality measures, working with a new quality organization established under the bill, health care providers, and other organizations.

The P4P bill also includes a “sense of the Senate” resolution that changes need to be made to the Medicare physician payment system to prevent future reimbursement cuts, including the 4.3% reduction scheduled for next year.

ASH is very interested in developing appropriate quality measures for hematology and its Pay-for-Performance Task Force is working on developing viable performance measures to be used by CMS for practicing hematologists. 

For more information, please contact ASH Director of Government Relations & Practice Mila Becker at 202-776-0544.