Voluntary partial capitation: the Community Nursing Organization Medicare demonstration

In a recently concluded Medicare demonstration, Community Nursing Organizations (CNOs) received capitated payment to provide a subset of Medicare services through a nursing case management delivery system. Demonstration participation was voluntary, both for CNOs and recruited beneficiaries, raising several challenging issues associated with selection. We investigate provider and beneficiary selection, as well as Medicare costs, using multiple evaluation methodologies. We find that CNO enrollment is associated with increased payment by Medicare for CNO-covered services. Results showing CNO enrollees to be more costly to Medicare for non-CNO services are consistent with cost shifting, but could also be accounted for by biased provider selection into the demonstration.     

Impact of Critical Access Hospital Conversion on Beneficiary Liability

ABSTRACT: Context: While the Medicare Critical Access Hospital (CAH) program has improved the financial viability of small rural hospitals and enhanced access to care in rural communities, the program puts beneficiaries at risk for paying a larger share of the cost of services covered under the Medicare part B benefit. Purpose: This paper examines the impact of hospital conversion to CAH status on beneficiary out‐of‐pocket coinsurance payments for hospital outpatient services. Methods: The study is based on a retrospective observational design using administrative data from Medicare hospital cost reports and fee‐for‐service beneficiary claims from 1999 to 2003. The study compares changes in beneficiary co‐payments before versus after CAH conversion with payment trends among small rural non‐converting hospitals over the same period. Findings: Conversion to CAH status is associated with an increase in beneficiary coinsurance payments per outpatient visit of $17.19, equivalent to 34% of the sample average. However, CAH designation had no significant effect on the share of outpatient costs paid by the beneficiary. Most of the increase in beneficiary liability associated with conversion is attributable to the provision of more services per outpatient visit. Conclusions: While this and other studies show that conversion to CAH status results in more intensive outpatient care, CAH conversion does not appear to inadvertently create financial barriers to accessing ambulatory services in remote rural communities by forcing beneficiaries to pay a higher share of their Medicare part B costs.     

Medicare beneficiary satisfaction with durable medical equipment suppliers

CMS has recently launched a series of initiatives to control Medicare spending on durable medical equipment (DME) and prosthetics, orthotics, and supplies (DMEPOS). An important question is how these initiatives will affect beneficiary satisfaction. Using survey data, we analyze Medicare beneficiary satisfaction with DMEPOS suppliers in two Florida counties. Our results show that beneficiaries are currently highly satisfied with their DMEPOS suppliers. Beneficiary satisfaction is positively related to rapid delivery, training, dependability, and frequency of service. Results of our analysis can be used as baseline estimates in evaluating CMS initiatives to reduce Medicare payments for DMEPOS.     

Do the Medicaid and Medicare programs compete for access to health care services? A longitudinal analysis of physician fees, 1998–2004

As the demand for publicly funded health care continues to rise in the U.S., there is increasing pressure on state governments to ensure patient access through adjustments in provider compensation policies. This paper longitudinally examines the fees that states paid physicians for services covered by the Medicaid program over the period 1998–2004. Controlling for an extensive set of economic and health care industry characteristics, the elasticity of states’ Medicaid fees, with respect to Medicare fees, is estimated to be in the range of 0.2–0.7 depending on the type of physician service examined. The findings indicate a significant degree of price competition between the Medicaid and Medicare programs for physician services that is more pronounced for cardiology and critical care, but not hospital care. The results also suggest several policy levers that work to either increase patient access or reduce total program costs through changes in fees.     

Supply and demand factors in the determination of Medicare expenditures.

This article presents multivariate estimates of the effects of supply-side factors (e.g., provider reimbursement) and demand-side factors (e.g., beneficiary ability to pay) on state-level expenditures per enrollee in Medicare Part A and Part B. The results indicate that a 1 percent increase in elderly income significantly increases the propensity to use Medicare Part B services, resulting in a 0.45 percent increase in Part B expenditures per enrollee. By contrast, patients' ability to pay has a much weaker effect on Part A expenditures. Changes in provider reimbursement also exert a substantial effect on expenditures. A 1 percent rise in the Medicare Prevailing Charge Index raises Medicare Part B expenditures by 0.43 percent. Collectively, the findings of this study suggest that both limits on Medicare reimbursement to providers and increased beneficiary liability have substantial effects on Medicare costs. Whatever the merits of arguments for or against such controls, the responsiveness of Medicare expenditures to equal percentage changes in supply and demand factors appears to be of a similar order of magnitude.     

