Medicare Payment Policy

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found to be associated with one or both quality measures: whether the patient uses a walker, shortness of breath when sitting, presence of a fever, whether the patient had a fall since admission or the prior assessment, and average number of times physicians’ orders were changed. One factor important in the prior models (whether the patient had do-not-resuscitate orders) is no longer reported in the assessment. The models explain a fair amount of the variation in rates across facilities, with C-statistics of 0.76 and 0.75. A C-statistic measures the probability that the prediction is better than chance, and a model with a value greater than 0.7 is considered reasonable. 16 The comorbidity index includes indicators for the following mental illnesses: Alzheimer’s disease, dementia, depression, psychotic disorders, and schizophrenia. 17 Separate models were developed for patients discharged to a nursing home, home health care, or the community or other (such as receiving hospice). The models included the same variables, but the importance of each factor (the coefficients) varied. 18 The HUD Section 232 program finances new or substantial reconstruction of nursing homes. The Section 232/222(f) program covers the refinancing or purchase of existing facilities. 182 Skilled nursing facility services: Assessing payment adequacy and updating payments 19 SNF cost reports were not available for fiscal year 2011. Providers were given more time to complete the reports because they include new schedules. We estimated margins using 2010 data and various assumptions about growth in costs and days. 20 To measure costs, we look at costs per day that were adjusted for differences in wages and case mix. To measure quality, we examined risk-adjusted rates of community discharge and potentially avoidable rehospitalizations. To be in the group of relatively efficient providers, a SNF had to be in the best third of one measure and not in the bottom third on any measure for three consecutive years (2006–2008). 21 We use the nursing component (as opposed to the payment weight of the case-mix group) to avoid distorting the measure of patient complexity by the amount of therapy furnished, which could be unrelated to patient care needs. 22 The differences for Extendicare are smaller than for other companies because almost half of its contracts with managed care companies are based on the FFS system.
References Alliance for Quality Nursing Home Care. 2012. Impact of payment reductions on nursing facilities payment cuts leading to nursing facility layoffs and cancellation of new jobs. Washington, DC: AQNHC. Carter, C., A. B. Garrett, and D. Wissoker. 2012. Reforming Medicare payments to skilled nursing facilities to cut incentives for unneeded care and avoiding high-cost patients. Health Affairs 31, no. 6 (June): 1303–1313. Centers for Medicare & Medicaid Services, Department of Health and Human Services. 2012. FY 2012 SNF PPS monitoring activities. http://cms.gov/Medicare/Medicare-fee-for-servicepayment/SNFPPS/spotlight.html. Centers for Medicare & Medicaid Services, Department of Health and Human Services. 2011. Medicare and Medicaid Research Review. 2011 statistical supplement. Baltimore, MD: CMS. http:// www.cms.gov/Research-Statistics-Data-and-Systems/Statistics- Trends-and-Reports/MedicareMedicaidStatSupp/2011.html. Centers for Medicare & Medicaid Services, Department of Health and Human Services. 2010. Medicare program; prospective payment system and consolidated billing for skilled nursing facilities for FY 2011; Minimum Data Set, version 3.0 for skilled nursing facilities and Medicaid nursing facilities. Final rule. Federal Register 75, no. 140 (July 22): 42886–42942. Centers for Medicare & Medicaid Services, Department of Health and Human Services. 2009. Medicare program; prospective payment system and consolidated billing for skilled nursing facilities for FY 2010; Minimum Data Set, version 3.0 for skilled nursing facilities and Medicaid nursing facilities. Proposed rule. Federal Register 74, no. 90 (May 12): 22208–22316. Department of Housing and Urban Development. 2012. Personal communication with Jennifer Buhlman and Kelly Haines, October 25. Ensign Group. 2012 Second quarter results. http://investor. ensigngroup.net/financials.cfm. Extendicare. 2012. Second quarter results. http://www. extendicare.com/investors/quarterly.aspx. Fish, R., D. Hittle, and S. Min. 2011. Risk-adjusted quality measures for skilled nursing facilities. A study conducted by staff from the Division of Health Care Policy and Research University of Colorado at Denver and Health Sciences Center for MedPAC. Washington, DC: MedPAC. Flavelle, C. 2012. Hospitals and nursing homes brace for Medicare cuts. Bloomberg News, October 4. Garrett, B., and D. Wissoker. 2008. Modeling alternative designs for a revised PPS for skilled nursing facilities. A study conducted by staff from the Urban Institute for the Medicare Payment Advisory Commission. Washington, DC: MedPAC. Government Accountability Office. 2012. Medicaid: States made multiple program changes and beneficiaries generally reported access comparable to private insurance. Report 13–55. Washington, DC: GAO. Jimmo v. Sebelius. 2011. No. 11–cv–17 (D.Vt.), filed January 18. Kindred Healthcare. 2012a. Annual report 2011. Louisville, KY: Kindred Healthcare. Kindred Healthcare. 2012b. Investor call, September 9. Kindred Healthcare. 2012c. Kindred Healthcare reports second quarter results. http://investors.kindredhealthcare.com. Kramer, A., R. Fish, and M. Min. 2013. Risk-adjusted quality measures for skilled nursing facilities in 2011. Report prepared for the Medicare Payment Advisory Commission. Washington, DC: MedPAC. Medicare Payment Advisory Commission. 2012. Report to the Congress: Medicare payment policy. Washington, DC: MedPAC. Medicare Payment Advisory Commission. 2008. Report to the Congress: Reforming the delivery system. Washington, DC: MedPAC. Office of Inspector General, Department of Health and Human Services. 2012. Inappropriate payments to skilled nursing facilities cost Medicare more than a billion dollars in 2009. Report no. OEI–02–09–00200. Washington, DC: OIG. Office of Inspector General, Department of Health and Human Services. 2011. Changes in skilled nursing facilities billing in fiscal year 2011. OEI–02–09–00204. Early alert memorandum report. Washington, DC: OIG. Office of the Actuary, Centers for Medicare & Medicaid Services, Department of Health and Human Services. 2012. Personal communication of author with John Klemm. Skilled Healthcare. 2012. Investor call second quarter results, August 9. Smith, V. K., K. Gifford, E. Ellis, et al. 2011. Moving ahead amid fiscal challenges: A look at Medicaid spending, coverage, and policy trends. Washington, DC: Kaiser Commission on Medicaid and the Uninsured. Report to the Congress: Medicare Payment Policy | March 2013 183
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RepoRt to the CongRess Medicare Pay
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RepoRt to tHe CongRess Medicare Pay
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with the structure of the payment s
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table of contents Acknowledgments .
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executive summary
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of services—and pressure on feder
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current Medicare payments are adequ
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outpatient dialysis services Outpat
