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From page 199... ... Index [Page numbers followed by b, f, n, or t, refer to boxed Administrative staff of physician practice, 130 text, figures, footnotes, or tables, respectively.] Advanced practice nurses, 148 Affordable Health Care for America Act, 17, 29, 30 Agency for Healthcare Research and Quality, 21 A Ambulatory surgical centers, 9, 79–81, 83 American Community Survey Access to care access to data, 128 adjustments to address provider shortages, 29, commuting data, 94 56–57, 117, 147 employee compensation data, 132 hospital wage index policy adjustment add-ons to for GPCI calculation, 125, 126–127t, 128–129 improve, 62 limitations, 128–129 Phase 2 study goals, 147 physician work adjustment data, 11–12 research needs, 113–114 scope of, 128 Accountability American Housing Survey, 13 of data providers, 4 American Medical Association, 23, 118 integration of care and, 58 Average hourly wage Accountable Care Act, 58 accuracy, 72, 81 Accuracy of data health care practitioners, 54–55, 54t for creation of payment areas, 45–46 health care sectors, 54–55, 54t current system, 4, 31, 70–72 hospital wage index computations, 62–65, 81 definition, 4, 16n, 31 inputs and weighting, 73, 78–79 for hospital wage index calculation, 70 Occupational Employment Statistics for calculation Occupational Employment Statistics, 74–77 of, 74, 81 proxy data for physician income, 117, 124–125 relative value units, 118 strategies for improving, 4 B study goals, 2, 16–17, 18b, 29, 146 Accuracy of payments to facilities, 2, 15–16 Balanced Budget Act, 22, 87 Administrative burden of geographic adjustment Basic Allowance for Housing, 13 current hospital cost reporting and review, 73 Beneficiaries of Medicare labor market segmentation and, 55–56, 58 age distribution, 17 use of Bureau of Labor Statistics data and, 77, 82 current coverage, 1, 17 199 Read the entire page →
From page 200... ... 200 GEOGRAPHIC ADJUSTMENT IN MEDICARE PAYMENT economic status, 17 shortcomings, 109 geographic distribution, 17 technical development, 89 health status, 17 Contract wages impact of geographic adjustment determinations, 2 in hospital wage index, 72, 75–76 nonelderly, 1, 17 as percent of hospital personnel expenses, 75–76 Benefits valuation Conversion factor, 115 in Bureau of Labor Statistics data, 75, 82 Core-based statistical areas, 44b, 85, 93–94 in hospital wage index, 71–72, 75, 82 Cost-share weights, 10, 25, 118–119, 139 Blum, Jonathan, 19b Cost Survey for Single Specialty Practices, 135 Braley, Bruce, 28b Critical access hospitals, 62 Budget neutrality adjustments, 29, 89, 90b Current Procedural Terminology, 23, 25, 114 GPCI, 115–117 Customary, prevailing, and reasonable, 118 Bureau of Labor Statistics, 12 health care sector data, recommendations for use D of, 8, 12, 58–59, 81–82, 141 labor market smoothing with data from, 89 Dartmouth Atlas Project, 30, 52 See also Occupational Employment Statistics Data sources access to, 12, 117, 128 commuting patterns, 94 C current concerns and criticisms, 4, 16, 31 Capital as factor of production in health care system, for geographic variation in physician income, 37–38, 81 121–122 Care transitions, 58 for GPCI cost-share weights, 119 Center for Studying Health System Change, 122 for input price determinations, 2, 4 Centers for Medicare and Medicaid Services on labor market conditions, 4–5, 32 administrative costs, 55–56, 58, 73, 77, 82 for labor market smoothing, 89 perception of geographic adjustment policy physician office rent, 13, 132–135, 136t, 141–142 recommendations and implementation, 19b physician salary, 11–12 recommendations for, 8, 9, 10, 12, 13, 82, 83, for physician work adjustment, 4, 124–129 139–140, 141 for practice expenses GPCI adjustments, 130, 132 use of statistical areas, 43–45, 44b professional liability insurance premiums, 137–138 See also Medicare proxies for physician income calculation, 10–11 Combined statistical areas, 44b quality of current hospital wage index data, 70–74 Commuting, 7 recommendations for CMS access