OLYMPIA, Wash. – When judging the value of medical treatments it pays for, this state imposes a tough standard — the kind that if applied nationally might save tens of billions of dollars a year.

A panel of medical professionals compares the effectiveness and safety of new treatments and tests to standard alternatives, typically choosing the least costly if there’s no real difference. Coverage decisions are binding on 750,000 residents: state employees, people insured by Medicaid, the state-federal program for the poor, and those receiving workers’ compensation.

The program is unique in the United States and sometimes is cited by experts as a possible model for the federal government. Studies suggest that using this approach would help eliminate inappropriate and wasteful care. But critics view it as interfering with patient-physician decision-making and a dangerous step down the road of rationed care. And it appears highly unlikely to gain support in Washington, D.C., where health care politics play out differently.

The differences were in sharp relief earlier this year when President Barack Obama proposed spending $1.1 billion to compare treatments. Even though there was no decision to use cost as a factor, a firestorm erupted, as some conservatives and industry groups warned that rationing was on the way. The proposal passed only after Congress made clear that the initiative could not be used to dictate decisions on insurance coverage.

Some 3,000 miles away, Washington state’s program is moving forward. In three years, its 11-person, part-time panel has made 10 decisions, denying coverage for five services. It has turned thumbs down on coverage of virtual colonoscopy for colon cancer screening and knee arthroscopy for osteoarthritis, for example, while approving artificial disc replacement for spinal disc disease under limited conditions. State officials say the program is saving $21 million annually and protecting patients from unproven and in some cases unsafe procedures.

The decisions, which don’t apply to private health plans, have sometimes sparked strong criticism. Medtronic, the Minneapolis-based medical-device maker, was upset when the committee decided against covering implantable infusion pumps for non-cancer pain.

And some doctors also are uneasy about the program. In an interview, Dr. Patrick Halpin, treasurer of the state association of orthopedists, questioned “allowing a small handful of people to make decisions generally made in the greater medical community.”

But the legislature has stood by the program it helped create, and the state medical association also supports the panel’s work.

Congress, by contrast, sometimes meddles in the coverage decisions of Medicare, the federal health program for the elderly. Even though Medicare doesn’t have explicit authority to base coverage decisions on cost-effectiveness, that hasn’t stopped its congressional overseers, as well as industry and patient groups, from complaining that adverse decisions might discourage innovation and tie doctors’ hands.

The debate over virtual colonoscopy is a case in point. In this non-invasive procedure, a CT scan is used to screen for colon cancer. Advocates say it would entice more people to get their colons checked. Optical colonoscopy, the standard procedure, requires snaking a tube through the colon.

Last year, the Washington state panel decided to deny coverage of virtual colonoscopy. The majority of members found that the procedure works as well as a regular colonoscopy, but concluded it would cost the state $11 million more a year. The reason: It must be done more frequently and, if polyps are found, patients must be referred for a regular colonoscopy to remove the polyps. Members weren’t swayed by data showing a slight patient preference for the less invasive procedure.

In February, when the federal Center for Medicare and Medicaid Services proposed not to cover it for Medicare, the health program for the elderly, more than 40 members of Congress quickly pressed the agency to reverse itself. Rep. Danny Davis, a Democrat from Chicago, told the center that virtual colonoscopy coverage was needed to encourage more African Americans – who suffer a higher rate of colon cancer deaths – to undergo screening.

On May 12, CMS nevertheless decided not to cover virtual colonoscopy, concluding that there is inadequate evidence to support its use for patients with no symptoms and at average risk of colon cancer. It called the technology “promising” but said more studies with older patients are needed.

Medicare administrators appeared to bow to pressure last year, when they withdrew a proposed decision to sharply limit coverage of a screening test for heart disease — coronary CT angiography- after facing criticism from Congress, medical and patient groups. It concluded there wasn’t sufficient evidence of improved health outcomes.

The Washington state program faces less political pressure in part because it has strong political backing and its impact is limited to one state. “They’ve taken heat, but the stakes for a single state are a whole lot less than for national coverage decisions by Medicare,” said Dr. Richard Deyo, a professor of evidence-based family medicine at Oregon Health & Science University.

The technology assessment panel currently includes six physicians from different specialties, a nurse practitioner, a chiropractor and a naturopath; there are two vacancies. According to Leah Hole-Curry, who heads the program, state agency directors, and patient, physician and health industry groups suggest services for evaluation, based on red flags like questionable outcomes and unexplained variations in how frequently a service is used around the state.

The panel commissions lengthy evidence reports from the Oregon Health & Science University and Spectrum Research in Tacoma, Wash. These researchers examine published medical journal studies on each topic and rate the quality of evidence. This work anchors the panel’s deliberations, although interested groups and the general public can make comments to the panel and attend all its meetings. No patients or doctors testified on the virtual colonoscopy issue.

“It’s a tremendous responsibility because we’re saying whether people can have access to various technologies,” said committee member Louise Kaplan, a nurse practitioner and assistant professor at Washington State University in Vancouver.

Assessing cost-effectiveness is particularly tricky, Kaplan said, because there aren’t a lot of good studies on how much money a treatment saves in the long run. If children receive gastric bypass surgery to reduce obesity, for example, will it be cheaper to care for them 10 years later if they aren’t suffering from diabetes and heart disease?

Gov. Christine Gregoire, the state’s Democratic governor, proposed the program to help improve the affordability and quality of health care. Washington already had a similar program for drugs. The drug committee’s decisions aren’t binding, though they are often adopted by state agencies.

Perhaps the biggest controversy so far arose over the committee’s decision last year not to cover implantable infusion pumps for pain not related to cancer.

The committee found strong evidence that the pumps are unsafe, and weak evidence of significant pain relief. In an e-mail response to questions, Medtronic, which dominates the infusion pump market, emphasized the need “to identify the best outcome for patients and preserve physician choice in using their best medical judgment.”

Medtronic lobbied Washington lawmakers this year to change the program, including expanding the role of manufacturer and patient groups and providing an appeals process. But a Senate bill to revamp the program died in committee.

The panel’s latest decision, on May 8, was a tough one – whether to cover drug-coated cardiac stents as an alternative to less-expensive bare metal stents for keeping patients’ cardiac arteries open. After a grueling day of analyzing numerous studies and listening to testimony from doctors and one patient, the committee voted to continue coverage for bare metal stents and limit drug-coated stents to people with the highest risk of reblockage.

Large numbers of patients and physicians will be affected by this decision, as will stent makers, and it likely will draw criticism from those who favor wider use of drug-coated stents. There will be another public comment period, and the panel will decide whether to ratify its decision in August.

Spokane family physician Dr. Brian Budenholzer, chairman of the panel, said this was one of the toughest calls so far because drug-coated stents are a little better for some patients but cost a lot more. He said the panel struck a good balance, though he acknowledged that the decision “won’t be universally applauded.”

He predicted that the rest of the country will eventually follow Washington state’s model because the U.S. can’t afford to keep paying for everything new that comes along, whether it has value or not. “If the country isn’t ready to do this now,” he said, “they will be.”