Medicare Payment Policy

7-8
8–6
FIguRe
30
25
20
15
10
Medicare margin (in percent) FIGURE
5
0
18.5%
All
25th percentiles of Medicare margins), we found cost and
payment differences that underscore the need to revise
the PPS and more closely align payments with costs.
High-margin SNFs had lower daily costs (by 30 percent,
after adjusting for differences in wages and case mix)
and higher payments (by 10 percent) associated with
the high-therapy case-mix groups. Differences in patient
characteristics (shares of beneficiaries who are dual
eligible, minority, or very old) did not explain the cost
differences across facilities. Facilities with high margins
had identical case-mix indexes—as measured by the
relative weights associated with the nursing component
of the case-mix groups. 21 payments Source: to hospital-based facilities by an estimated 27
percent.
Level and variation in snF Medicare margins
indicate reforms to the pps are needed
The persistently
Notes
high
about
Medicare
this
margins
graph:
and the wide
variation • by Data mix of is patients in the datasheet. indicate that Make the PPS updates needs to in the datasheet.
be revised • so WATCH that payments FOR GLITCHY match patient RESETS characteristics, WHEN YOU UPDATE DATA!!!!
not the services furnished to them. Last year we found onequarter
of • SNFs The column had Medicare totals margins were added of 26.9 percent manually. or
higher in • 2010, I had while to manually one-quarter draw of SNFs tick had marks margins and of axis lines because they kept resetting when I changed any data.
9 percent or lower (Figure 8-6). Facilities with the highest
• I can’t delete the legend, so I’ll just have to crop it out in InDesign.
SNF margins had high shares of intensive rehabilitation
Even after CMS expanded the
therapy and • Use low direct shares of selection medically tool complex to select days items and for modification. number of medically Otherwise complex if you case-mix use the groups black and selection shifted tool, they
dual-eligible default days. when The disparity you change between the for-profit data. and payments away from therapy care, the PPS continues to
nonprofit • facilities Use paragraph is considerable styles and (and reflects object differences styles) to format. result in higher Medicare margins for facilities furnishing
in patient mix, service provision, and costs.
intensive therapy and treating few medically complex
• Data was from: R:\Groups\MGA\data book
patients
2007\data
(Carter et
book
al. 2012).
2007
A PPS
chp1
design based on
Comparing freestanding facilities with the highest and patient characteristics (such as the one recommended by
lowest Medicare margins (those in the bottom and top the Commission) would redistribute Medicare payments to
174 Skilled nursing facility services: Assessing payment adequacy and updating payments
Freestanding snF Medicare margins are highly variable, 2010
Note: SNF (skilled nursing facility). High share is defined as facilities in the top 25th percentile of shares; low share is defined as facilities in the bottom 25th percentile.
Source: MedPAC analysis of 2010 freestanding SNF Medicare cost reports.
Note: Note and Source are in InDesign.
9.0%
25th
percentile
26.9%
75th
percentile
21.6%
Intensive
therapy
(high share)
10.3%
Intensive
therapy
(low share)
15.5%
Medically
complex
(high share)
Freestanding Medicare margins....
18.4%
Medically
complex
(low share)
20.7%
For profit
9.5%
Nonprofit