to BLS data, 12, consideration of, in current adjustment and 141 classification system, 93–94 recommendations for GPCI construction, 8, 12–13, data sources, 94 58–59, 141–142 hospital wage index adjustments, 22, 86–87 recommendations for hospital wage index labor market smoothing based on, 88, 93–102, construction, 8, 58–59, 81–82 107–109 research framework, 2–3, 33–34 modeling techniques, 9 strategies for improving hospital data, 73–74 patterns, 95, 96t study goals, 2, 4, 16–17, 18b, 31, 147 recommendations for smoothing labor market See also Accuracy of data borders and payment areas, 9–10, 109–110 Department of Defense, 13 Section 505 adjustment for, 87 Department of Health and Human Services, 2, 8, 13, 16 significance of, in setting labor market boundaries, 42 E wage index smoothing, 53 Congress, U.S., 2, 16, 29–30 Employee compensation recommendations for, 8, 81–82 data sources, 130, 132 Contiguous-county smoothing geographic adjustment rationale, 1–2 implementation, 91b health sector-level wages, 130 results of simulations, 91–93, 92t, 93t occupational mix, 130 Read the entire page →
From page 201... ... See also statistical areas, 79t specific components employee compensation in physician practices, 130, cost share weight calculations, 118–119, 119t 132 current concerns and criticisms, 2, 51, 115–117, Phase 2 study goals, 2, 147 124–125 quality of cost data, 4, 31 current structure and operations, 1, 15, 25, 114–117 study goals, 2, 3b, 17, 18b future of exceptions, 110 trends, 148 historical evolution, 116b See also Geographic practice cost indexes (GPCIs) Read the entire page →
From page 202... ... 202 GEOGRAPHIC ADJUSTMENT IN MEDICARE PAYMENT Health information technology, 148 purpose, 15, 38, 61 Health technicians, 130 quality of current data sources, 4, 5, 31, 32, 70–74, Healthcare Common Procedure Coding System, 23, 81 114 recommendations for data sources for construction Home health agencies of, 7, 8–9, 58–59, 81–82, 83 hospital wage index calculations, 9, 79–81, 83 recommendations for labor market and payment study goals, 2, 18b area definition, 7–8, 57–58, 118 Hospice facilities, 79–81 recommendations for occupational inputs, 9, 82 Hospital cost survey data, 7, 8 recommendations for revision of controlling statute, Hospital Outpatient Departments, 79–81 8, 81–82 Hospital payment areas recommendations for smoothing labor market alternative approaches to defining, 52–53 borders and payment areas, 9–10, 109–110 current structure, 42–43 rural floors, 87–88 metropolitan statistical areas and, 46–48 strategies for improving data for, 73–74 physician payment areas and, 7–8, 53–55, 57–58 strategies for improving geographic adjustment reclassification appeals, 48 system, 5–6, 32–33 Hospital referral regions, 52 study goals, 2, 3b, 18b Hospital service areas, 52 transparency of cost report data, 72 Hospital wage index types of labor market adjustments and exceptions, administrative burden of reporting and review, 73, 86, 87t 77 use of all-industry or health sector data in alternative approaches to defining labor markets for, calculation of, 4–5, 32, 39, 42, 48–50, 59, 52–53 70–71, 74–75, 75t, 76 benefits valuation in, 71–72, 75, 82 volatility, 50, 76 calculation from Occupational Employment wage data for defining, 48–51 Statistics, 74–79 See also Hospital payment areas case mix adjustment, 62 Housing costs, 41 circularity problem in data, 50–51, 71 comparative effects of adjustments in different I geographic areas, 62, 63t contract wages in, 72, 75–76 Index floors, 10 current data sources and calculation methodology, Indexes, defined, 1n, 15, 16b 1, 2, 4, 5, 7, 8, 18–21, 31, 32, 39b, 42–43, Inflation, 118–119 61–67, 81 Inpatient Prospective Payment System (IPPS) current geographic distribution, 22, 23f current methodology, 18–19 data needs for calculating, 70 current reclassifications and exceptions, 24f exceptions and reclassifications, 22, 86–88, 109, geographic adjustment in, 1–2, 15, 38–39 110 hospital wage index calculation, 61–62, 86 for facilities other than acute care hospitals, 