Estimates of the savings potential of a managed-care program for a Medicare retiree population in Michigan under a hypothetical Medicare insured group (MIG) are presented in this article. In return for receiving an experience-rated capitation payment, a MIG would administer all Medicare and employer complementary benefits for its enrollees. A study of the financial and operational feasibility of implementing a MIG for retirees of a national corporation involving an analysis of 1986 claims data finds that selected managed-care initiatives implemented by a MIG would generate an annual savings of 3.8 percent of total (Medicare plus complementary) expenditures. Although savings are less than the 5 percent to be retained by Medicare, this finding illustrates the potential for savings from managed-care initiatives to Medicare generally and to MIGs elsewhere, where savings may be greater if constraints are less restrictive.
Although an increasing number of hospitals are reporting net losses from the Medicare prospective payment system (PPS) for inpatient care, overall hospital facility profit rates remain stable. Hospitals that reported net profits in the Medicare inpatient PPS sector in PPS 7 (1990) had smaller increases in Medicare expenses than hospitals that reported PPS losses in PPS 7. Medicare PPS inpatient net losses in PPS 7 were more than offset by non-Medicare net profits. Even though Medicare PPS revenues grew more slowly than the gross domestic product from 1985 to 1990, other hospital revenues grew more rapidly.
This study examines Medicare health maintenance organization (HMO) enrollment under the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 (Public Law 97-248) from 1986 to 1993. It shows that there was moderate growth in the number of Medicare beneficiaries participating in the TEFRA risk program, reaching 1 in 20 beneficiaries in 1993. Medicare HMO enrollment is heavily concentrated in a few large plans, resulting in heavy concentrations geographically. California and Florida accounted for over one-third of Medicare HMO enrollees. One-half of the States have no Medicare HMO enrollment and one-fifth of the States have fewer than 15,000 Medicare HMO enrollees.
Since 1985, the Health Care Financing Administration (HCFA) has encouraged health maintenance organizations (HMOs) to provide Medicare coverage to enrolled beneficiaries for fixed prepaid premiums. Our evaluation shows that the risk program achieves some of its goals while not fulfilling others. We find that HMOs provide care of comparable quality to that delivered by fee-for-service (FFS) providers using fewer health care resources. Enrollees experience substantially reduced out-of-pocket costs and greater coverage. However, because the capitation system does not account for the better health of those who enroll, the program does not save money for Medicare.
This article provides an overview of the Medicare Transaction System (MTS), a Health Care Financing Administration (HCFA)-wide initiative to be implemented starting in 1997 which will develop a national, standard, integrated, government-owned, contractor-operated Medicare claims processing system that will meet the challenges confronting Medicare over the next 2 decades. The authors discuss MTS goals and objectives, major features, how it will work, standardization efforts being undertaken in support of the initiative, contracting efforts involved, and project status.
This overview discusses articles published in this issue of the Health Care Financing Review, entitled “Medicare Payment Systems: Moving Toward the Future.” These articles focus on the onjoing development of Medicare payment methodologies, their adoption by non-Medicare payers, and issues to be addressed in the development of all-payer systems based on these methodologies.
This article presents a system under consideration by the Health Care Financing Administration (HCFA) for incorporating a measure of severity of illness into the Medicare diagnosis-related groups (DRGs). DRG assignment is one of the main factors in determining the payment made for hospital inpatient services furnished to Medicare beneficiaries. Specifically, the formula used to calculate payment for a single Medicare hospital inpatient case takes an average payment rate for a typical case and multiplies it by the relative weight of the DRG to which it is assigned. Thus, it is easy to see that the DRG relative weights have a large impact on the payment a hospital receives. In this article, we describe the Medicare DRG prospective payment system (PPS), evaluate the various classification elements available for assessing severity of illness, describe the analyses used in formulating this proposal, and present the proposed DRG severity system.
