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Impacts of PPS on Medicare Part B expenditures and utilization for hospital episodes of care.

The universe of Medicare claims for four states from 1983 through 1986 is used to examine the impacts Medicare's prospective payment system (PPS) makes on hospital lengths of stay and on Part B expenditures for physician services associated with hospital stays. The descriptive results show that lengths of stay have fallen, while both inpatient and outpatient expenditures have risen. The regression results, on the other hand, show that PPS has reduced both lengths of stay and expenditures, and that other factors, such as increases in physician fees and patients' severity of illness, account for expenditure increases.

Diagnosis-Related Groups↗

Changing physician behavior: does medical review of Part B Medicare claims make a difference?

This study attempts to determine whether the implementation of mandatory review of Medicare Part B claims for medical necessity has resulted in physicians submitting fewer medically unnecessary claims. After summarizing the literature on the effectiveness of various methods for changing physician practices, we compare the rate at which physicians submitted medically unnecessary claims before and after HCFA imposed mandatory review screens. We find that, consistent with expectations from the literature, the screens are only marginally effective (at best) in reducing the rate at which medically unnecessary claims are submitted. We make some suggestions for lowering this rate.

Cost Control↗

What price, Medicare? Geographic variability in Medicare physician payment levels.

This study assesses the problems and prospects in developing one or more geographic indices of physician practice costs for Medicare Part B. I used a modified Laspeyres price index approach to compute practice cost indices, aggregated to the level of existing Medicare Part B payment areas and also created an index of Medicare payment levels. In comparing this prevailing charge index with the various geographic practice cost estimates, I found a considerable range in some individual localities' values within practice cost indices that in aggregate appear to be highly correlated. For the most part, estimated costs and prevailing charges appear to be comparable. However, results indicate that not every low paid area is underpaid relative to costs and not every highly paid area is overpaid.

Catchment Area, Health↗

Resource-based relative value scale: a new payment system for practitioners under Medicare.

Congress has directed the Physician Payment Review Commission to evaluate ways that the Part B Medicare program may be changed to modify the way physicians are reimbursed and to slow down the growth of expenditures in the program. This survey article summarizes the work in the development of a resource-based relative value scale (RVS), discusses the major issues dealt with by the PPRC, the results of Congressional action, and the issues of concern for optometrists.

Fee Schedules↗

Impact of the Medicare fee schedule on payments to physicians.

Beginning in 1992, the Medicare program will pay physicians by the Medicare Fee Schedule, a system of geographically adjusted standardized payment rates based in part on the Resource-Based Relative Value Scale developed by Hsaio et al and in part on current Medicare payments. In our simulations of the Medicare Fee Schedule, we find that (1) redistributions of Medicare-allowed charges across specialities will be substantial but approximately only half the size projected by Hsaio, (2) there will be large redistributions among geographic areas that tend to compound the specialty redistributions, and (3) there will be wide variation within specialties as to how individual providers are affected. The majority of the redistributive impact of the Medicare Fee Schedule is attributable to implementation of a geographically adjusted system of standardized payments rather than to the particular work values developed by Hsiao et al in the Resource-Based Relative Value Scale.

Costs and Cost Analysis↗

Texas physicians fare poorly with geographic practice cost index.

Big changes in the way Medicare pays physicians are coming, thanks to the Omnibus Budget Reconciliation Act of 1989 (OBRA). TMA is monitoring and participating in the plans for those changes. Beginning in 1992, a new fee schedule-based payment system will be phased in over the following 5 years. The Medicare Fee Schedule will be based on three components: the Resource Based Relative Value Scale (RBRVS), a conversion factor, and a geographic adjustment factor, known as the geographic practice cost index (GPCI). In this special section on GPCIs, three experts discuss the effect the GPCIs may have on Texas physicians.

Abstracting and Indexing↗

Variations in coding practices among Connecticut urologists for the Medicare population.

As health care costs continue to rise, alternatives to the traditional fee for service system of physician reimbursement are being explored. Recently a resource-based relative-value system was enacted by Congress to correct some of the perceived inequities of Medicare reimbursement. Since reimbursement for evaluation and management services, also known as cognitive services, are based on Current Procedural Terminology (CPT-4) codes, we reviewed Medicare claims data for fiscal year 1986-87 to identify the coding habits of Connecticut urologists. We found that Connecticut urologist file 99% of their claims for cognitive services in one of six categories. Furthermore, we found that within these broad categories an average of 82% of the claims were filed under one primary practice specific code. The particular code selected, however, varied markedly between practices. Our data suggest that Connecticut urologists have adopted different standards for using CPT-4 codes and have adjusted for these differences through their fee schedules. These findings highlight the need for increased precision in CPT code definitions for cognitive services before they can be adapted to a reimbursement system based upon relative-value scales.

Abstracting and Indexing↗

Medical society campaigns to reduce red tape for physicians.

The American Society of Internal Medicine is launching a campaign to attack the "hassle factor" in medicine, which, physicians say, damages patient care and undermines their decisionmaking process. In a white paper titled The Hassle Factor: America's Health Care System Strangling in Red Tape, the society outlines how government and private payer regulations are increasing costs, reducing access, and hurting patient care. The degree to which these regulations are driving physicians out of practice directly affects hospitals.

Humans↗

The influence of physician specialty on housecalls.

Despite growing numbers of frail elderly, physicians make housecalls infrequently. We surveyed 1000 primary care physicians from Virginia regarding their attitudes and knowledge about housecalls, and 389 completed questionnaires (response rate, 52%): 185 family physicians, 36 general practitioners, 101 general internists, and 63 subspecialists. Despite similar proportions of homebound patients and practice demographics, family physicians (69%) and general practitioners (63%) were significantly more likely than either internists (53%) or subspecialists (37%) to make routine housecalls. Although all four groups thought the fee was rarely a motivation, internists and subspecialists suggested larger increases. Also, internists and subspecialists were less likely than family physicians or general practitioners to increase housecalls with increased payment. Internists and subspecialists also were more likely than family physicians or general practitioners to report that housecalls were often unnecessary, not "enjoyable," "inefficient," and unimportant. While improved reimbursement may lead to increased housecalls by family physicians, future strategies should include efforts to change internists' attitudes.

Aged↗