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Pay-for-performance bill draws support

Quality Improvement Monitor, July 7, 2005

Healthcare providers, quality organizations, and trade groups say a pay-for-performance bill introduced in the Senate on June 30 has the potential to lower costs and improve care, according to BNA Health Care Daily Report.

The American Hospital Association, AARP, and General Motors have all expressed support for a bill introduced by Senate Finance Committee Chairman Charles E. Grassley (R-IA) and Senator Max Baucus of Montana, the committee's ranking Democrat. The bill would implement Institute of Medicine and Medicare Payment Advisory Commission recommendations to tie a portion of Medicare physician and hospital payments for services to quality of care.

"Experience from Medicare's demonstrations with hospitals and private insurer's initiatives with physicians and health plans indicates that 'pay for performance' gets results," AARP Group Executive Officer for Policy and Strategy John Rother said in a statement. "We can no longer simply pay the bills for healthcare without using those payments as an incentive to improve the quality of that care for Medicare beneficiaries."

Grassley and Baucus introduced the bill two weeks after House Ways and Means Chair Bill Thomas (R-CA) and health subcommittee chair Nancy Johnson (R-CT) asked Medicare to provide information on the development of quality indicators and the systems needed to report them in support of a pay-for-performance system.

The Senate Finance committee is expected to act on the pay for performance bill by the end of the year, Grassley said in a statement.

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