Cantwell Urges Implementation of Medicare Provision that Rewards Efficiency

At hearing, Cantwell advocates for new policy to pay Medicare providers for value instead of volume

WASHINGTON, D.C. –Today, during a Senate Finance Committee hearing, U.S. Senator Maria Cantwell (D-WA) emphasized the importance of her Medicare Value Payment Modifier to efforts to reform the current Medicare fee-for-service payment system and improve the health care delivery system. Currently, the fee-for-service system often rewards practitioners for ordering redundant or unnecessary tests and procedures.    

Cantwell authored a Medicare Value-Based payment provision – enacted into law in 2010 as part of the Affordable Care Act – that incorporates a quality-and-cost ratio to Medicare physician payment calculations. This changes the Medicare fee-for-service system -- by rewarding providers for positive health outcomes instead of quantity of services. The Centers for Medicare and Medicaid Services (CMS) plan to begin implementing Cantwell’s “value-based index” in 2015, and it will apply to all Medicare providers by 2017.

“We did write into the Affordable Care Act a Value-Based Payment Modifier that CMS is putting preliminary rules out on now and would be implemented fully by 2017,” said Cantwell at today’s hearing. “We get that there are certain regions of parts of the country that may be more uniquely challenged to face this, but we’re talking about billions of dollars of savings here if you move off of fee-for-service. We definitely believe that the index should be put in place. We will certainly be working with everyone to be more vocal about it because we do think it is an important interim step.”

Video of today’s hearing available here.

The value-based index will particularly benefit Washington state patients and providers by ending Medicare’s practice of paying per service. The average yearly cost for a Medicare patient in Washington state before health care reform was $7,100, roughly $1,200 less than the national average, with 34 states having higher per-person Medicare costs than Washington. This will help improve access to Medicare providers by finally rewarding Washington doctors for the low-cost, quality care they provide.

“This is a philosophy from the Northwest,” continued Cantwell at today’s hearing. “We are more efficient and we have better outcomes. So now we want the rest of the nation to move toward that same level of efficiency, so that we’re not penalized.”

During the hearing, Cantwell also raised the possibility of accelerating payment reforms and considering how savings can go towards supporting Graduate Medical Education (GME), particularly primary care. Primary-care doctors can play a significant role in cutting health care costs by skillfully coordinating and overseeing patient care. However, the current system underpays these health providers compared to specialty care, making primary care a less attractive option for medical students and ultimately reducing patient access to necessary care.                                                

A measure in the Affordable Care Act expands training capacity for primary-care physicians and includes incentives for medical students who opt for a career in primary care, increasing the availability of care, especially for those in rural and underserved communities. For a summary of Cantwell’s key reforms included in the law, click here.