Survey reports from the Medicare Current Beneficiary Survey (MCBS) were matched to Medicare administrative files to create the 1992 MCBS Cost and Use file. This file improves on previous MCBS Access-to-Care user files by representing the entire (ever enrolled) Medicare population and including services not covered by Medicare such as outpatient prescription drugs and long-term facility care. The matching and reconciliation process improved the accuracy and completeness of health care use and cost. For example, Medicare billing data corrected 22 percent of survey reports that did not record Medicare as a payer and 39 percent in which the amount was missing.
The Medicare Health Outcomes Survey (HOS) (originally called the Health of Seniors Survey) was developed as a longitudinal performance measure to assess the physical functioning and mental well being of Medicare beneficiaries over time. The survey was implemented nationally in Medicare managed care organizations (MCOs) as part of Medicare HEDIS®, 3.0/1998 and continues today. In 1998, a pilot test of the HOS in Medicare FFS was conducted; the pilot test concluded in 2001. This overview discusses the importance of functional status assessment, reviews the goals of the HOS, and explains how researchers and quality improvement professionals are using the data to explore functional status measurement issues, describe policy and programmatic implications for CMS, and identify opportunities to improve health care practice.
This study estimates the effect of Medicare Advantage (MA) payments and State Medicaid policies on the choice by Medicaid eligible Medicare beneficiaries to either join a MA plan, remain in the fee-for-service (FFS) and enroll in Medicaid (dually enrolled), or remain in FFS Medicare without joining Medicaid. Individual plan choice was modeled using a multinomial logit. The sample includes Medicaid-eligible Medicare beneficiaries (including specified low income Medicare beneficiaries [SLMBs] and qualified Medicare beneficiaries [QMBs]) drawn from the 2000 Medicare Current Beneficiary Survey (MCBS). We find a $10 increase in monthly MA payment reduces the probability of dual enrollment by four percentage points, and FFS Medicare enrollment by 11 percentage points.
Cancer is a life threatening disease that affects thousands of Americans each year. Chemotherapy is one of the most effective treatments for the disease, but its prohibitive cost makes it all but unavailable to those without health insurance. The Medicare program provides coverage for chemotherapy treatment to 40 million Americans 65 and older, those in the highest risk group for developing cancer. Last year the Medicare program spent over five billion dollars on chemotherapy treatment, with 75 percent of this money being paid to oncologists to reimburse them for the prescription drugs they administer to Medicare beneficiaries during chemotherapy treatment. Through a practice known as the â€œchemotherapy concession,â€ oncologists purchase prescription chemotherapy drugs from their manufacturers and wholesalers, administer the drugs to patients, and then bill Medicare for reimbursement. This payment from Medicare often far exceeds the actual cost of the drugs to the physicians who purchased them. Government audits have found that profit margins for doctors of 80 to 90 percent are not uncommon in these transactions. Critics contend that this practice encourages doctors to over-prescribe chemotherapy and jeopardizes the continued coverage of chemotherapy treatment by the Medicare program. Oncologists have maintained...
Amidst mounting federal debt, slowing the growth of health care spending is one of the nation’s top domestic priorities. This dissertation evaluates three current policy ideas: (1) global payment within an accountable care contracting model, (2) physician fee cuts, and (3) expanding the role of competitive bidding in Medicare. Chapter one studies the effect of global payment and pay-for-performance on health care spending and quality in accountable care organizations. I evaluate the Blue Cross Blue Shield of Massachusetts Alternative Quality Contract (AQC), which was implemented in 2009 with seven provider organizations comprising 380,000 enrollees. Using claims and quality data in a quasi-experimental difference-in-differences design, I find that the AQC was associated with a 1.9 percent reduction in medical spending and modest improvements in quality of chronic care management and pediatric care in year one. Chapter two studies Medicare’s elimination of payments for consultations in the 2010 Medicare Physician Fee Schedule. This targeted fee cut (largely to specialists) was accompanied by a fee increase for office visits (billed more often by primary care physicians). Using claims data for 2.2 million Medicare beneficiaries, I test for discontinuities in spending...
Objective. Although an increasing fraction of Medicare beneficiaries die outside the hospital, the proportion of total Medicare expenditures attributable to care in the last year of life has not dropped. We sought to determine whether disproportionate increases in hospital treatment intensity over time among decedents are responsible for the persistent growth in end-of-life expenditures.
