DES MOINES - Iowa's Democratic members of the U.S. House are trumpeting a breakthrough on Medicare reimbursement that should result in higher payments to doctors, hospital and other health care providers in the state.

The compromise calls for Medicare to begin paying health care providers on a quality-based system beginning in 2012, after a two-year study by the Institute of Medicine. That's expected to raise Medicare reimbursement rates for Iowa health care providers who rank 49th among the states.

The agreement will "help ensure patients are diagnosed correctly, are not forced to undergo unnecessary procedures, and have access to quality health care providers," 2nd District Rep. Dave Loebsack of Mount Vernon, said Friday.

The compromise will save billions of tax dollars and "reduce costly, unneeded procedures that don't improve patient outcomes," said 1st District Rep. Bruce Braley of Waterloo. It also will reward doctors in states like Iowa "who provide the most efficient and effective health care."

The two-year transition was a key in brokering a compromise with House Democratic leaders, according to a spokesman for Braley. Many urban members representing areas where health care providers receive higher reimbursement have opposed the change.

It increases the prospects of bringing real reform to the health care system, 3rd District Rep. Leonard Boswell of Des Moines, added.

The current Medicare reimbursement system bases payments to doctors and hospitals on the amount of procedures completed and the number of patients seen, the congressmen said. That creates a financial incentive to order more procedures, which, they said, does not result in better outcomes for patients.

Iowa health care providers consistently have delivered low-cost, high-quality care. However, providers and state officials have argued Iowa's low reimbursement rate makes it difficult to attract and retain health-care providers. That compromises patient care, Loebsack said.

"If we cannot get the providers we need to Iowa, especially given our demographics - the aging population that Medicare affects, because of low reimbursement rates, that will forever disadvantage Iowa and our patients, our citizens," he said.

He hopes the compromise is a part of the final House health care reform bill and that the Senate Finance Committee takes notice of the agreement.

Sen. Chuck Grassley, the ranking Republican on the committee, has been arguing for quality-based reimbursement system that would reward the value and efficiency of Iowa health care providers.