Who switches from Medigap to Medicare HMOs?

OBJECTIVE

To determine the factors affecting whether Medigap owners switch to Medicare managed care plans.

DATA SOURCES

The primary data were the 1993-1996 Medicare Current Beneficiary Survey (MCBS) Cost and Use Files. These were supplemented by data available from the Centers for Medicare & Medicaid Services (CMS) website.

STUDY DESIGN

Individuals on the MCBS files with Medigap coverage in the period 1993-1996 were included in the study. The person-year was the unit of analysis. We used multivariate logistic regression analysis to determine whether or not a Medigap owner switched to a Medicare-managed care plan during a particular year. Independent variables included measures of affordability, need for services, health insurance benefits, sociodemographics, and supply of managed care plans.

PRINCIPAL FINDINGS

We did not detect strong evidence that beneficiaries in poorer health were more likely than others to switch from Medigap coverage to Medicare-managed care. In addition, higher Medigap premiums did not appear to induce beneficiaries to switch into managed care.

CONCLUSIONS

We examined selection bias in joining managed care plans among the subset of Medicare beneficiaries who have Medigap policies. No strong evidence of selection bias was found in this population. We conclude that there was no evidence that the Medigap market is becoming prohibitively expensive as a result of unfavorable selection.

Trends in the utilization of MR angiography and body MR imaging in the US Medicare population: 1993-1998

PURPOSE

To determine the trends in utilization of non-neurologic (ie, body) magnetic resonance (MR) imaging and of MR angiographic examinations performed from 1993 to 1998, the trends in non-radiologist participation in MR imaging, and the relative reimbursements for these examinations compared with those for all other noninvasive imaging studies performed in 1998.

MATERIALS AND METHODS

By using the 1993, 1996, and 1998 nationwide Medicare Part B databases, utilization rates per 100,000 Medicare beneficiaries and physician reimbursements were determined for seven MR angiography and 14 body MR imaging CPT-4 (Current Procedural Terminology, version 4) codes. Medicare specialty codes were used to categorize physicians as radiologists or non-radiologists.

RESULTS

The utilization rate per 100,000 Medicare beneficiaries for all 21 MR angiography and body MR imaging codes increased from 649 in 1993 to 1,253 in 1996 and to 1,876 in 1998--a 189% increase. These rates represented 0.55% of the total noninvasive imaging volume in 1998 and 2.8% of physician reimbursements. Musculoskeletal MR imaging utilization increased 142% from 1993 to 1998 compared with a 58% increase in the utilization of other body MR imaging studies. Non-radiologist participation in musculoskeletal MR imaging increased from 2.9% in 1993 to 3.6% in 1996 and to 5.6% in 1998.

CONCLUSION

MR angiography and body MR imaging utilization rates increased substantially from 1993 to 1998. However, these studies still account for a minor fraction of all noninvasive imaging examinations performed and fees reimbursed. MR angiography and musculoskeletal MR imaging utilization has increased rapidly. Non-radiologist participation in musculoskeletal MR imaging is increasing.

Maintaining functional independence in elderly adults: the roles of health status and financial resources in predicting home modifications and use of mobility equipment

PURPOSE

We investigated whether health status (i.e., need characteristics) and financial resources (i.e., enabling characteristics) were important predictors of two types of functional adaptations among elderly adults: home modifications such as putting nonslip tape on rugs or installing more telephones and use of equipment for mobility or activities of daily living (ADLs) such as canes or walkers.

DESIGN AND METHODS

Participants were identified from the National Survey of Self-Care and Aging (n = 3,485), a nationally representative sample of noninstitutionalized U.S. adults aged 65 and older. Need and enabling characteristics were used to predict home modifications and equipment use in multinomial logistic analysis, controlling for predisposing characteristics.

RESULTS

Although several health-status (need) variables had significant, direct effects on functional adaptations, the effects of ADL limitations were diminished at higher levels of impairment. Among the financial (enabling) variables, subjective income measures and supplemental insurance had significant, direct effects on functional adaptations.

IMPLICATIONS

Promotion of functional adaptations among elderly people may benefit from both a proactive approach that targets elders with few limitations and a consideration of financial factors in addition to health status.

Medicare program; revisions to payment policies and five-year review of and adjustments to the relative value units under the physician fee schedule for calendar year 2002. Final rule with comment period

