Medicare Payment Policy

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tABLe 11–1 growth in the number of LtCHs has slowed under the moratorium type of LtCH 2003 2004 2005 2006 2007 2008 2009 2010 2011 Some Medicare-certified LTCHs may not yet have filed a cost report for 2011 when we undertook our analysis. In addition, LTCHs with very low Medicare patient volume may be exempt from filing cost reports. At the same time, POS data may overstate the total number of LTCHs 244 Long-term care hospital services: Assessing payment adequacy and updating payments Average annual change 2003– 2005 2005– 2010 2010– 2011 All 277 315 366 373 382 388 411 416 424 14.9% 2.6% 1.9% Urban 264 299 342 348 358 362 388 389 397 13.8 2.6 2.1 Rural 13 16 24 25 24 26 23 27 27 35.9 2.4 0.0 Nonprofit 57 67 78 76 76 77 79 82 82 17.0 1.0 0.0 For profit 202 229 265 274 283 291 313 314 323 14.5 3.5 2.9 Government 18 19 23 23 23 20 19 20 19 13.0 –2.8 –5.0 Note: LTCH (long-term care hospital). Source: MedPAC analysis of Medicare cost report data from CMS. because facilities that close may not be immediately removed from the file. The cost report data, therefore, provide a more conservative estimate of total capacity and supply but may not accurately reflect the most recent changes in supply. A previous Commission analysis tABLe 11–2 Medicare LtCH spending per FFs beneficiary continues to rise 2004 2005 2006 2007 2008 2009 2010 2011 Average annual change 2004– 2005 2005– 2010 Cases 121,955 134,003 130,164 129,202 130,869 131,446 134,683 139,715 9.9% 0.1% 3.7% Cases per 10,000 FFS beneficiaries 33.4 36.4 36.0 36.2 36.9 37.0 37.4 38.5 9.0 0.6 2.8 Users 108,814 119,282 115,598 114,299 115,328 115,834 118,322 122,838 9.6 –0.2 3.8 Spending (in billions) $3.7 $4.5 $4.5 $4.5 $4.6 $4.9 $5.2 $5.4 21.6 2.9 4.0 Spending per FFS beneficiary $101.3 $122.2 $124.5 $126.1 $129.8 $138.0 $144.4 $148.8 20.7 3.4 3.1 Payment per case $30,059 $33,658 $34,859 $34,769 $35,200 $37,465 $38,582 $38,664 12.0 2.8 0.2 Average length of stay (in days) 28.5 28.2 27.9 26.9 26.7 26.4 26.6 26.3 –1.1 –1.2 –1.0 Note: LTCH (long-term care hospital), FFS (fee-for-service). Source: MedPAC analysis of Medicare Provider Analysis and Review data from CMS. 2010– 2011
Chronically critically ill beneficiaries Researchers and clinicians have noted the growing prevalence of chronically critically ill (CCI) patients, those who have survived acute critical illness in the hospital but face organ system failure requiring prolonged institutional care (Carson et al. 2008, Macintyre 2012, Nelson et al. 2010, Zilberberg et al. 2012, Zilberberg et al. 2008). Patients typically have long acute care hospital (ACH) stays with heavy use of intensive care services followed by stays in long-term care hospitals (LTCHs), skilled nursing facilities (SNFs), and inpatient rehabilitation facilities and may transition several times between these different venues of care (Macintyre 2012, Unroe et al. 2010). 13 The CCI patient exhibits metabolic, endocrine, physiologic, and immunologic abnormalities that result in profound debilitation and often ongoing respiratory failure, abnormalities that have slowed or precluded recovery from a wide range of acute forms of medical, surgical, and neurologic critical illness (Nierman and Nelson 2002). Many require prolonged mechanical ventilation (PMV); as a result, many studies of the CCI population have used the need for PMV as a defining characteristic. Another way to define this patient population is by the extended use of intensive care services. Mortality rates in this population are very high, especially for patients needing PMV. A cohort study of 300 intensive care unit patients (mean age = 56 years) requiring mechanical ventilation after acute illness revealed inaccuracies in ownership status in the POS data, so we have opted to rely on cost report data to determine the distribution of facilities across ownership and location categories (Table 11-1). Volume of services: LtCH stays and cases rose in 2011 Beneficiaries’ use of services suggests that access is adequate. From 2010 to 2011, the number of beneficiaries who had LTCH stays increased by 3.8 percent. Controlling for the number of FFS beneficiaries, we found that the for at least 21 days found that almost half had died within three months (Carson et al. 2008). A multicenter study in 2002 of 1,419 patients admitted to 23 LTCHs offering weaning from PMV found that 52 percent died within 12 months of the LTCH admission (Scheinhorn et al. 2007). Kahn and colleagues reported that in 2006, 69 percent of Medicare beneficiaries transferred to LTCHs needing mechanical ventilation after treatment for critical illness in the ACH died within a year (Kahn et al. 2010). Dematte D’Amico and colleagues observed that LTCH patients with more than two organ system failures (one of which may be respiratory failure) had very poor prognoses, with survival rates of less than 10 percent (Dematte D’Amico et al. 2003). Relatively few CCI survivors return to their previous level of health and function, and most end up with significant physical and cognitive limitations (Carson et al. 1999, Cox et al. 2007, Nelson et al. 2004, Scheinhorn et al. 2007, Unroe et al. 2010). Some researchers and clinicians believe that gross misunderstanding of prognosis accounts for some of the growth in the number of