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some facilities are willing to acce
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coverage for conventional treatment
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of care for these conditions should
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Context for Medicare payment policy
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4 Context for Medicare payment poli
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FIguRe FIGURE 1-2 1-2 12% Out of po
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the level of health care spending a
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1-4 FIguRe 1-4 140 120 100 80 60 Do
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FIguRe 1-6 1-6 Growth rate (in perc
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FIGURE FIguRe Share of GDP (in perc
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Share of GDP (in percent) FIGURE 1-
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FIGURE FIguRe 1-10 1-10 8% African
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FIguRe 1-12 1-11 1800 1600 1400 120
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Americans than for other racial and
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References Agency for Healthcare Re
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Medicare Payment Advisory Commissio
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Assessing payment adequacy and upda
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The goal of Medicare payment policy
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may go up when payment rates go dow
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hospitals and that hospitals shift
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individual payment systems but also
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Hospital inpatient and outpatient s
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Hospital inpatient and outpatient s
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covered the fully allocated costs o
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3-1 3-1 FIguRe 100 80 60 40 Number
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Visits or claims per 1,000 benefici
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3-4 3-4 FIguRe 2012 dollars (in bil
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of physicians employed directly by
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FIguRe FIGURE Annual percent change
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FIGURE FIguRe Margin (in percent) 3
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FIGURE FIguRe Margin (in percent) 3
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tABLe 3-5 performance of efficient
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Act, the EHR Incentive Program also
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as Medicaid expands, the new insura
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ates for separately paid drugs resu
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endnotes 1 From 2002 to 2011, 479 h
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References Agency for Healthcare Re
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C H A p t e R4 physician and other
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physician and other health professi
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from the SGR system in its October
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4-1 4-1 FIguRe 40 35 30 25 20 15 10
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tABLe 4-1 Most aged Medicare benefi
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tABLe 4-2 Medicare beneficiaries ha
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payment adjustments for health prof
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tABLe 4-3 Year physicians primary c
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provider’s characteristics, geogr
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tABLe 4-4 type of service Change in
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tABLe 4-5 type of imaging Change in
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the patient-centered medical home T
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FIguRe FIGURE Cumulative percent ch
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References ABIM Foundation. 2012. C
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Ambulatory surgical center services
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Ambulatory surgical center services
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Background An ambulatory surgical c
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Differences in types of patients tr
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Differences in types of patients tr
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number of services grew from 2006 t
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tABLe 5-7 rapidly than nonowning ph
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Creating a value-based purchasing p
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Revisiting the ambulatory surgical
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endnotes 1 Because CMS updates paym
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Medicare Payment Advisory Commissio
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R e C o M M e n D A t I o n 6 The C
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128 Outpatient dialysis services: A
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tABLe 6-1 Characteristics of FFs di
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Page 162 and 163: Number of FFS dialysis beneficiarie
Page 164 and 165: FIguRe 6-3 Percent of dialysis bene
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Page 168 and 169: anticipated under the modernized pa
Page 170 and 171: endnotes 1 In this chapter, we use
Page 172 and 173: References ABIM Foundation. 2012. C
Page 175: C H A p t e R7 post-acute care prov
Page 178 and 179: encourages more 60-day episodes. Fu
Page 181 and 182: C H A p t e R8 skilled nursing faci
Page 183 and 184: skilled nursing facility services C
Page 185: adjust for differences in patients
Page 188 and 189: Description of beneficiaries who us
Page 190 and 191: snF prospective payment system and
Page 192 and 193: Number of SNFs FIguRe FIGURE 8-1 7-
Page 194 and 195: FIGURE FIguRe Percent 7-2 8-2 30 25
Page 196 and 197: and other SNF users were essentiall
Page 198 and 199: FIguRe FIGURE Program spending (in
Page 200 and 201: 7-8 8-6 FIguRe 30 25 20 15 10 Medic
Page 202 and 203: (e.g., whether there is a requireme
Page 204 and 205: the Commission’s 2012 update reco
Page 206 and 207: tABLe 8-9 non-Medicare margins were
Page 210 and 211: Smith, V. K., K. Gifford, E. Ellis,
Page 212 and 213: R e C o M M e n D A t I o n s (The
Page 214 and 215: 188 Home health care services: Asse
Page 216 and 217: tABLe 9-1 use and growth of home he
Page 218 and 219: FIGURE FIguRe Number of new agencie
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Page 230 and 231: tABLe 9-11 provider characteristics
Page 232 and 233: tABLe 9-12 Medicare visits per full
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Page 239 and 240: C H A p t e R10 Inpatient rehabilit
Page 241 and 242: Inpatient rehabilitation facility s
Page 243 and 244: FIguRe FIGURE 10-1 9-1 Note: IRF (i
