Late last week, Iowa’s Democratic Representatives overcame steep political odds in the House and struck a deal with leadership to add language to the health reform bill seeking to address the Medicare geographic variation issue.  This deal, spearheaded by Iowa Congressman Bruce Braley, appears to have broken the indefinite stalemate in the Energy and Commerce Committee that until then had prevented the legislation from moving forward.  Iowa Congressman Dave Loebsack also joined the conversation with leadership and defended Braley’s proposal threatening to withhold his vote on the legislation unless this issue was addressed.  This comes at a critical juncture in the health care reform debate, and IHA supports and applauds the efforts of Iowa’s House Democrats in addressing the long-standing problem of Medicare geographic disparity.

Specifically the proposal instructs the Institute of Medicine (IOM) to conduct two studies.  For the first study, IOM will have one year to evaluate geographic adjustment factors in the Medicare payment formulas including the wage index and the geographic practice cost index to determine whether the data and assumptions for the adjustments are accurate or based on flawed data.  The Secretary of Health and Human Services (HHS) must then implement the findings from the study automatically without Congressional review.  The legislation would establish funding available for FYs 2012 and 2013 to increase payment rates in regions where rates are low and hold harmless areas where payments have been historically inflated.  The hold harmless protection expires after FY 2013 and any adjustments due to the IOM recommendations will become budget neutral.

 The legislation also instructs IOM to complete a study of geographic variation in health care spending and promoting high value health care, with specific instructions to consider adopting a value index.  IOM will have two years to make recommendations to HHS on how to promote the efficient delivery of high quality, evidence-based, patient-centered care.  HHS will then submit a report to Congress on implementing a plan to revise Medicare payment systems based on the finding from the above IOM study, which will be implemented unless Congress votes against it by February 28, 2012. 

IHA also continues to work on the issue of value-based purchasing with a Medicare cost-per-beneficiary component with the Senate Finance Committee where Senator Chuck Grassley has been a leading voice on the issue during the bi-partisan negotiations.  The Senate approach would be in accord with IHA’s long standing position in support of a value-based purchasing program that not only measures quality but also resource utilization and efficiency. 

 While health reform is far from final, Iowa’s congressional delegation continues to stand up for Iowa hospitals and health care providers in the debate and deserve recognition for their efforts when they return home for the upcoming August recess.