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Senate may not have time to pass CMS proposal

Quality Improvement Monitor, November 30, 2007

CMS' proposed value-based purchasing plan has the initial support of the Senate Finance Committee, but time is running out this year to pass the legislation, Congressional and lobbying sources told CongressNow.

The CMS proposal would reduce diagnostic-related group (DRG) payments for Medicare patients, but give hospitals a chance to earn the money back through stellar performance or dramatic improvement.

The plan has the initial support of Senators Max Baucus (D-MT) and Chuck Grassley (R-IA), the chairman and ranking member of the Senate Finance Committee, which has jurisdiction over Medicare, CongressNow said. But CMS needs new statutory authority to base payments on performance and time is running out for Congress to make that happen, various sources told CongressNow.

One healthcare lobbyist told the publication the bill was not likely to pass this year, but would be floated as a "trial balloon" with hopes of passing it next year.

Meanwhile, the American Hospital Association (AHA) told CQ Healthbeat that the proposal could create economic hardship for some hospitals AHA has "some real concerns about the financial impact of this proposal," Nickels told CQ Healthbeat. "Two to 5% reduction in hospital payments [is] a significant cut, and there's a lot of uncertainty in how that money is returned to the system or if that money is returned to the system."

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