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Physician payment reform: implications for physicians and hospitals.

This article examines a number of problems with the Medicare system of paying for physician services. It examines and critiques three types of policy initiatives that are likely to be given serious consideration in the near future. These initiatives include the development of a physician fee schedule, modification of current policies toward balance billing, and the introduction of policies to control the growth in volume. The article concludes that the adoption of a fee schedule could have dramatic effects on fees for physician services. Moreover, there is likely to be significant redistribution of income between physician specialties and among physicians within specialties. There is likely to be increased pressure to limit balance billing and perhaps to adopt mandatory assignment for Medicare services. Policies to reduce the growth in volume such as expenditure target policies will also be seriously considered, though the implementation problems appear quite formidable.

Economics, Medical↗

Health Care Financing Administration: prohibition of reassignment of claims by providers and suppliers. Final rule.

These regulations prohibit a provider or a physician or other supplier of services from reassigning claims for Medicare reimbursement, except in certain specified situations. They also impose administrative sanctions on providers or physicians or other suppliers who violate the prohibition. A provider who violates this prohibition is subject to termination of its provider agreement; a physician or other supplier is subject to revocation of the right to receive assignment from Medicare beneficiaries. The regulations also impose the same administrative sanction on physicians and other suppliers who violate their assignment agreements, chiefly their agreement to accept the reasonable charge as the full charge for the service. The regulations implement certain provisions of the Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977 (Pub. L. 95-142). They are designed to prevent the sale of Medicare claims at a discount from face value and to protect beneficiaries from becoming liable for excessive charges by physicians and other suppliers.

Health Services Misuse↗

State variations in Medicare expenditures.

OBJECTIVES: This study examined variations in Medicare expenditures across states. METHODS: 1992 data on average Medicare expenditures per enrollee, users of services per 1000 enrollees, service use per user, and payment per unit of service were compared across states for various services. Weighted least squares regression analysis was employed to examine total Medicare expenditures per enrollee by state. RESULTS: Variation in Medicare expenditures across states is driven more by average number of service users per 1000 enrollees and average service units per user than by average payment per service unit. Medicare expenditures per enrollee by state are primarily a function of Medicare HMO penetration rate (P = .000), urban area (P = .001), hospital bed supply (P = .005), elderly mortality rate (P = .012), Medicare physician assignment rate (P = .026), percentage of primary care practitioners (P = .042), and interactions between urban elderly and percentage of primary care physicians (P = .005) and Black elderly and nursing home bed supply (P = .012). CONCLUSIONS: Before sweeping Medicare cuts are undertaken or excessive reliance on managed care occurs, attention should be focused on the current disproportionate distribution of expenditures across states.

Aged↗

Accuracy in the Outcomes and Assessment Information Set (OASIS): results of a video simulation.

There is little information regarding the accuracy of the Outcomes and Assessment Information Set (OASIS), the patient assessment tool mandated for use in Medicare-funded home health care. The purposes of this study were to evaluate the accuracy of OASIS completion by home health nurses and rehabilitation therapists, to compare responses of nurses and therapists, and to determine whether dispersion of answers would affect the home health resource group (HHRG) to which patients were assigned for Medicare home health care payments to agencies. Using a video simulation of admission and discharge visits, 436 clinicians from 29 Ohio home health care agencies scored selected OASIS items. Although the majority of the items were rated accurately, discrepancies were found between clinician responses and the "correct" answer on several items. Nurses and therapists provided similar ratings on most items studied, but for most cases in which discrepancies were found, nurses were more likely to agree with the "correct" answer. Discrepancies most often led to patients being assigned to lower-payment HHRGs. Continued monitoring of OASIS data collection accuracy is recommended to maximize the value of the OASIS instrument in home health care research, practice, and policy.

Hip Fractures↗

Medicare program; revisions to payment policies under the physician fee schedule for calendar year 2005. Final rule with comment period.

