Senate Finance Committee Chair Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa) on Wednesday released a draft bill that would link Medicare reimbursement levels for inpatient hospital care to the quality of care, rather than the number of services provided, CQ HealthBeat reports. Under the legislation, the new policy would begin in fiscal year 2012 and take full effect in FY 2016. Medicare reimbursement levels would increase from 1% to 2% during that time. The legislation would base quality standards on a list of measures established by several medical organizations, such as the National Quality Forum (Carey, CQ HealthBeat, 11/19). According to CongressDaily, the lawmakers likely will seek to attach the bill to larger health care reform or Medicare legislation (Edney, CongressDaily, 11/20).

In a news release, Baucus and Grassley said that the bill "would re-focus the Medicare program on quality care, which will result in improved patient care and could lower costs throughout the entire health care system" (CQ HealthBeat, 11/19). Grassley said, "Medicare's payment system is set up to reward volume rather than quality," adding, "The value-based purchasing initiative we've been pursuing would reverse those incentives in order to improve quality and reduce costs" (CongressDaily, 11/20).

The bill "includes all the right pieces of the puzzle, but as it evolves, it needs to be more specific," Chip Kahn, president of the Federation of American Hospitals, said, adding, "We really need to have everyone understand their roles" (CQ HealthBeat, 11/19). He said, "If the purpose of this is improvement, then you should have the payment connected to the areas that have improvements" (CongressDaily, 11/20).