This final rule with comment period makes several changes affecting Medicare Part B payment. The changes affect: refinement of resource-based practice expense relative value units (RVUs); services and supplies incident to a physician's professional service;anesthesia base unit variations;recognition of CPT tracking codes; and nurse practitioners, physician assistants, and clinical nurse specialists performing screening sigmoidoscopies. It also addresses comments received on the June 8, 2001 proposed notice for the 5-year review of work RVUs and finalizes these work RVUs. In addition,we acknowledge comments received on our request for information on our policy for CPT modifier 62 that is used to report the work of co-surgeons. The rule also updates the list of certain services subject to the physician self-referral prohibitions to reflect changes to CPT codes and Healthcare Common Procedure Coding System codes effective January 1, 2002. These refinements and changes will ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services. The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 modernizes the mammography screening benefit and authorizes payment under the physician fee schedule effective January 1, 2002; provides for biennial screening pelvic examinations for certain beneficiaries effective July 1, 2001; provides for annual glaucoma screenings for high-risk beneficiaries effective January 1,2002; expands coverage for screening colonoscopies to all beneficiaries effective July 1, 2001; establishes coverage for medical nutrition therapy services for certain beneficiaries effective January 1, 2002; expands payment for telehealth services effective October 1, 2001; requires certain Indian Health Service providers to be paid for some services under the physician fee schedule effective July 1, 2001; and revises the payment for certain physician pathology services effective January 1, 2001. This final rule will conform our regulations to reflect these statutory provisions. In addition, we are finalizing the calendar year (CY) 2001 interim RVUs and are issuing interim RVUs for new and revised procedure codes for calendar year (CY) 2002. As required by the statute, we are announcing that the physician fee schedule update for CY2002 is -4.8 percent, the initial estimate of the Sustainable Growth Rate (SGR) for CY 2002 is 5.6 percent, and the conversion factor for CY 2002 is $36.1992.

The period prevalence and costs of treating nonmelanoma skin cancers in patients over 65 years of age covered by medicare

BACKGROUND

Nonmelanoma skin cancer (NMSC) prevalence and treatment costs are rapidly increasing at an unknown rate.

OBJECTIVE

To determine actual prevalence and treatment costs for NMSC in patients over 65 years of age covered by Medicare.

METHODS

We used a 5% random sample of Medicare claims available for 1994 and 1995. Demographic characteristics, period prevalence, treatment types and frequencies, treating physician specialty, and allowable treatment charges associated with the diagnosis of NMSC were analyzed and described.

RESULTS

More than 789,000 patients over age 65 covered by Medicare had a diagnosis and treatment for NMSC in 1995. Fifty-eight percent were men and 98% were Caucasian. The majority were from the South and West regions of the United States. Dermatologists treated more than 60% of these NMSCs. Treatment costs were approximately $285 million. The largest percentage of treatment expenditures (34%) was for excisions.

CONCLUSION

The number of patients with NMSC is far greater than previous estimates. Dermatologists treat the majority of NMSCs. The mean treatment cost per patient is $329. Total expenditures for NMSC eradication represent 0.7% of the Medicare budget. NMSC is a major public health concern because of its increasing prevalence, costs, and the aging U.S. population.

A new Medicare Part B wound care policy

Skin and wound care specialists should design an assessment tool that includes all the documentation required to prove medical necessity for the initial and continued use of NPWT, when appropriate for patients who are managing their wounds at home. In addition, specialists should supply the physician with the order form that is provided by the NPWT pump supplier. Finally, personnel should be trained to appropriately assess and document the need for NPWT. Once a Medicare Part B-covered patient at home qualifies for a NPWT pump and supplies, the supplier will deliver the equipment and supplies and will bill Medicare Part B directly. Payment will be 80% of the DMERC Fee Schedule. The patient will be charged 20% of the Medicare allowable fee.

Coding and billing issues in the vascular laboratory

Noninvasive vascular testing grew from a need for a safe, accurate, and inexpensive alternative to contrast injection venography and arteriography. The ultrasound studies performed to evaluate vascular disease today meet all expectations for safety and accuracy, and cost thousands of dollars less than their contrast counterparts, yet few sectors in medicine have been challenged so regularly by the Health Care Financing Administration (HCFA). Tests performed on duplex ultrasound instruments have prevented innumerable arterial and venous injuries and episodes of renal failure caused by contrast injection. Despite those laudable accomplishments, the financing agencies continue to reduce payments, threaten inappropriate supervisory requirements, and belittle the overall importance of the examinations. This report reviews the last decade of payment issues involving the vascular laboratory, pointing out inequities and problems that threaten not the quantity, but the quality, of this technology. The discussion focuses on Medicare Part B payments because they represent the majority of payments for noninvasive studies across the United States. The topics include payment denials, supervision issues, and problems associated with the zero work pool. In addition, the method by which HCFA calculates relative value unit (RVU) payments for procedures is included.

A moving target: financing Medicare for the future

Since 1997, there has been a steady downward trend in projected Medicare spending as a share of the gross domestic product (GDP), substantially improving the long-run outlook for Medicare. But even with improvements in outlook, the required share of GDP will rise by more than 70%, and the question remains as to who will pay for Medicare in the future. This report examines a limited set of tax options and a flat beneficiary premium to illustrate the size of contributions necessary to achieve several different goals, and to explore the difference that multiple years of projections can make on these requirements.