Data Source. The 1985–1999 Medicare Medical Provider Analysis and Review (MedPAR) and Denominator files.
Study Design. We sampled inpatient claims for 20 percent of all elderly fee-for-service Medicare decedents and 5 percent of all survivors between 1985 and 1999 and calculated age-, race-, and gender-adjusted per-capita inpatient expenditures and rates of intensive care unit (ICU) and intensive procedure use. We used the decedent-to-survivor expenditure ratio to determine whether growth rates among decedents outpaced growth relative to survivors, using the growth rate among survivors to control for secular trends in treatment intensity.
Data Collection. The data were collected by the Centers for Medicare and Medicaid Services.
Principal Findings. Real inpatient expenditures for the Medicare fee-for-service population increased by 60 percent...
Objectives: Private insurance plans typically reimburse doctors of chiropractic for a range of clinical services, but Medicare reimbursements are restricted to spinal manipulation procedures. Medicare pays for evaluations performed by medical and osteopathic physicians, nurse practitioners, physician assistants, podiatrists, physical therapists, and occupational therapists; however, it does not reimburse the same services provided by chiropractic physicians. Advocates for expanded coverage of chiropractic services under Medicare cite clinical effectiveness and patient satisfaction, whereas critics point to unnecessary services, inadequate clinical documentation, and projected cost increases. To further inform this debate, the purpose of this commentary is to address the following questions: (1) What are the barriers to expand coverage for chiropractic services? (2) What could potentially be done to address these issues? (3) Is there a rationale for Centers for Medicare and Medicaid Services to expand coverage for chiropractic services? Methods: A literature search was conducted of Google and PubMed for peer-reviewed articles and US government reports relevant to the provision of chiropractic care under Medicare. We reviewed relevant articles and reports to identify key issues concerning the expansion of coverage for chiropractic under Medicare...
Thesis (Ph.D.)--University of Rochester. School of Medicine and Dentistry. Dept. of Community and Preventive Medicine, 2008.; Dual eligible beneficiaries are persons who are eligible for both Medicare and
Medicaid. They are among the poorest, sickest populations in the U.S., and cost
Medicare about 60% more per person than do non-dual enrollees. The Balanced
Budget Act (BBA) of 1997 changed the reimbursement model for Medicare Home
Health Care (HHC) from a cost-based method to a bundled Prospective Payment
System (PPS). Before the PPS was implemented in 2000, Medicare HHC agencies
were reimbursed during 1997-2000 by an Interim Payment System (IPS). Studies
evaluating the effect of the BBA on HHC have mostly focused on the impact among
Medicare beneficiaries in general. Little is known about the effect of the BBA on dual
eligibles, as well as its effect on HHC paid for by Medicaid.
This dissertation used Medical Expenditure Panel Survey (MEPS) data from
the pre-BBA (01/1996-09/1997), IPS (10/1997-09/2000), and PPS (10/2000-12/2003)
periods. The study developed a transition probability model to evaluate changes in
utilization and employed the Centers for Medicare and Medicaid Services
Hierarchical Condition Categories (CMS-HCC) model to access changes in patient
HHC case- mix resulting from the BBA.
I confirmed my hypotheses that the BBA had different impacts on case-mix
for Medicare HHC and Medicaid HHC among dual eligible beneficiaries during IPS
Appointed by Premier Romanow in June 2000, the Commission was given a three-fold mandate. First, to identify key challenges facing the people of Saskatchewan in reforming and improving Medicare; second, to recommend an action plan for delivery of health services across Saskatchewan through a model that is sustainable and embodies the core values of Medicare; and third, to investigate and make recommendations to ensure the long-term stewardship of a publicly funded, publicly administered Medicare system.; This report was downloaded from the Government of Saskatchewan website (http://www.health.gov.sk.ca/medicare-commission-final-report) (accessed November 14, 2011).; Paper copy - CA2 SA H760 2001C15 Stauffer Library - Documents: (https://qcat.library.queensu.ca/vwebv/holdingsInfo?bibId=1718283)
Objective. To discuss and quantify the incentives that Medicare managed care plans have to avoid (through selective enrollment or disenrollment) people who are at risk for very high costs, focusing on Medicare beneficiaries in the last year of life—a group that accounts for more than one-quarter of Medicare's annual expenditures.
