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Senators react to health reform bill

Sen. Al Franken embraced Thursday the health care reform bill headed to the Senate floor, while Sen. Amy Klobuchar hailed provisions she won in a more reserved opinion.

Senate Majority Leader Harry Reid, D-Nev., after weeks of closed-door negotiations released late Wednesday the vehicle for health care reform in the Senate, the Patient Protection and Affordable Care Act.

"This bill successfully addresses some of the very worst flaws in our health care system," Franken, DFL-Minn., said Thursday in a statement. "It ends discrimination by insurance companies, reduces the national deficit and protects Minnesota interests."

The bill is predicted to cost $849 billion over 10 years but is also expected to cut federal budget deficits by $127 billion over 10 years.

"As we move forward, I will be working not just to protect the good foundation laid out (Wednesday night), I will be working to make any improvements necessary to ensure that Minnesota families can afford and receive secure coverage and quality care," Franken said.

Klobuchar, DFL-Minn., said Reid's merged bill includes her proposal to reform Medicare and reward the value of care, instead of the volume of services. It represents a transformation of the current Medicare payment system.

Klobuchar said she would advocate for a cost-efficient health care bill as it approaches the Senate floor.

"I'm encouraged to see that the Senate bill reduces the federal deficit by $127 billion and that it includes my value index legislation to control costs and get more from our health care dollars," said Klobuchar. "I will continue to work to improve the bill so that states like Minnesota, which provide greater access to high quality, efficient care, are rewarded for their efforts."

The bill includes a government-run insurance plan in competition with private insurers, but individual states could opt out of offering it. Also, the public plan would negotiate with providers, not dictate fees for services.

It would extend health insurance to 31 million Americans who do not now have health insurance, and would mandate that Americans have insurance. A half-percentage point increase in the Medicare payroll tax for people who make more than $200,000 would help pay for the program.

Klobuchar's proposal establishes a Medicare "value index" method for determining payment to physicians. The significant change to the Medicare payment system will be administered by the secretary of Health and Human Services.

The secretary will work to establish uniform definitions for quality that will become the basis for the index, she said. The proposal is budget neutral and takes into account justifiable differences in Medicare spending. It is not contingent on a study, or subject to the disapproval by Congress, as other proposals have provided.

"Mayo Clinic has consistently supported payment reforms in Medicare to reward value rather than volume," Dr. Denis Cortese, Mayo Clinic president and CEO, said in Klobuchar's statement.

"We are enthused that the Senate bill unveiled (Wednesday) includes a value payment modifier for Medicare physician payments," he said. "We are confident that this type of payment reform is a key to better quality for patients as well as lowering the cost of health care."

Currently, Medicare does not take into account the value of care provided by physicians when determining their payments for providers, Klobuchar said. Value-based payments with help reduce regional differences in Medicare spending across the nation and help move to a coordinated, integrated delivery system. Studies have shown that more integrated care could save taxpayers an additional $100 billion a year.

"This is a huge win for Minnesota," Franken said of the provision. "Our providers shouldn't be punished for their effectiveness and with the inclusion of this measure, we know they won't be."

The bill also incorporates provisions from Franken's Fairness in Health Insurance Act that require health insurance companies to spend a set portion of their insurance premium dollars on actual health care services, as opposed to marketing campaigns, CEO salaries and administrative costs.

That portion of the dollar, known in the industry as "medical loss ratio," has been set at 80 cents for group health plans and 75 cents for individual plans. Franken said he was encouraged by the inclusion, though he said he will press to raise the ratio to 90 cents, the level set out in his own legislation.

"Minnesota families need to know that when they send their health insurance premium dollars to their insurance companies, that money is being spent on making and keeping them healthy - not on bloated profits, bonuses, or advertising," said Franken. "This was a common-sense solution I was proud to fight for and I'm thrilled to see it included in our Senate bill. It's going to go a long way toward improving care and holding insurance companies accountable."

The bill also includes a Franken provision to reduce paperwork and save money by establishing a uniform standard for insurance claims. Right now, administrative transactions between health care providers, payers, intermediaries and vendors are not standardized, resulting in an unnecessary and costly burden on providers and patients.

"Doctors and nurses should spend their time and resources dealing with patients, not paperwork," said Franken. "Minnesota has been a leader in simplifying administrative processes and that's why I fought to see our success included in the bill. If the rest of the nation follows our example, we can save this country billions."

Behind Klobuchar's leadership, both she and Franken also fought successfully ton convince Senate leadership to cut in half the $38 billion tax on medical device companies proposed in the Senate Finance Committee's bill.

"The medical device industry creates jobs, fosters innovation, and saves lives," said Franken. "It was important to make sure they weren't unfairly burdened by national health care reform and I believe we've come to a good compromise."