This final rule refines the resource-based practice expense relative value units (RVUs) and makes other changes to Medicare Part B payment policy. These policy changes concern: supplemental survey data for practice expense; updated geographic practice cost indices for physician work and practice expense; updated malpractice RVUs; revised requirements for supervision of therapy assistants; revised payment rules for low osmolar contrast media; changes to payment policies for physicians and practitioners managing dialysis patients; clarification of care plan oversight requirements; revised requirements for supervision of diagnostic psychological testing services; clarifications to the policies affecting therapy services; revised requirements for assignment of Medicare claims; addition to the list of telehealth services; and, several coding issues. We are making these changes to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services. This final rule also addresses the following provisions of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. 108-17) (MMA): coverage of an initial preventive physical examination; coverage of cardiovascular (CV) screening blood tests; coverage of diabetes screening tests; incentive payment improvements for physicians in shortage areas; payment for covered outpatient drugs and biologicals; payment for renal dialysis services; coverage of routine costs associated with certain clinical trials of category A devices as defined by the Food and Drug Administration; hospice consultation service; indexing the Part B deductible to inflation; extension of coverage of intravenous immune globulin (IVIG) for the treatment in the home of primary immune deficiency diseases; revisions to reassignment provisions; and, payment for diagnostic mammograms, physicians' services associated with drug administration services and coverage of religious nonmedical health care institution items and services to the beneficiary's home. In addition, this rule updates the codes subject to the physician self-referral prohibition, discusses payment for set-up of portable x-ray equipment, discusses the third five-year refinement of work RVUs, and solicits comments on potentially misvalued work RVUs. We are also finalizing the calendar year (CY) 2004 interim RVUs and are issuing interim RVUs for new and revised procedure codes for CY 2005. As required by the statute, we are announcing that the physician fee schedule update for CY 2005 is 1.5 percent, the initial estimate for the sustainable growth rate for CY 2005 is 4.3, and the conversion factor for CY 2005 is $37.8975.

Centers for Medicare and Medicaid Services, U.S.↗

An evaluation of Utah's primary care case management program for Medicaid recipients.

One of the first case management (CM) programs for limiting Medicaid enrollees' freedom of choice of provider was established by Utah. By assigning enrollees to specific providers responsible for arranging all nonemergency care, Utah intended both to improve access and to reduce program costs. State officials expected the program to increase recipients' use of primary-care providers, while reducing their use of specialists, prescription drugs, and hospital outpatient services. Savings from reductions in unnecessary use were expected to more than offset increases in outlays arising from access enhancements, resulting in lower program expenditures. This study investigated the extent to which the state Medicaid program achieved these goals. The analysis was based on a two-part multivariate model of usage, estimated from data created from claims-level information provided by Utah. The findings revealed that the use of primary-care physician services increased significantly. However, the program also raised the use of specialists' services and prescription drugs. In contrast, the use of hospital outpatient services was lowered. Overall, CM apparently achieved the objective of increased access, but failed to attain the cost-containment goal. The findings indicated that expected costs for ambulatory care rose by 25% in the early years as a result of case management.

Cost Control↗

Use of specialty psychiatric settings in constructing DRGs.

Characteristics of a psychiatric setting, such as staffing intensity and scope of services, are examined to see if they contribute to explaining variation in length of stay over that explained by commonly available patient descriptors. For short-stay admissions (less than 31 days), only a small improvement in predictive ability was found. Implications for prospective payment systems are discussed.

Adult↗

Physician participation in Medicaid managed care.

Medicaid programs throughout the United States are moving away from fee-for-service medicine and increasingly towards managed care models in attempts to control rising health care costs. This study examines the participation of physicians in Arizona's prepaid, managed care Medicaid program, the Arizona Health Care Cost Containment System (AHCCCS). In particular, it considers the reasons that physicians decide to participate in AHCCCs, and for participants, the possible impact of these reasons on whether they participate fully or on a limited basis. A mail survey was sent to 300 primary care physicians in Arizona, of which 171 completed surveys were returned. Results suggested that physicians tend to participate because of reimbursement, approval of the 'type' of medicine that managed care allows them to practice, and their belief in Medicaid-type programs. Physician attitudes toward the patients, while generally negative, do not keep them from participating in Medicaid. However, the type of patients in AHCCCS is related to physician satisfaction with the AHCCCS health plans, as is reimbursement. The study indicates differences in the reasons for participation between Arizona's physicians and those in fee-for-service Medicaid programs of other states.

Adult↗