Medicare Payment Policy

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3-1 3–1 FIguRe 100 80 60 40 Number of hospitals FIGURE 20 0 2000 2001 More hospitals opened than closed in the last 10 years Note: “Hospital” refers to general short-term acute care hospitals. MedPAC’s reported number of open and closed hospitals can change from year to year based on hospitals that enter Medicare as an acute care facility and later convert to a more specialized type of facility, such as a long-term care hospital or critical access hospital. Source: MedPAC analysis of Medicare provider of service file, inpatient prospective payment system final rule impact file, and hospital cost reports. Note: Note and Source are in InDesign. 2002 2003 Source: To set inpatient payment rates, CMS uses a clinical relative weights into dollar payment amounts. A more categorization system called Medicare severity–diagnosis detailed description of the OPPS can be found at http:// related groups (MS–DRGs). The MS–DRG system (which www.medpac.gov/documents/MedPAC_Payment_ replaced the prior DRG system in 2008) classifies patient Basics_12_OPD.pdf. cases in one of 750 groups, which reflect similar principal Notes about this graph: diagnoses, procedures, and severity levels. The severity levels are • determined Data is in according the datasheet. to whether Make patients updates have in a the datasheet. complication or comorbidity (CC) associated with the base Are Medicare payments adequate in • WATCH FOR GLITCHY RESETS WHEN YOU UPDATE DATA!!!! DRG (no CC, a nonmajor CC, or a major CC). A more 2013? • The column totals were added manually. detailed description of the acute IPPS, including payment adjustments, • I had can to be manually found at http://www.medpac.gov/ draw tick marks and axis lines To judge because whether they payments kept resetting for 2013 when are adequate I changed to any data. documents/MedPAC_Payment_Basics_12_hospital.pdf. cover the costs that efficient hospitals incur, we examine • I can’t delete the legend, so I’ll just have to crop it out in InDesign. several indicators of payment adequacy. We consider Hospital • outpatient Use direct selection payment tool system to select items for modification. beneficiaries’ Otherwise access to care, if you hospitals’ use the access black to selection capital, tool, they default when you change the data. changes in the quality of care, and the relationship of The OPPS pays hospitals a predetermined amount per Medicare’s payments to hospitals’ costs for both average service. • CMS Use assigns paragraph each outpatient styles (and service object to one styles) of to format. and relatively efficient hospitals. Most of our payment approximately • Data 850 was ambulatory from: R:\Groups\MGA\data payment classification book adequacy 2007\data indicators book for 2007 hospitals chp1 are positive, but on (APC) groups. Each APC has a relative weight based on average, margins on Medicare patients remain negative for its median cost of service compared with the median cost most hospitals. of a midlevel clinic visit. A conversion factor translates 46 Hospital inpatient and outpatient services: Assessing payment adequacy and updating payments 2004 2005 2006 Fiscal year 2007 2008 More hospitals opened... 2009 2010 Opened Closed 2011
Beneficiaries’ access to care: Access remained positive, as hospital capacity generally grew over the period reviewed We assess beneficiaries’ access to care by tracking the number of hospitals participating in the Medicare program, the proportions of hospitals offering certain specialty services, and the volume of services received. In general, we find that access to hospital services is good and has expanded from the previous year. More hospitals opened than closed In 2011, 18 ACHs opened and 8 closed (Figure 3-1). For the 10th consecutive year, hospital openings exceeded closings. 1 Overall, approximately 4,800 short-term ACHs participated in the Medicare program in 2011. Of them, 1,329 were CAHs (Flex Monitoring Team 2012). Hospitals that entered the Medicare program in 2011 were generally the same size as those that left the program. The 18 hospitals that entered the program in 2011 had 98 beds on average, representing approximately 1,800 new acute care beds. All but two of these hospitals opened in urban areas, and slightly more than half were nonprofit hospitals. Four of the hospitals that entered the program opened in Florida, three opened in California, and the remaining hospitals were dispersed across the country. In earlier years, many new entrants appeared to be specialty hospitals, but in 2011 most were small or midsized hospitals offering a slightly broader range of services. This shift reflects the new rules enacted in 2010 as part of the Patient Protection and Affordable Care Act of 2010 (PPACA), which prohibited physicians from referring patients to new physician-owned hospitals in which they were investors. The eight hospitals that exited the program in 2011 were similar in size and geographic location. With an average size of 85 beds, the exit of these hospitals amounted to roughly 700 closed acute care beds. Six closures occurred in urban locations and two in rural locations. For most of these facilities, we observed a decline in their total (allpayer) margins over each of the last three years, which were less than –10 percent in one or more of the years between 2008 and 2010. These hospitals had an average inpatient occupancy rate of 37 percent, significantly lower than the national average of approximately 60 percent. Although the shares of Medicaid patients varied across each of these hospitals over their last three years of service, their share of Medicaid inpatient admissions generally increased. In addition, hospitals that closed were FIguRe FIGURE Cumulative percent change 3–2 3-2 40 35 30 25 20 15 10 5 0 -5 -10 2004 Medicare outpatient services grew Medicare inpatient discharges per while hospital inpatient discharges.... beneficiary declined as outpatient visits per beneficiary increased Outpatient services per FFS Part B beneficiary Inpatient discharges per FFS Part A beneficiary 2005 2006 2007 2008 2009 2010 Note: FFS (fee-for-service). Data include general and surgical hospitals, critical access, and children’s hospitals. Source: Medicare hospital cost reports and Medicare outpatient claims data. Note: Note and Source in InDesign. Year 33.6 –7.8 2011 located an average of six miles from the nearest hospital, and the average occupancy rate of that hospital was typically 15 to 20 percentage points higher. Volume of services: Inpatient declines as outpatient grows The shift of services from the inpatient to the outpatient setting continued in 2011. To examine changes in volume in the two settings, we used the number of admissions per FFS beneficiary as an indicator of inpatient volume and the number of services per beneficiary to measure outpatient volume. In 2011, Medicare inpatient admissions per FFS beneficiary declined 1.3 percent per Part A beneficiary and had a cumulative reduction of 7.8 percent from 2004 to 2011 (Figure 3-2). 2 Notes about this graph: • Data is in the datasheet. Make updates in the d • I had to force return the items on the x-axis. They • I had to manually draw tick marks and axis lines • Use direct selection tool to select items for modi default when you change the data. • Use paragraph styles (and object styles) to forma The decline in inpatient admissions occurred while outpatient volume increased by 4.4 percent per Part B beneficiary from 2010 to 2011 and by 33.6 percent cumulatively from 2004 to 2011. This shift in the site of service from inpatient to outpatient settings occurred across all types of insurance (American Hospital Association 2011). In particular, surgeries shifted from inpatient to outpatient settings. From 2010 to 2011, Report to the Congress: Medicare Payment Policy | March 2013 47
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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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Page 32 and 33: FIguRe FIGURE 1-2 1-2 12% Out of po
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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
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Page 44 and 45: FIGURE FIguRe 1-10 1-10 8% African
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Page 48 and 49: Americans than for other racial and
Page 50 and 51: References Agency for Healthcare Re
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Page 59 and 60: may go up when payment rates go dow
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Page 80 and 81: FIguRe FIGURE Annual percent change
Page 82 and 83: FIGURE FIguRe Margin (in percent) 3
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Page 94 and 95: endnotes 1 From 2002 to 2011, 479 h
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Page 99 and 100: C H A p t e R4 physician and other
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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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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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