Minneapolis, June 17, 2009--Sen. Amy Klobuchar, D-Minn., introduced a bill last week aimed at correcting the geographic disparities in Medicare payments and rewarding physicians for delivering efficient care.

The Medicare Payment Improvement Act proposes changes in Medicare reimbursement that would ensure that providers are paid for the quality, rather than quantity, of the care they provide and reduce the differences in spending among providers in different parts of the country. Currently, the average Medicare patient in Miami receives approximately $15,000 worth of care in a year while the average patient in Minneapolis receives only $7,000 in care. The legislation would also encourage the development of integrated delivery systems such as Mayo Clinic, which has been held up as an example of an organization that provides high-quality care at a cost well below the national average.

Medicare does not take into account the value of care provided when determining payments. Instead, it rewards volume—paying physicians for tests and surgeries that may not improve a patient’s condition. The Medicare Payment Improvement Act would create a value index to determine physician fees that will link rewards to outcomes, rather than volume.

As a member of the Geographic Equity in Medicare Coalition, which has been working to end the disparities in patient services and physician reimbursement, the MMA supports the idea of rewarding physicians for value.

“If you look at surveys that have been done, Minnesota is in the top quintile for quality and the bottom quintile for cost. Already we’re doing a better job on both the quality and cost front. Why shouldn’t we be rewarded for that?” says MMA President Noel Peterson, M.D. “Frankly, if all states did as well as Minnesota did on cost and quality issues, the government could save an estimated $1.5 trillion over the next 10 years.”

Peterson and Dave Renner, the MMA’s director of state and federal legislation, expect this bill (S1249) or its House companion (HR2844), which is co-sponsored by Rep. Tim Walz, D-Minn., to end up in a larger piece of health care reform legislation. Both bills have bipartisan support.

Peterson says if the proposed measures become law, “it’s likely that there would be increased reimbursement to Minnesota physicians because they’re already providing higher value service.”