Ambulatory Care Sensitive Hospitalization Rates in the Aged Medicare Population in Utah, 1990 to 1994: A Rural-Urban Comparison

The objective of this study is to compare the likelihood of hospitalization for conditions that are related to the adequacy and use of ambulatory health care services for Medicare beneficiaries residing in rural and urban regions in Utah. The Health Care Financing Administration's (HCFA) hospital discharge database (Utah hospitals: 1990 to 1994) was used to estimate hospitalization rates (with adjustment for out-of-state admissions) for ambulatory care sensitive conditions. Population estimates were obtained from HCFA beneficiary files. Regional hospitalization rates were obtained through ZIP code matching of the hospital discharge and beneficiary files. Medicare beneficiaries aged 65 and older residing in Utah during 1990 to 1994 are the subjects for the study. The main outcome measures include age and sex-adjusted hospitalization rates by region for the entire state and rate ratio estimates for nonurban regions. The results of the study show that Medicare beneficiaries residing in two rural-frontier regions were more likely than urban beneficiaries to be hospitalized for ambulatory care sensitive conditions. Rate ratio estimates were greater than 1.4 for both regions during the study period. These findings suggest a pattern of an increased burden of avoidable secondary complications and disease progression among Utah Medicare beneficiaries residing in some rural regions. This increased burden may be the result of limitations in the ambulatory care system, medical care provider supply, and/or beneficiary propensity to seek care. Variation in disease prevalence or hospital use patterns for these conditions also may be responsible for all or part of the observed variation in ambulatory care sensitive admission rates.     

Interactions between Medicare and Medicaid home care in Connecticut: responses to the 1997 BBA

Although overlaps exist in the provision of home care services financed by Medicare and Medicaid, interactions of the two funding sources at the beneficiary and home care provider levels have not been widely studied. The recent dramatic declines in Medicare home health spending present a rare opportunity to examine how changes in Medicare spending can affect the provision of Medicaid home care services. We conducted a study of Medicare-Medicaid dynamics in the state of Connecticut to shed light on the inter-relationships of the two funding sources.     

Medicare inpatient physician charges: an econometric analysis

To control Medicare physician payments, Congress in 1989 established volume performance standards (VPS) that tie future physician fee increases to the growth in expenditures per beneficiary. The VPS risk pool is nationwide, and many observers believe it is too large to affect behavior. VPS could be modified by defining a separate risk pool for inpatient physician services and placing each hospital medical staff at risk for those services. Using a national random sample of 500,000 Medicare admissions, we explore the determinants of medical staff charges and comment on the policy implications. Multivariate analysis shows that charges increase with case mix and bed size but, surprisingly, decrease with the level of teaching activity. The teaching result is explained by the substitution of residents for physicians in these hospitals.     

Interactions Between Medicare and Medicaid Home Care in Connecticut: Responses to the 1997 BBA

ABSTRACT

Although overlaps exist in the provision of home care services financed by Medicare and Medicaid, interactions of the two funding sources at the beneficiary and home care provider levels have not been widely studied. The recent dramatic declines in Medicare home health spending present a rare opportunity to examine how changes in Medicare spending can affect the provision of Medicaid home care services. We conducted a study of Medicare-Medicaid dynamics in the state of Connecticut to shed light on the inter-relationships of the two funding sources.     

Medicare Mental Health Parity: A High Potential Change that is Long Overdue

Recent changes in legislation regarding mental health parity in Medicare will revolutionize payment for mental health care and delivery systems. This commentary discusses why this policy change was essential to promote adequate care for populations served by Medicare and to address expected changes in beneficiary, provider, and plan behavior as more equitable payments by Medicare are implemented.     

The aging enterprise: in whose interests?

This paper revisits the aging enterprise in the context of the new competitive business ideology. Public policy has created an aging enterprise that assures that the needs of the aged will be processed and treated as a commodity. The medical-industrial complex, which comprises the most significant part of the aging enterprise, is a primary beneficiary of the recent reformulation of values and expectations vis-a-vis the state and the private sector. The new business ideology in health is aimed not only at controlling costs but, more importantly, at establishing health care as a market good like any other. Issues of access to needed services are raised for Medicare and Medicaid beneficiaries and for the uninsured. Budget cuts, medical cost control, and the market ideology are resulting in greater fragmentation, privatization, and corporatization of services, as indicated by the author's research on the private nonprofit health and social services sector in a sample of 8 states and 32 communities. In this paper, age-segregated politics and policies in the United States are challenged to utilize grass-roots political efforts that cross age and class barriers. Single-interest aging-based policies are criticized as a form of selfish separatism that could supplant an important and vitally needed intergenerational and coalition strategy.     