9, number of hospitals by labor market, 71t 79–81, 83 Inpatient psychiatric facilities, 79–81 future of exceptions, 110 Inpatient rehabilitation facilities, 79–81 GPCI and, 5–6, 32–33 Input prices, health care historical evolution, 68–69b concerns about current geographic adjustment hospital-specific, 52–53 system determinations, 2 implementation of recommendations for, 13–14 geographic adjustment rationale, 1, 37 inputs and weighting, 9, 73, 78–79, 82–83 for GPCI calculations, 10 objectives for smoothing labor market borders, GPCI cost-share weights, 118–119 88–89 inflationary changes over time, 118–119 occupational mix in calculation of, 9, 21, 39–40, major factors of production, 37–38 78–79 price and cost distinctions in methodology for origins, 61 geographic adjustment, 19–21, 38–39, 51, 59 policy adjustment add-ons, 62 quality of data, 4, 31 pre-classified, pre-floor, 79, 80n, 86 recommendations for GPCI calculation, 12, 13, price and cost distinctions, 19–21, 61, 85 141–142 Read the entire page →
From page 203... ... defined by geopolitical units, 52–53 in construction of hospital payment areas, 42 definition of, in geographic adjustment geographic distribution, 43f methodology, 2, 21, 38, 85 number of, 5, 7, 21, 32, 42–43, 43n, 46, 55, 56 determinants of wage differentials, 40–41 wage variation within, 53, 55 as factor of production in health care system, 37–38 See also MSA/statewide non-MSA system geographic variation in costs, 38, 40–41 Micropolitan statistical areas, 42 hospital wage index exceptions and reclassifications, definition and characteristics, 44b 22, 23f geographic distribution, 43f number of, 5, 32 MSAs. See Metropolitan statistical areas occupational mix in, 9, 12, 21, 27–28, 39–40 MSA/statewide non-MSA system quality of data, 4–5, 32 advantages, 58 recommendations for defining, 7–8, 57–58, 85, 118 commuting behavior considerations in, 93 recommendations for smoothing borders of distribution of employment shares by health care payment areas and, 109–110 occupation, 79t types of adjustments and exceptions, 86, 87t hospital payment areas, 42, 46–49, 53 updates, 58 hospital wage index reclassifications, 86–87 wage data for defining, 48–51 to influence provider distribution, 29, 56–57, 117 See also Hospital payment areas; Payment areas; iterated approach, 56–57 Physician payment areas; Smoothing labor as labor market proxy, 46, 53, 85 market borders and payment areas origins of, 44b Land physician income variation within, 121–122 as factor of production in health care system, 37–38 physician payment areas, 55–56 See also Rent recommendations for labor market definition based Licensed practical nurses, 39–40, 130 on, 7–8, 57–58, 118 Long-term care hospitals, 79–81 rural floor adjustments, 87–88 Low-income communities separation of high-cost MSAs, 56 cost of providing health care services in, 121 See also Metropolitan statistical areas (MSAs) Read the entire page →
From page 204... ... 204 GEOGRAPHIC ADJUSTMENT IN MEDICARE PAYMENT O hospital wage index exceptions and reclassifications, 22 Occupational Employment Statistics for hospitals, construction of, 42–43 access to data, 77, 82 need for consistent criteria in geographic accuracy, 74–77 adjustment, 5, 32 administrative burden of using, 77 practice cost variation within, 27, 51, 117–118 employee compensation data, 130 recommendations for definition of, 7–8, 57–58, 118 for GPCI calculation, 124–125, 126–127t, 128 recommendations for smoothing borders of labor inputs and weighting, 78–79 markets and, 109–110 labor market smoothing with data from, 89 statewide consolidation, 45 limitations, 128 study goals, 2, 18b purpose, 74 wage data for defining, 48–51 recommendations for use of, 8, 10, 82 See also Hospital payment areas; Physician payment scope of survey, 74, 128 areas; Smoothing labor market borders and timeliness of data, 77 payment areas Occupational mix Physician Assistants, 148 in Bureau of Labor Statistics data, 78–79 Physician Compensation and Production Survey, 125, in calculation of occupational mix adjustment, 65–67 