Medicare will begin to reward hospitals for the quality, rather than the quantity, of care they provide under new regulations released Friday.

The changes were called for in the healthcare reform law that was enacted last year. Health experts say the U.S. spends much more on healthcare than any other country without getting better outcomes in return, in large part because Medicare reimburses doctors and physicians for the number of tests and procedures they do, rather than their performance.

"This is one of those areas where improvements in quality and reductions in cost go hand in hand," said Medicare administrator Donald Berwick. "My feeling continues to be that the best way for us to arrive at sustainable costs for the healthcare system is precisely through the improvement of the quality of care."

Some 3,500 hospitals will be eligible for $850 million in performance incentives for fiscal 2013. Over time, Medicare reimbursements would be increasingly linked to quality improvements and patient satisfaction.

The healthcare reform law has had a "devastating" impact on insurance agents and brokers, according to a new survey from the National Association of Insurance and Financial Advisers. The group said 75 percent of its members have seen a drop in their commissions since the new law capped the amount of money that insurers can spend on administrative expenses and profits.

Agents and brokers have been lobbying for a bill that would exempt their commissions from the definition of insurers' administrative expenses, fearing that the new limits will lead insurance companies to cut commissions and direct that money elsewhere. The National Association of Insurance Commissioners is studying the issue and has voiced strong support for brokers. Many consumer advocates argue that commissions were dropping before healthcare reform took effect.

According to the data the brokers group released Friday, more than half of the brokers surveyed have seen their commissions drop by at least 25 percent. In addition to the 75 percent who have already seen a cut, 13 percent have been told to expect cuts in the near future, according to the survey.

Medicare chief argues GOP plan is "wrong way" to reduce Medicare costs.

Potential GOP presidential candidate Rick Santorum presses Indiana Gov. Mitch Daniels, another 2012 GOP contender, to sign a bill cutting off funding for Planned Parenthood, Talking Points Memo reports.

The leader of the top medical device trade organization writes in a Health Affairs blog post that accountable care organizations might be a barrier to innovation.

Florida lawmakers are still wrestling with a proposal to shift the state's Medicaid program to a managed-care structure, reports the Palm Beach Post.

Politico reports that Rep. Paul Ryan (R-Wis.) is facing increasingly staunch opposition from many of his constituents over his plan to convert Medicare into a defined contribution program.

And at National Journal, healthcare insiders share their views on whether the Ryan plan will help Democrats reclaim a political advantage on healthcare.

The agency that governs Medicare is considering adjusting its payment rates to take back nearly $4 billion in unexpected payments to nursing homes.

The Centers for Medicare and Medicaid Services (CMS) said in a proposed regulation Thursday that payments under a new classification system have "differed significantly" from the agency's earlier estimates. As a result, CMS is considering an 11 percent cut in next year's payment rates to make up for the extra spending this year.

"The CMS proposed rule is extremely complicated, but one thing is already clear — it will have a dramatic impact on the lives of nursing home residents and patients," American Health Care Association President and CEO Mark Parkinson said in a statement. "AHCA will spend the coming days and weeks examining all of the elements of this rule to ensure that our members' daily experiences are used to help guide CMS in creating the best possible environment for residents."

The federal government said Thursday that it wants food manufacturers to meet certain nutritional standards for products marketed to children. A group of agencies said food marketed to kids should have limited amounts of fat, salt and sugar.

Republicans on the Ways and Means Committee wrote to IRS Commissioner Douglas Shulman on Thursday demanding to know how much money the Internal Revenue Service is getting from Democrats' healthcare reform law.

The law created a $1 billion Health Insurance Reform Implementation Fund, and the letter alleges that the IRS has already received "tens of millions of dollars from this fund to implement parts of the health care overhaul." The funding is believed to be on top of the $473.3 million the IRS would get in healthcare related funding under President Obama's 2012 budget.

Republicans have targeted the IRS as part of their defunding strategy and want to prevent the agency from penalizing individuals and businesses that don't comply with the law's insurance coverage requirements.

The letter is signed by Ways and Means Chairman Dave Camp (R-Mich.) and oversight subpanel chairman Charles Boustay (R-La.). It gives the IRS until May 12 to reply.

Abortion-rights groups are facing tough choices about where to challenge new restrictions on abortion and other reproductive health services in the wake of a sharp increase in both state and federal legislation on the issue. Indiana Gov. Mitch Daniels, a Republican, is expected to sign a bill that aims to cut off Planned Parenthood’s funding in the state, and legislatures nationwide are considering a range of other proposals to limit access to abortion.

NARAL Pro-Choice America Policy Director Donna Crane told reporters Thursday that while her organization doesn’t litigate, others that do have legal arms are finding themselves “hard-pressed to pick the challenges that will have the best effect for women.” In addition to defunding efforts, she said, bills have been filed in 15 states to ban abortion after 20 weeks of pregnancy. Idaho, Kansas and Oklahoma have passed 20-week laws. Bills have been filed in 15 states to define a fetus as a person, according to NARAL, and 11 states have passed laws that prohibit insurers from covering abortions. 

The military's healthcare program will start covering dependents up to the age of 26 starting Sunday under new Department of Defense regulations.

The new regulations put TRICARE beneficiaries on equal footing with the rest of the population after the healthcare reform law required insurance plans to cover young adults under family plans. Until now, TRICARE only covered dependents up to age 21, or 23 for full-time college students whose parents provide more than half the student's financial support.

According to the DoD's interim rule, the monthly premium for young adults enrolled in TRICARE Standard and Extra programs will be $186; the monthly TRICARE Prime premium will be $213.