Impact of drug coverage on medical expenditures among the elderly

Our study compares expenditures for Medicare covered medical services among enrollees in three State pharmacy assistance programs with spending among low-income residents eligible or near-eligible for, but not enrolled in such State-sponsored programs after controlling for between-group differences in demographic, socioeconomic, health status, and insurance status characteristics. We estimate a two-part model in total and by type of service (inpatient, outpatient, and professional) and chronic condition (hypertension, heart disease, and arthritis). We find that drug coverage has no discernible effect on the use and cost of inpatient services, but is associated with a statistically significant increase in Medicare spending for physician services.     

Impact of drug coverage on medical expenditures among the elderly

Our study compares expenditures for Medicare covered medical services among enrollees in three State pharmacy assistance programs with spending among low-income residents eligible or near-eligible for, but not enrolled in such State-sponsored programs after controlling for between-group differences in demographic, socioeconomic, health status, and insurance status characteristics. We estimate a two-part model in total and by type of service (inpatient, outpatient, and professional) and chronic condition (hypertension, heart disease, and arthritis). We find that drug coverage has no discernible effect on the use and cost of inpatient services, but is associated with a statistically significant increase in Medicare spending for physician services.     

Consumer information and biased selection in the demand for coverage supplementing Medicare.

This study examines how the relationship between health insurance knowledge and the health status of health insurance consumers influences their decisions to purchase insurance coverage. Data from the federal Medicare health insurance program for the elderly in the United States are used. The basic Medicare program provides a limited amount of coverage for health care services obtained from any provider in the private fee-for-service (FFS) market. Beneficiaries of this program may choose to supplement the basic coverage which they receive by two mechanisms: either they may purchase private insurance designed to fill some of the gaps left by the federal program ('Medigap' policies), thereby remaining in the FFS market and preserving their choice of provider, or they may enroll in health maintenance organizations (HMOs), thereby leaving the FFS market and agreeing to use only those providers affiliated with the HMO, and in return receiving broader coverage at little additional out-of-pocket cost. The study was made possible by a unique data set which combines measures of beneficiary knowledge of Medicare coverage with measures of perceived health status, socio-economic characteristics, and insurance coverage choices for a sample of Medicare beneficiaries who participated in an educational workshop about their insurance coverage options. These data were used to estimate a multinomial logistic model of the determinants of insurance choices, where the options included the two listed above and a basic Medicare option. The study explicitly recognizes the interaction between insurance information and health status in health plan choice. These results show that knowledge of coverage does have a differential impact on the decision to purchase health insurance depending on health status. With a high level of knowledge, sicker beneficiaries are less likely to have basic Medicare alone, compared with HMOs or Medigap policies, while healthier beneficiaries are less likely to be enrolled in HMOs, compared with Medigap policies. This finding has important implications for the use of health status measures to adjust capitated payment formulas when knowledgable consumers have the option to enroll in HMOs or remain in the FFS environment. In the absence of health status adjusters for the HMO capitation payments, high levels of coverage knowledge may exacerbate inherent selection bias among these coverage options by healthier and sicker consumers of health insurance.     

Registered dietitians' coding practices and patterns of code use

Coding, coverage, and reimbursement are vital to the clinical segment of our profession. The objective of this study was to assess understanding and use of the medical nutrition therapy (MNT) procedure codes. Its design was a targeted, cross-sectional, Internet survey. Participants were registered dietitians (RDs) preselected based on Medicare Part B provider status, randomly selected RDs from the American Dietetic Association database based on clinical practice designation, and self-selected RDs. Parameters assessed were knowledge and use of existing MNT and/or alternative procedure codes, barriers to code use/compensation, need for additional codes for existing/emerging services, and practice demographics. Results suggest that MNT is being reimbursed for a variety of diseases and conditions. Many RDs working in clinic settings are undereducated about code use of any kind, reporting that code selection frequently is determined not by the RD providing the service, but by "someone else." Self-employed RDs are less likely to rely on others to administrate paperwork required for reimbursement, including selection of procedure codes for billable nutrition services. Self-employed RDs are more likely to be reimbursed by private or commercial payers and RDs working in clinic settings are more likely to be reimbursed by Medicare; however, the proportion of Medicare providers in both groups is high. RDs must be knowledgeable and accountable for both the business and clinical side of their nutrition practices; using correct codes and following payers' claims processing policies and procedures. This survey and analysis is a first step in understanding the complex web of relationships between clinical practice, MNT code use, and reimbursement.     

Centers for Medicare and Medicaid services tighten reimbursements

Hospitals will suffer when the Medicaid Recovery Audit Contractor (RAC) starts on Jan. 1, 2012, if case managers aren't scrutinizing those patients as closely as those who are covered by Medicare. Make sure your documentation is complete to avoid denials and prepare for appeals. Work with your state Medicaid provider to determine how the program will work in your state. Learn the rules for all states in which your patients reside. Be aware that the Medicaid RACs are charged with taking a proactive approach to identify potential fraud.