126–127t, 129 in employee compensation data sources, 130 Physician Cost Survey, 13 employment shares by geographic region and Physician Fee Schedules, 23–25 statistical areas, 79t basis for, 114 in hospitals, 21, 39–40 components, 113 physician payment area variations, 27–28, 39 in geographic adjustment system, 1–2, 15, 23–25 in physician practice, 131t recommendations for future update methodology, recommendations for calculation of hospital wage 10, 139 index, 9, 82–83 Physician payment areas recommendations for GPCI calculation, 12, 141–142 administrative costs to Centers for Medicare and required staffing levels, 78 Medicaid Services, 55–56, 58 similarities between needs of physician offices and alternative strategies for defining, 53–57 hospitals, 53–54, 54t construction of, 43–45 Occupational mix adjustment current concerns and criticisms, 27–28, 51, 57–58 average hourly wage computations, 73 current structure, 27, 27f, 43–45 hospital wage index calculations, 64–67, 81 in GPCI, 39b Occupational mix survey, 67, 70 hospital payment areas and, 7–8, 53–55, 57–58 Office of Management and Budget, 42 metropolitan statistical areas and, 55, 56–57, 56t Office visits, 118 number of, 55–56, 56t, 118 Omnibus Budget Reconciliation Act, 23, 115, 137 recommendations for, 7–8, 57–58 Omnibus Reconciliation Act, 86 role in distribution of providers, 56–57 Outmigration adjustment Physician Practice Information Survey, 119, 125, commuting pattern-based smoothing, 93–102 126–127t, 129 purpose, 22, 87 Physician work adjustment, 39b recommendations for smoothing, 9, 110 choices in level and scope of, 120–124 See also Commuting; Section 505 reclassifications cost-share weight calculations, 118–119, 119t current concerns and criticisms, 28 data sources for, 124–129, 140 P definition, 25, 114 non-geographic factors, 11 Patient Protection and Affordable Care Act, 19b, 22, office rent component, 13, 132–135, 136t, 141–142 88, 115 proxy professions, 10–11, 123–125, 139–140 Payment areas purpose, 120 conceptual framework, 6, 33, 38 recommendations for, 10–12, 139–140 creation of new, 45–46 statistical modeling, 11–12, 140 current concerns and criticisms, 2, 16 unique challenges in calculation of, 120 in current geographic adjustment system, 2, 7, 38 See also Geographic practice cost indexes (GPCIs) Read the entire page →
From page 205... ... 205 INDEX R Policy adjustments geographic adjustments to address provider Reclassification shortages, 29, 56–57, 117, 147 current IPPS hospitals, 24f hospital wage index adjustments, 62, 86 hospital labor market adjustments, 48, 86–87 Phase 2 study goals, 10, 17, 18, 33, 110, 147 smoothing of labor market borders and payment purpose, 6, 18, 110 areas to replace, 7, 10, 22, 110 study goals and, 113–114 strategies to minimize wage cliffs, 50b Population health, 2, 3b, 17 Recommendations Poverty among Medicare beneficiaries, 17 for Centers for Medicare and Medicaid Services, 8, Practice expenses 9, 10, 82, 83, 139–140, 141 adjustment goals, 129 for Congress, 8, 81–82 cost-share weight calculations, 10, 118–119, 119t, for determining nonclinical labor-related expenses, 139 13, 142 data sources, 4, 16, 31 for determining office rent costs, 13, 141–142 definition, 25, 114 for geographic practice index calculation, 7–8, 12, employee compensation component, 13, 130–132, 57–59, 141 142 for hospital wage index calculation, 7–9, 57–59, occupational mix, 2, 12, 130, 132, 141 81–83 office rent component, 13, 132–135, 142 implementation, 13–14, 19b, 145, 147–148 recommendations for GPCI calculations, 10, 12, 13, for labor market definition, 7–8, 57–58 139, 141, 142 research framework for, 2–3, 33–34 as share of GPCI, 129 for smoothing labor market borders and payment variation within payment areas, 27, 51 areas, 9–10, 109–110 See also Physician work adjustment; Professional for use of proxies for physician income calculations, liability insurance 10–11, 139–140 Primary Care Service Area, 52 Registered nurses Professional liability insurance, 7, 39b average wages, 54, 54t as component of Physician Fee