Page 245 and 246: Medicare IRF classification require
Page 247 and 248: tABLe 10-2 type of IRF 2004 2005 20
Page 249 and 250: tABLe 10-4 number of IRF beds decre
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Page 253 and 254: unobserved factors regarding patien
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References Centers for Medicare & M
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R e C o M M e n D A t I o n 11 The
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Quality of care—LTCHs only recent
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FIguRe FIGURE 11-1 10-1 Source: Med
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short-stay outlier cases in long-te
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tABLe 11-1 growth in the number of
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Chronically critically ill benefici
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Quality measures for long-term care
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tABLe 11-4 type of LtCH per case pa
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temporary legislative relief from s
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16 We observed growth over time in
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Durairaj, L., J. C. Torner, E. A. C
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Hospice services C H A p t e R12
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Hospice services Chapter summary Th
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Background Medicare began offering
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March 2009 Commission recommendatio
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March 2009 Commission recommendatio
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number peaking in 2009). With rapid
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tABLe 12-4 Hospice use has increase
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tABLe 12-5 Characteristic insurers
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three settings, respectively) (Tabl
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measures, it is likely that the vas
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tABLe 12-10 Category percentage poi
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• additional wage index changes,
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elieve the cost report data provide
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C H A p t e R13 the Medicare Advant
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288 The Medicare Advantage program:
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The Medicare Advantage (MA) program
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enchmark. If a plan’s bid is abov
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tABLe 13-3 projected payments excee
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We broke the fourth quartile into t
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tABLe 13-5 Distribution of enrollme
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tABLe 13-6 examples of measures inc
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tABLe 13-7 Between 2011 and 2012, l
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tABLe 13-9 admission-weighted ratio
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ecommended that payments be brought
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eport HEDIS measures based on admin
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C H A p t e R14 Medicare Advantage
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Medicare Advantage special needs pl
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integrating Medicaid benefits. We f
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tABLe 14-1 Distribution of snp enro
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previous Commission recommendations
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tABLe 14-4 Readmission rates by typ
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There has been recent movement in t
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of the quality measures that only S
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Separate appeals and grievances pro
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References Government Accountabilit
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status report on part D Chapter sum
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controlling growth in drug spending
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tABLe 15-2 and pharmacists who part
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Characteristics of Medicare benefic
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tABLe 15-6 Distribution of enrollme
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FIGURE FIguRe Percent of all Part D
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3). Most regions continue to have m
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tABLe 15-9 • Reinsurance—Medica
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tABLe 15-11 toward the OOP threshol
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tABLe 15-12 Cost-sharing amounts fo
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tABLe 15-14 enrollees—by about $9
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Drug price index equal to 1.0 at th
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Voluntary switchers Each year, Part
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endnotes 1 PPACA eliminates the cov
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References Boards of Trustees, Fede
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Commissioners’ voting on recommen
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Chapter 12: Hospice services The Co
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A p p e n D I X Moving forward from
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well as the cost of temporary repri
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payments rates be frozen at their c
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than primary care physicians (class
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achieving a total estimated 10-year
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would be costly, too, and they are
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payment accuracy. For example, such
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Final regulations on the ACO progra
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statemen nt of MedPAC’s position
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Cumulative percent change 70 7 60 6
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390 Moving forward from the sustain
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Note: The availability and scoring
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Acronyms AAgR average annual growth
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op outpatient opD hospital outpatie
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Commission members glenn M. Hackbar
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a state society of the National Med
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on the Advocate Physician Partners
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425 eye street, nW • suite 701
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Medicare Payment Policy

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