Three local lawmakers have signed onto a letter urging members of Congress to include changes in the way Medicare dollars are paid to states as part of any health care reform bill approved this year.  Sen. Kathy Sheran, DFL-Mankato, Rep. Kathy Brynart, DFL-Mankato, and Rep. Terry Morrow, DFL-St. Peter, joined more than 50 other state legislators in signing the letter, which asks Minnesota’s congressional delegation to pass reform legislation that “achieve[s] the President’s goal of reducing health care costs while giving states an incentive to maintain their existing high-quality, low-cost care delivery systems.”

The text of the letter can be found below.  A copy of the letter will be delivered to President Obama, Sen. Al Franken, Sen. Amy Klobuchar, and the state’s eight US House members.

Letter Text

Dear President Obama and Honorable Members of Congress:

We, the undersigned, strongly support enacting health care reform legislation this year that includes significant reform of Medicare’s geographic payment inequities in order to achieve the President’s goal of reducing health care costs while giving states an incentive to maintain their existing high-quality, low-cost care delivery systems.

Minnesota’s health care system is ranked #1 in the country for quality (AHRQ) and is ranked #43 in Medicare per patient spending (Dartmouth Atlas Project). We spend 20 percent less per patient than the national average and 31 percent less than in the highest cost state. In 2006, Medicare saved $1 billion in Minnesota relative to national average spending and $1.52 billion relative to the highest cost state. Across-the-board cuts in Medicare provider rates without any mechanism to reward this high-quality, low-cost care will lead to greater cost-shifting, will stifle health care innovation, and could harm Minnesota’s patients if providers use higher volume to compensate for under-payments. Moreover, any extension of Medicare’s existing payment disparities to a public option would be detrimental to Minnesota’s health care system.

To achieve a payment system that rewards innovation, higher quality, and lower costs, we recommend eliminating Medicare’s geographic variation and instead, paying Medicare providers on the basis of high quality and low cost (both measured relative to national averages). At a minimum, states should be offered optional Medicare waivers and the flexibility necessary to implement payment reform that includes a critical mass of patients across multiple payers (Medicaid, Medicare, and private insurers).

Reforming the Medicare payment system to move away from existing geographic inequalities toward a system that emphasizes health care value would deliver significant financial savings to the federal government and the Medicare program. We support the efforts of the Minnesota congressional delegation to prioritize Medicare payment reform in the current federal debate and we hope you will work with them on this important issue as you negotiate the final legislation.

Sincerely,