CCI patients, especially those receiving PMV (Cox et al. 2009). Studies suggest that providers may fail to furnish families with key information needed to make decisions about prolonged life support (Cox et al. 2009, Nelson et al. 2010, Nelson et al. 2007). Participants in the Commission’s October 2010 expert panel on LTCH quality reported that ACHs routinely discharge CCI patients to LTCHs without having had end-of-life and advanced care planning discussions with patients or their surrogates. (continued next page) number of LTCH cases rose 2.8 percent between 2010 and 2011, suggesting that access to care increased during this period (Table 11-2). Compared with all Medicare beneficiaries, those admitted to LTCHs are disproportionately disabled (under age 65), over age 85, and diagnosed with end-stage renal disease. They are also more likely to be African American. The higher rate of LTCH use by African American beneficiaries may be due to a greater incidence of critical illness in this population (Mayr et al. 2010). At the same time, African American beneficiaries may be more likely Report to the Congress: Medicare Payment Policy | March 2013 245
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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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Physicians Association has publishe
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tABLe 6-3 Increasing number and cap
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Number of FFS dialysis beneficiarie
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FIguRe 6-3 Percent of dialysis bene
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and 2011, the proportion of adult h
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anticipated under the modernized pa
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endnotes 1 In this chapter, we use
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References ABIM Foundation. 2012. C
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C H A p t e R7 post-acute care prov
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encourages more 60-day episodes. Fu
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C H A p t e R8 skilled nursing faci
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skilled nursing facility services C
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adjust for differences in patients
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Description of beneficiaries who us
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snF prospective payment system and
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Number of SNFs FIguRe FIGURE 8-1 7-
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FIGURE FIguRe Percent 7-2 8-2 30 25
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and other SNF users were essentiall
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FIguRe FIGURE Program spending (in
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7-8 8-6 FIguRe 30 25 20 15 10 Medic
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(e.g., whether there is a requireme
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the Commission’s 2012 update reco
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tABLe 8-9 non-Medicare margins were
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found to be associated with one or
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Smith, V. K., K. Gifford, E. Ellis,
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R e C o M M e n D A t I o n s (The
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188 Home health care services: Asse
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tABLe 9-1 use and growth of home he
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FIGURE FIguRe Number of new agencie
Page 220 and 221: tABLe 9-2 of services. The review a
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Page 230 and 231: tABLe 9-11 provider characteristics
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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
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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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Page 257 and 258: increase for changes in the outlier
Page 259: References Centers for Medicare & M
Page 262 and 263: R e C o M M e n D A t I o n 11 The
Page 264 and 265: Quality of care—LTCHs only recent
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Page 268 and 269: short-stay outlier cases in long-te
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Page 274 and 275: Quality measures for long-term care
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Page 285 and 286: Hospice services C H A p t e R12
Page 287 and 288: Hospice services Chapter summary Th
Page 289 and 290: Background Medicare began offering
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Page 295 and 296: number peaking in 2009). With rapid
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Page 311: C H A p t e R13 the Medicare Advant
Page 314 and 315: 288 The Medicare Advantage program:
Page 317 and 318: The Medicare Advantage (MA) program
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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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