Paying for Medicare: benefits, budgets, and Wilbur Mills's policy legacy

Medicare features an unusually complex financing design. The Hospital Insurance Trust Fund pays for Part A of Medicare (hospital stays), while the Supplementary Medical Insurance Trust Fund finances Part B (doctor visits, outpatient care, and certain home health services). At a time when Medicare policy is generating debate, this article takes a new analytical look at the origins and consequences of the program's peculiar bifurcated structure. Addressing historians of the U.S. welfare state as well as contemporary health policy reformers, the article focuses on the crucial role of legendary Ways and Means Committee chair Wilbur Mills in Medicare's enactment in 1965. The central theme of the article is that fiscal conservatism and a commitment to budgetary restraint constitute important elements of Medicare's original political understanding. Contrary to analysts who argue that Medicare's financing design has produced "perverse" effects, we argue that it has served a valuable social function by encouraging policy makers to confront periodically the costs of one of the largest and fastest-growing federal programs. An argument can be made that Medicare's original division requires modification in order to integrate health care delivery changes of the past few decades. It is crucial, however, for reformers not to lose sight of the policy goals, including fiscal rectitude, that motivated the adoption of Medicare's bifurcated structure in the first place.

Including hospice in Medicare capitation payments: would it save money?

Hospice services received by Medicare risk-based health maintenance organization (HMO) enrollees are paid on a non-capitated basis, creating financial incentives for HMOs to encourage their terminally ill patients to elect hospice. Using Medicare administrative records for 1998, we found that hospice enrollment in the last month of life was significantly higher among HMO enrollees than among beneficiaries in fee-for-service (FFS). However, low mortality rates among HMO enrollees produced similar population-based rates of hospice use in the HMO and FFS sectors. Simulations showed that including hospice care under capitation payments in July 1998 would have produced very small savings for Medicare.

Medicare program; revisions to payment policies under the physician fee schedule for calendar year 2001. Health Care Financing Administration (HCFA), HHS. Final rule with comment period

This final rule with comment period makes several changes affecting Medicare Part B payment. The changes include: refinement of resource-based practice expense relative value units (RVUs); the geographic practice cost indices; resource-based malpractice RVUs; critical care RVUs; care plan oversight and physician certification and recertification for home health services; observation care codes; ocular photodynamic therapy and other ophthalmological treatments; electrical bioimpedance; antigen supply; and the implantation of ventricular assist devices. This rule also addresses the comments received on the May 3, 2000 interim final rule on the supplemental survey criteria and makes modifications to the criteria for data submitted in 2001. Based on public comments we are withdrawing our proposals related to the global period for insertion, removal, and replacement of pacemakers and cardioverter defibrillators and low intensity ultrasound. This final rule also discusses or clarifies the payment policy for incomplete medical direction, pulse oximetry services, outpatient therapy supervision, outpatient therapy caps, HCPCS "G" Codes, and the second 5-year refinement of work RVUs for services furnished beginning January 1, 2002. In addition, we are finalizing the calendar year (CY) 2000 interim physician work RVUs and are issuing interim RVUs for new and revised codes for CY 2001. 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 announces the CY 2001 Medicare physician fee schedule conversion factor under the Medicare Supplementary Medical Insurance (Part B) program as required by section 1848(d) of the Social Security Act. The 2001 Medicare physician fee schedule conversion factor is $38.2581.

Health care utilization by old-old long-term care facility residents: how do Medicare fee-for-service and capitation rates compare?

OBJECTIVE

To describe the healthcare utilization of a long-term care population receiving primary and specialty care in a closed system and to compare Medicare fee-for-service (FFS) reimbursement with the amount that would have been paid under capitation for these services.

SETTING

A life care community in California composed of two facilities, both having residential care and nursing facility (NF) beds.

PARTICIPANTS

Residents (n = 700) living in the community between September 1995 and February 1996.

METHODS

Data on Medicare Part A and Part B reimbursements were gathered from billing records for hospitalizations, based on diagnostic related group payments, primary and specialty care visits, various procedures, diagnostic tests, and therapeutic services. These data were compared with what the facility, in collaboration with the providers and an affiliated hospital, would have received under Medicare capitated rates at that time.

RESULTS

Annually, residents averaged 16.3 primary care visits, 7.7 specialist visits, and 3453 hospital days per thousand. Nursing facility residents received significantly more primary care than did those in residential care. Total Medicare Part A and B payments per resident per month averaged $558. The monthly capitation rate in effect at the time for this population was substantially higher at $1085, generating an annual "risk pool" of $9.1 million. Care provided in the two facilities varied greatly. Hospitalization rates, clinic-based primary care and specialist visits, and therapy sessions were greater in facility one. Overall expenditures were lower for residents at facility two, where the majority of care was provided by trained geriatricians in collaboration with physician extenders and without sophisticated clinical pathways and utilization controls.

CONCLUSIONS

Our data support other studies that suggest that teams of geriatricians and physician extenders can reduce hospitalization rates and overall expenditures. Capitated rates for the frail, geriatric population warrant careful study. These rates must balance fiscal responsibility with the need for adequate, risk-adjusted payments that create incentives for providers to produce high quality as well as cost-effective care.