Senate Finance Committee Chairman Max Baucus and Ranking Member Chuck Grassley released a lengthy policy paper on April 28, 2009 discussing options for reducing health care costs and improving quality in the health care delivery system, including significant Medicare payment reform proposals. Key areas addressed in the paper include the following:

  • Promoting Quality Care – Policy options to promote quality in the Medicare program include: establishing value‐based purchasing programs for hospitals, home health, and SNFs by FY 2012; expanding programs leading to value‐based purchasing for doctors, IRFs, and LTCHs; tying Medicare Advantage payments to quality of care; and restricting utilization of diagnostic imaging services.
  • Fostering Care Coordination and Provider Collaboration – Policy options to enhance care management efforts include: establishing Medicare payment incentives for hospitals that reduce preventable hospital readmissions; providing a single bundled Medicare payment for acute and post‐acute episodes of care; establishing Medicare pilot programs of patient‐centered care coordination models for the chronically ill ; making reforms to Medicare physician reimbursement rates.
  • Infrastructure Investments – Potential health delivery infrastructure investments include:  additional efforts to support widespread adoption and meaningful use of health information technology (beyond ARRA provisions); the development of quality measures; the establishment of a independent institute to conduct comparative effectiveness research; and improvements to health care workforce training.
  • Transparency– Policy options to promote transparency include: requiring drug and device manufacturers to report publicly certain payments to physicians; establishing new restrictions on specialty hospitals; and expanding information for consumers on nursing home quality.
  • Other Health Care Delivery Options – Among other things, the plan calls for various steps to promote primary care (including providing primary care practitioners and targeted general surgeons with a 5% Medicare payment bonus) and expanded efforts to fight Medicare fraud and abuse.

The the deadline for public comments is May 15, 2009. The document is the first of three sets of potential option papers, each covering a different topic area that members will discuss before a bipartisan “Chairman’s Mark” on comprehensive health care reform is developed. Policy option papers on increasing health care coverage and financing health care reform will be released following future roundtable discussions on those topics. Note that the Finance Committee held its roundtable discussion on access to health care coverage on May 5, 2009, so an options paper on that topic should be available in the near future. In addition, on May 12, the Senate Finance Committee is holding its third roundtable discussion, this one focusing on financing comprehensive health care reform.