Medicare Payment Policy

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Medicare Payment Advisory Commission. 2012b. Report to the Congress: Medicare payment policy. Washington, DC: MedPAC. Medicare Payment Advisory Commission. 2011a. Report to the Congress: Medicare and the health care delivery system. Washington, DC: MedPAC. Medicare Payment Advisory Commission. 2011b. Report to the Congress: Regional variation in Medicare service use. Washington, DC: MedPAC. Moriya, A. S., W. B. Vogt, and M. Gaynor. 2010. Hospital prices and market structure in the hospital and insurance industries. Health Economics, Policy and Law 5, no. 4 (October): 459–479. National Governors Association and National Association of State Budget Officers. 2012. The fiscal survey of states. Washington, DC: NGA and NASBO. Newhouse, J. P., and the Insurance Experiment Group. 1993. Free for all? Lessons from the RAND Health Experiment. Cambridge, MA: Harvard University Press. Newhouse, J. P. 1992. Medical care costs: How much welfare loss? Journal of Economic Perspectives 6, no. 3 (Summer): 3–21. Organisation for Economic Co-operation and Development. 2012. Health data 2012. Paris: OECD. Peden, E. A., and M. S. Freeland. 1995. A historical analysis of medical spending growth, 1960–1993. Health Affairs 14, no. 2: 235–247. Potetz, L., J. Cubanski, and T. Neuman. 2011. Medicare spending and financing: A primer. Menlo Park, CA: Kaiser Family Foundation. Redberg, R. 2011. Squandering Medicare’s money. The New York Times, May 25. Robert Wood Johnson Foundation. 2012. F as in fat: How obesity threatens America’s future. Washington, DC. Robert Wood Johnson Foundation. Roehrig, C., A. Turner, P. Hughes-Cromwick, et al. 2012. When the cost curve bent—Pre-recession moderation in health care spending. New England Journal of Medicine 367, no. 7 (August 16): 590–593. 26 Context for Medicare payment policy Schoen, C., J. L. Nicholson and S. D. Rustgi. 2009. Paying the price: How health insurance premiums are eating up middle-class incomes. New York: The Commonwealth Fund. Shatto, J. D., and M. K. Clemens. 2012. Projected Medicare expenditures under illustrative scenarios with alternative payment updates to Medicare providers. Memorandum from the Centers for Medicare & Medicaid Services, Office of the Actuary. May 18. Smith, S. D., J. P. Newhouse, and M. S. Freeland. 2009. Income, insurance, and technology: Why does health spending outpace economic growth? Health Affairs 28, no. 5 (September–October): 1276–1284. Smith, V. K., K. Gifford, E. Ellis, et al. 2011. Moving ahead amid fiscal challenges: A look at Medicaid spending, coverage and policy trends results from a 50-State Medicaid budget survey for state fiscal years 2011 and 2012. Washington, DC: Health Management Associates and Kaiser Commission on Medicaid and the Uninsured (Kaiser Family Foundation). Vestal, C. 2012. For some states, Medicaid expansion may be a tough fiscal call. Washington, DC: Pew Center on the States. Vogt, W., and R. Town. 2006. How has hospital consolidation affected the price and quality of health care? Issue brief no. 9. Princeton, NJ: Robert Wood Johnson Foundation. Welch, Gil. 2012. Testing what we think we know. The New York Times, August 19. White, C. 2007. Health care spending growth: How different is the United States from the rest of the OECD? Health Affairs 26, no. 1 (January–February): 154–161. Zhang, Y., K. Baicker, and J. P. Newhouse. 2010. Geographic variation in Medicare drug spending. New England Journal of Medicine 363, no. 5 (July 29): 405–409. Zuckerman, S., T. Waidmann, R. Berenson, et al. 2010. Clarifying sources of geographic differences in Medicare spending. New England Journal of Medicine 363, no. 1 (July 1): 54–62.
C H A p t e R2 Assessing payment adequacy and updating payments in fee-for-service Medicare
Page 1 and 2: RepoRt to the CongRess Medicare Pay
Page 3: RepoRt to tHe CongRess Medicare Pay
Page 6 and 7: with the structure of the payment s
Page 9 and 10: table of contents Acknowledgments .
Page 11: executive summary
Page 14 and 15: of services—and pressure on feder
Page 16 and 17: current Medicare payments are adequ
Page 18 and 19: outpatient dialysis services Outpat
Page 20 and 21: some facilities are willing to acce
Page 22 and 23: coverage for conventional treatment
Page 24 and 25: of care for these conditions should
Page 27: Context for Medicare payment policy
Page 30 and 31: 4 Context for Medicare payment poli
Page 32 and 33: FIguRe FIGURE 1-2 1-2 12% Out of po
Page 34 and 35: the level of health care spending a
Page 36 and 37: 1-4 FIguRe 1-4 140 120 100 80 60 Do
Page 38 and 39: FIguRe 1-6 1-6 Growth rate (in perc
Page 40 and 41: FIGURE FIguRe Share of GDP (in perc
Page 42 and 43: Share of GDP (in percent) FIGURE 1-
Page 44 and 45: FIGURE FIguRe 1-10 1-10 8% African
Page 46 and 47: FIguRe 1-12 1-11 1800 1600 1400 120
Page 48 and 49: Americans than for other racial and
Page 50 and 51: References Agency for Healthcare Re
Page 55 and 56: Assessing payment adequacy and upda
Page 57 and 58: The goal of Medicare payment policy
Page 59 and 60: may go up when payment rates go dow
Page 61 and 62: hospitals and that hospitals shift
Page 63 and 64: individual payment systems but also
Page 65 and 66: Hospital inpatient and outpatient s
Page 67 and 68: Hospital inpatient and outpatient s
Page 69: covered the fully allocated costs o
Page 72 and 73: 3-1 3-1 FIguRe 100 80 60 40 Number
Page 74 and 75: Visits or claims per 1,000 benefici
Page 76 and 77: 3-4 3-4 FIguRe 2012 dollars (in bil
Page 78 and 79: of physicians employed directly by
Page 80 and 81: FIguRe FIGURE Annual percent change
Page 82 and 83: FIGURE FIguRe Margin (in percent) 3
Page 84 and 85: FIGURE FIguRe Margin (in percent) 3
Page 86 and 87: tABLe 3-5 performance of efficient
Page 88 and 89: Act, the EHR Incentive Program also
Page 90 and 91: as Medicaid expands, the new insura
Page 92 and 93: ates for separately paid drugs resu
Page 94 and 95: endnotes 1 From 2002 to 2011, 479 h
Page 96 and 97: References Agency for Healthcare Re
Page 99 and 100: C H A p t e R4 physician and other
Page 101 and 102: 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
Page 282 and 283:
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
Page 398 and 399:
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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