Medicare Payment Policy

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tABLe 13–10 plans report a single rate for HeDIs ® measures that vary across the states with plan enrollment Location of state Rate for glaucoma screening measure There are studies showing differences in utilization of services among MA enrollees compared with FFS beneficiaries, which in some cases may be indicative of better access to appropriate care and better integration of care. One study showed that diabetics enrolled in a chronic care SNP had lower rates of emergency department utilization, more primary care visits, and lower hospital admission and readmission rates than the comparison group in FFS, though the differences narrowed after risk adjustment (Cohen et al. 2012). Another study also showed lower rates of hospital admissions and emergency use across MA HMO plans over the period 2003 to 2009 and differences in the frequency of certain procedures (e.g., MA HMOs had a greater frequency of coronary artery bypass graft surgeries but fewer hip and knee replacements than FFS beneficiaries) (Landon et al. 2012). Another study comparing hospital readmissions in FFS versus MA examined 2006 data for five states. The authors found that, after risk adjustment and controlling for self-selection in MA, enrollees in MA had a substantially higher likelihood of readmission (Friedman et al. 2012). Concerns with the star ratings CMS has addressed many of the Commission’s concerns about the methodology for determining star ratings. Greater weight is being given to clinical process measures and patient experience measures than contract performance measures. Our March 2012 report discusses our concerns about the reporting unit to which the star ratings apply (Medicare Payment Advisory Commission 2012b). We noted that the geographic area to which a single star rating applies may be extensive and may 306 The Medicare Advantage program: Status report star rating for individual measure based on state rate Upper Midwest 60% 2 stars Pacific Coast 64 3 stars Mid-Atlantic 70 4 stars Note: HEDIS ® (Healthcare Effectiveness Data and Information Set ® ). The denominators for these measures include over 2,000 enrollees in each of the three state locations shown. Source: MedPAC analysis of CMS HEDIS ® person-level data. encompass many kinds of health care markets and provider networks. The amalgamation of diverse areas affects both purposes of the star rating system—to provide beneficiaries with information about the quality of a health plan they are considering joining and to determine which plans are eligible for bonuses because they provide highquality health care. In addition to the number of plans operating in large, diverse states, there are at least 17 contracts serving noncontiguous states under one contract with substantial enrollment in the different states (including one regional contract covering more than one region). An example from one plan illustrates how different a star rating might be for each area if star ratings were determined at the appropriate geographic level. We compare person-level HEDIS data in the case of a contract that includes various states (13 of which have substantial plan enrollment at over 1,000 members in the state). The plan received a rating of 3 stars for the HEDIS glaucoma screening measure across its entire contract, but individual states would have received different ratings had the reporting unit been at the state level, as we illustrate with an example of three state locations (Table 13-10). In last year’s report, we suggested that CMS more closely examine the configuration of some contracts to determine whether the reporting units should be modified, given that even within a state there can be large geographic differences that affect the quality of care. We noted that in many cases—though not in the example provided—there could be a problem of small numbers of enrollees and therefore small sample sizes, a methodological problem that can be overcome in different ways, such as by pooling data for multiple years. Given the potential differences in quality measures, and given the known differences in MA benchmarks based on star ratings, including differences by area where certain counties are doublebonus counties, the cost burden associated with additional reporting or data manipulation is likely outweighed by the benefit to beneficiaries and, potentially, to program costs, by ensuring that reporting is done at the appropriate geographic level. Conclusion The Commission has stressed the concept of imposing fiscal pressure on providers to improve efficiency and reduce Medicare program costs. For MA, the Commission
ecommended that payments be brought down from previous high levels and be set so that the payment system is neutral and does not favor either MA or the traditional FFS program. Recent legislation has taken the program closer to this point of equity between MA and FFS. As a result, we are seeing evidence of improved efficiency in MA as plan bids have come down in relation to FFS while enrollment in MA continues to grow. The improved efficiency of MA plans enables them to continue to increase MA enrollment by offering packages that beneficiaries find attractive. The Commission has also recommended that pay-forperformance programs be instituted in Medicare to promote quality, with the expected added benefit of improving efficiency by reducing unnecessary program costs. The Congress instituted such a quality bonus program for MA. The initial results of the program indicate that more plans are achieving ratings that would qualify them for bonuses as called for in the statute. Plans are paying closer attention to the quality measures, with improved documentation and medical record validation as contributing factors in improved performance for many plans. The Commission supports the concept of the quality bonus program as called for in the statute. Such a payfor-performance system, combined with continuing fiscal pressure, will help ensure that a strong MA program will do its part in the urgent need to ensure the continued financial viability of the Medicare program. However, CMS has implemented the quality bonus program in a flawed manner at very high program costs not contemplated in the statute, using demonstration authority to pay bonuses to plans with low ratings and increasing bonus amounts for other plans above the level authorized in the statute. ■ Report to the Congress: Medicare Payment Policy | March 2013 307
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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
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tABLe 9-2 of services. The review a
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tABLe 9-4 Community-admitted home h
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tABLe 9-5 type of county Claims dat
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tABLe 9-6 state County are collecte
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tABLe 9-8 Medicare margins for free
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tABLe 9-11 provider characteristics
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tABLe 9-12 Medicare visits per full
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strengthening incentives for effect
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endnotes 1 The exceptions pertain t
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C H A p t e R10 Inpatient rehabilit
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Inpatient rehabilitation facility s
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FIguRe FIGURE 10-1 9-1 Note: IRF (i
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Medicare IRF classification require
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tABLe 10-2 type of IRF 2004 2005 20
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tABLe 10-4 number of IRF beds decre
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weight for compliant cases was 1.39
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unobserved factors regarding patien
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freestanding IRFs were about $4,340
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increase for changes in the outlier
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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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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 293 and 294: March 2009 Commission recommendatio
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
Page 319 and 320: enchmark. If a plan’s bid is abov
Page 321 and 322: tABLe 13-3 projected payments excee
Page 323 and 324: We broke the fourth quartile into t
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Page 337 and 338: C H A p t e R14 Medicare Advantage
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Page 341: integrating Medicaid benefits. We f
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Page 352 and 353: of the quality measures that only S
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Page 366 and 367: Characteristics of Medicare benefic
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Page 370 and 371: FIGURE FIguRe Percent of all Part D
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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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