Baucus Bill and Delivery Reform

Sen. Baucus released a draft bill yesterday which we summarize in the key areas related to delivery reform. The full bill is included – Health Care Reform Mark Document FINAL


This bill outlines the huge increase in federal bureaucracy, which will be required to administer this plan. I have lifted specific language around the delivery reform that is of interest. The whole bill is attached.



 Hospital Value-Based Purchasing:

Establish a Hospital Value-Based Purchasing (VBP) program in Medicare that moves beyond pay-for-reporting on quality measures, to paying for hospitals‘ actual performance on these measures.

Beginning in FY2013, hospital payments would be adjusted based on performance under the VBP program.

By FY2014, the Secretary would be required to expand categories to include efficiency measures.

Physician Value-Based Purchasing:

Beginning with the 2011 reporting period, CMS would be required to make PQRI incentive payments available for two successive years to eligible professionals who voluntarily complete the following on a biennial (every two years) basis.

Quality Infrastructure:

Building on the provision set forth in MIPPA, the Chairman‘s Mark would provide additional resources to HHS to strengthen and improve quality measure development processes for purposes of improving quality, informing patients and purchasers and guiding payment under Federal health programs. AHRQ and the Centers for Medicare and Medicaid Services (CMS) would implement the provisions in this proposal.

National Strategy to Improve Health Care Quality:

 The Chairman‘s Mark would direct the Secretary to establish a national quality improvement strategy that includes priorities to improve the delivery of health care services, patient health outcomes, and population health through a transparent and collaborative process. In developing these priorities, the Secretary would consider how the priorities would: address health care needs of those with high-cost chronic diseases; improve strategies and best practices to improve patient safety and reduce medical errors, preventable hospital admissions and readmissions, and health care-associated infections; have the greatest potential for improving the health outcomes, efficiency and patient-centeredness of health care; reduce health care disparities across populations and geographic areas; address gaps in quality, efficiency and outcomes measures and data aggregation techniques; identify areas in the delivery of health care services that have the potential for rapid improvement in the quality and efficiency of patient care; improve payment policy under Federal health programs to emphasize quality and efficiency; enhance the use of health care data to improve quality, efficiency, transparency, and outcomes; and other areas as determined appropriate by the Secretary.

Quality Measure Development:

Measures developed under this section would be applicable to all age groups, where appropriate, and focus at minimum on the following areas: (1) patient outcomes and functional status; (2) coordination of care across episodes of care and care transitions; (3) meaningful use of health information technology; (4) safety, effectiveness, patient centeredness, appropriateness and timeliness of care; (5) efficiency of care; (6) equity of health services and health disparities; (7) patient experience and satisfaction; and (8) other areas deemed appropriate by the Secretary.

Accountable Care Organizations:

The Medicare program would allow groups of providers who voluntarily meet certain statutory criteria, including quality measurements, to be recognized as ACOs and be eligible to share in the cost-savings they achieve for the Medicare program. Beginning on Jan. 1, 2012, eligible ACOs would have the opportunity to qualify for an incentive bonus.

Eligible ACOs would be defined as groups of providers and suppliers who have an established mechanism for joint decision-making, such as for capital purchases. The following groups of providers and suppliers would be eligible for participation: practitioners in group practice arrangements; networks of practices; partnerships or joint-venture arrangements between hospitals and practitioners; hospitals employing practitioners; and such other groups of providers of services and suppliers as the Secretary determines appropriate. Practitioners would be defined as physicians, nurse practitioners, physician assistants, clinical nurse specialists, and other practitioners or suppliers as the Secretary determines appropriate.

To qualify as an ACO, an organization would have to meet at least the following criteria: (1) agree to become accountable for the overall care of their Medicare fee-for-service beneficiaries; (2) agree to a minimum three-year participation; (3) have a formal legal structure that would allow the organization to receive and distribute bonuses to participating providers; (4) include the primary care physicians for at least 5,000 Medicare fee-for-service beneficiaries; (5) provide CMS with information regarding primary care and specialist physicians participating in the ACO as the Secretary deems appropriate; (6) have arrangements in place with a core group of specialist physicians; (7) have in place a leadership and management structure, including with regard to clinical and administrative systems; (8) define processes to promote evidence-based medicine, report on quality and costs measure, and coordinate care; and (9) demonstrate to the Secretary that it meets patient-centeredness criteria determined by the Secretary, such as use of patient and caregiver assessments or the use of individualized care plans.

