State hospital groups propose value-based payment reform

The deal cut by a group of large hospital associations to trim back $155 billion in federal health payment cuts may be in danger if a competing proposal centered around value-based payment gains momentum.

A group of state hospital associations calling itself the Value Coalition has come together to oppose the concessions made by the American Hospital Association, the Catholic Health Association and the Federation of American Hospitals, which would phase out the $155 billion in cuts over 10 years. They say that across-the-board Medicare cuts will only make quality disincentives built by Medicare worse. States involved include Iowa, Maine, Minnesota, South Dakota and Montana.

Over the short term, the state groups are proposing a new system in which regions where hospitals producing higher-than-average quality scores, or lower-than-average costs, receive higher Medicare payments. Medicare-participating physicians in those regions would also see higher payments. Eventually, the group would like to see Medicare implement episode-of-care payment models, as well as other comprehensive care payment models.

To learn more about this proposal:
- read the coalition's position paper (.pdf)

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