Data Source. Medicare administrative claims for 1994 and 1995.
Study Design. We calculated the payment a plan would have received under three risk-adjustment systems for each beneficiary in our 1995 sample based on his or her age, gender, county of residence, original reason for Medicare entitlement, and principal inpatient diagnoses received during any hospital stays in 1994. We compared these amounts to the actual costs incurred by those beneficiaries. We then looked for clinical categories that were predictive of costs, including costs in a beneficiary's last year of life, not accounted for by the risk adjusters.
Data Extraction Methods. The analyses were conducted using claims for a 5 percent random sample of Medicare beneficiaries who died in 1995 and a matched group of survivors.
Principal Findings. Medicare is currently implementing the Principal Inpatient Diagnostic Cost Groups (PIP-DCG) risk adjustment payment system to address the problem of risk selection in the Medicare+Choice program. We quantify the strong financial disincentives to enroll terminally ill beneficiaries that plans still have under this risk adjustment system. We also show that up to one-third of the selection observed between Medicare HMOs and the traditional fee-for-service system could be due to differential enrollment of decedents. A risk adjustment system that incorporated more of the available diagnostic information would attenuate this disincentive; however...
A physician's Medicare assignment rate is one measure of his or her willingness to participate in the Medicare program. The assignment rate reflects the proportion of services provided to Medicare beneficiaries for which the physician accepts the Medicare reasonable fee as payment in full. Generally, Medicare reasonable fees are lower than the payment which a physician receives from providing the same service to a private patient or to a Medicare patient who is not treated on assignment. Because Medicare eligibles not treated on an assigned basis are financially liable for the difference between the physician's charge and the Medicare reasonable fee, the assignment rate is an indication of the out-of-pocket costs borne by Medicare eligibles.
Strong interest by Congress in a Medicare prospective payment system for skilled nursing facilities (SNF's) resulted in a major study by the Health Care Financing Administration on the Medicare SNF benefit. This article highlights findings from that study, which addressed the following: the Medicare SNF benefit, utilization and expenditures, the Medicare SNF industry, problems with the current Medicare SNF reimbursement system, efforts to develop a Medicare SNF case-mix measure, and case-mix differences between hospital-based and freestanding SNF's. In addition, we discuss the implications of the study findings for the design of a Medicare SNF prospective payment system (PPS).
Objectives: To assess patients 1) satisfaction with their decision to enroll or not enroll in the Medicare Part D program, and 2) clinical status of diabetes before and after decision to enroll in Medicare Part D. Methods: Patients 65 years or older were enrolled in the study from November 2006 through February 2007. Patients were screened by a clinical pharmacist at their clinician visit and administered a Medicare Part D satisfaction survey. Upon completion of the survey, a retrospective chart review was completed in diabetic patients who were enrolled in Medicare Part D to assess goal attainment of glycosylated hemoglobin (HbA1c), low-density lipoprotein (LDL) and blood pressure. Pre-enrollment values were obtained in the 6 months prior to the start of Medicare Part D enrollment (July 1- December 31, 2005). Post-enrollment values were obtained after enrollment was complete for the 2006 year (May 1- October 31, 2006). Results: Results show that 74% (60/81) of patients surveyed were enrolled into the Medicare Part D program, including patients who have dual eligibility. Of the 60 patients who were enrolled in Medicare Part D, 48 patients (80.0%) responded that they were satisfied with their decision to enroll. Clinical outcomes were unchanged from the pre-enrollment to the post-enrollment periods. Mean HbA1c was 7.47% in the pre-enrollment period and 7.25% post-enrollment (difference pre-post = 0.23; 95%CI = -0.28 to 0.73). There was no change in LDL in the two time periods (pre = 79.4 mg/dL; post = 79.7; difference pre-post = -0.25; 95%CI = -13.6 to 13.1). Similarly...