 CMS Innovation Center:

Section 646 of the MMA mandates that CMS conduct a five-year demonstration program to test ways to improve health outcomes while increasing efficiency. This demonstration, called the Medicare Health Care Quality demonstration, aims to improve patient safety, enhance quality, and reduce variation in medical practice that often in higher costs. One of the major goals of this demonstration is to see if Medicare can improve outcomes while simultaneously achieving cost savings. Improvements in care coordination are one strategy that CMS anticipates providers will attempt as they strive to improve quality but reduce costs. Two demonstration projects under this demonstration are scheduled to begin in 2009 with two others to begin soon thereafter.The Chairman‘s Mark would require the Secretary to create an Innovation Center within the Centers for Medicaid and Medicare Services (CMS). The Innovation Center will be a new office established within CMS that is authorized to test, evaluate, and expand different payment 91 structures and methodologies which aim to foster patient-centered care, improve quality, and slow the rate of Medicare cost growth. The Mark would also make permanent the authority granted to the Secretary under Section 646 of the MMA (section 1866C of the Social Security Act).

The Center would be required to conduct an evaluation of each model tested, including an analysis of the extent to which the model results in: (1) coordination of health care services across treatment settings; (2) reduction of preventable hospitalizations; (3) prevention of hospital readmissions; (4) reduction of emergency room visits; (5) improvement in quality and health outcomes; (6) improvement in the efficiency of care; (7) reduction in the cost of health care services covered under this title; and (8) achievement of beneficiary and family-caregiver satisfaction.

National Pilot Program on Payment Bundling:

The Secretary would be required to develop, test and evaluate alternative payment methodologies through a national, voluntary pilot program that is designed to provide incentives for providers to coordinate patient care across the continuum and to be jointly accountable for the entire episode of care starting in 2013. If evaluations find that the pilot program achieves goals of improving patient outcomes, reducing costs and improving efficiency, then the Secretary would be required to submit an implementation plan to Congress on making the pilot a permanent part of the Medicare program.

Reducing Avoidable Hospital Readmissions:

 CMS would calculate national and hospital-specific data on the readmission rates of Medicare participating subsection (d) hospitals and for hospitals paid under section 1814 (b)(3) for eight conditions that the Secretary selects based on spending and readmission rates. Starting in FY 2012, the Secretary would share these data with hospitals, and the data would be publicly reported on the Hospital Compare website. Starting in FY 2013, hospitals with readmission rates above a certain threshold would have payments for the original hospitalization reduced by 20 percent if a patient with a selected condition is re-hospitalized with a preventable readmission within seven days and by ten percent if a patient with a selected condition is re-hospitalized with a preventable readmission within 15 days.

Preventable readmissions would be defined as all readmissions that could have been reasonably prevented, as determined by the Secretary. Certain readmissions that would be excluded from the definition as follows: (1) readmissions associated with metastasic malignancies, trauma, and burns; (2) planned readmissions; (3) readmissions for patients with discharge status of ―left against medical advice; ‖ and (4) patients who are transferred to another short-term acute care hospital.

Medicare Commission:

The Chairman‘s Mark would establish an independent Medicare Commission (hereafter the Commission) that would develop and submit proposals to Congress aimed at extending the solvency of Medicare, slowing Medicare cost-growth, and improving the quality of care delivered to Medicare beneficiaries. The Commission would be composed of 15 members, who would be appointed by the President and confirmed by the Senate. The Senate Majority Leader, the Speaker of the House, the Senate Minority Leader, and the House Minority Leader would each present three recommendations for appointees to the President; however, these recommendations in no way would limit the President‘s ultimate responsibility to present Congress with qualified nominees. Qualifications for members of the Commission would be similar to the qualifications required for members of the Medicare Payment Advisory Commission (MedPAC). Members of the Commission would serve six-year, staggered terms and would continue to serve until replaced. MedPAC would continue to exist in its current form as an advisory body to Congress.

Patient-Centered Outcomes Research Act of 2009:

Patient-Centered Outcomes Research Institute (the “Institute”).  The Chairman‘s Mark would authorize the establishment of a private, non-profit corporation that would be known as the ―Patient-Centered Outcomes Research Institute. The purpose of the Institute would be to assist patients, clinicians, purchasers, and policy makers in making informed health decisions by advancing the quality and relevance of clinical evidence through research and evidence synthesis. The research would focus on the manner in which diseases, disorders, and other health conditions can effectively and appropriately be prevented, diagnosed, treated, monitored, and managed, and would consider variations in patient subpopulations. Research conducted would compare the clinical effectiveness, risk and benefits of two or more medical treatments, services or items. The Mark would define treatment, services and items as: health care interventions, protocols for treatment, care management and delivery, procedures, medical devices, diagnostics tools, pharmaceuticals (including drugs and biological), and any strategies or items used in the treatment, management, and diagnosis of, or prevention of illness or injury, in patients.

The Institute would also disseminate their research findings. The Institute would be subject to the provisions specified below and, to the extent consistent with the Chairman‘s Mark, to the District of Columbia Non-Profit Corporation Act.


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