Medicare's top administrator said he might have a solution to North Dakota's concerns about reimbursement.

Kerry Weems, administrator of the Centers for Medicare and Medicaid, outlined a demonstration project that rewards quality. It will begin next year in 12 locations, which can be states or communities, he said.

"We do input-based pricing (now)," he said. "It says nothing about quality, only the intensity of resources used."

He explained the demonstration project during a panel discussion at the Bismarck Civic Center on Monday. Sens. Kent Conrad and Byron Dorgan and Rep. Earl Pomeroy, and administrators representing Altru Healthcare, Merit Care, home health care, emergency medical services, physicians and nursing homes spoke about reimbursement concerns, and the audience was mostly health-care professionals.

Health-care officials are concerned about reimbursement because it has decreased, and then a piece of legislation that placed North Dakota hospitals on the same wage index as Fargo lapsed in October, which further decreased Medicare funding for some facilities. The congressional delegation hopes to have the legislation reauthorized so the funding is restored.

But health-care officials are still concerned that Medicare reimbursements will not keep their facilities financially viable.

Weems posed a performance pay program that would pay a higher reimbursement rate for high-performing hospitals and nursing homes and a lower rate for poorer performing hospitals. States and communities can apply in February for the demonstration project. Locations will be announced in June, and physicians will be announced in the fall, Weems said.

"We need to teach ourselves to pay for quality," he said.

North Dakota hospital administrators also have a plan to change reimbursement. The proposal is for a Frontier State Strategy, which gives a higher wage index for rural states, those with 2 million people or less and a density of 25 people or less per square mile. States that meet this definition are North Dakota, South Dakota, Nebraska, Montana, Wyoming, Idaho, New Mexico and Alaska.

The other concerns addressed by panelists were qualified workers, reimbursement for emergency management workers and compliance issues.

The CEOs from Medcenter One and St. Alexius Medical Center attended but were not part of the panel discussion.

(Reach reporter Sara Kincaid at 250-8251 or sara.kincaid@;bismarcktribune.com.)