Schedule, 113, 114 geographic variation in pay, 38 cost-share weight calculations, 10, 118–119, 119t, occupational mix calculation, 39–40, 130 139 required staffing levels, 78 coverage, 137 REIS, Inc., 13 definition, 25 Relative value units, 11 GPCI data collection and calculation, 137–138 accuracy, 118 perceived need, 137 definition and function, 114–115 premiums, 137 in GPCI calculations, 23, 25, 118 source of geographic variation, 137 importance of, in current payment system, 118 Prospective payment systems types of, 114 geographic adjustment in, 1–2, 15 Rent Medicare evolution, 38, 39 data sources, 132–135, 136t recommendations for hospital wage index as factor of production in health care system, 37–38 calculation, 9, 83 geographic variation in costs, 38 Provider shortages, 29, 56–57, 117, 147 recommendations for determining prices, 13, Proxy data, 4, 31, 141 141–142 MSA as labor market proxy, 46 Research on geographic adjustment for practice inputs, 117, 122, 123–124, 125 challenges, 146–147 recommendations for, 10–11, 12, 139–140 data needs on physician compensation, 122 in smoothing, 92, 107 data sources, 2, 4, 31 Phase 2 report, 2, 114, 118, 139, 145, 146, 147 Q scope of study, 2, 146 study framework, 2–3, 33–34 Quality of care study goals, 2, 3b, 18b, 29–30, 113–114 future research, 2, 17 underlying principles and assumptions for, 4–6, study goals, 2, 3b, 18b 31–33 Read the entire page →
From page 206... ... See Care transitions Section 508 reclassifications, 50b Transparency Self-employed physicians, 120 Bureau of Labor Statistics data, 77 Services sector, 13, 81 concerns about current geographic adjustment Short-term and acute care hospitals, 2, 18b system, 2, 16 Skilled nursing facilities of hospital cost report data, 72, 77, 82 hospital wage index calculations, 9, 79–81, 83 to improve data quality, 4, 31 study goals, 2, 18b of process for reviewing geographic adjustment Smoothing labor market borders and payment areas, 7 system, 6, 33 budget neutrality adjustments in, 89, 90b study goals, 2, 18b commuting pattern-based, 88, 93–102, 107–109 use of confidential data sources, 12, 82 comparison of current and alternative approaches to, 107–109, 108t U contiguous-county approach, 88, 89–93 design objectives, 88–89 U.S. Postal Service, 13 geospatial methods, 88, 102–109 implementation, 9 need for, 85 V outmigration adjustment for, 9, 22 policy adjustments and, 110 Value of care positive and negative adjustments, 89, 91b, 97–99, future research, 2, 17, 148 110 study goals, 2, 3b, 18b purpose, 9, 10, 22, 53, 85, 88 recommendations for, 9–10, 109–110 W to replace system of exceptions and reclassifications, 7, 10, 22, 109, 110 Wage cliffs techniques, 9, 88 commuting pattern-based smoothing adjustments, thresholds for county eligibility, 109–110 97 use of Bureau of Labor Statistics data for, 89 definition, 42 Smoothing of wage index values, 53 extent of problem, 47–48 Social Security Act, 23, 115 hospital wage index adjustments to reduce, 86, 88 recommendations for revision of hospital wage inverse distance weighting to smooth, 106, 106t index provisions, 8, 81–82 strategies for reducing, 50b Sole community hospital, 23f, 62 Wage comparability criteria, 86–87 Worksheet S-3, 62, 72, 73, 77, 82, 89 Read the entire page →

From page 199...

... Index [Page numbers followed by b, f, n, or t, refer to boxed Administrative staff of physician practice, 130 text, figures, footnotes, or tables, respectively.] Advanced practice nurses, 148 Affordable Health Care for America Act, 17, 29, 30 Agency for Healthcare Research and Quality, 21 A Ambulatory surgical centers, 9, 79–81, 83 American Community Survey Access to care access to data, 128 adjustments to address provider shortages, 29, commuting data, 94 56–57, 117, 147 employee compensation data, 132 hospital wage index policy adjustment add-ons to for GPCI calculation, 125, 126–127t, 128–129 improve, 62 limitations, 128–129 Phase 2 study goals, 147 physician work adjustment data, 11–12 research needs, 113–114 scope of, 128 Accountability American Housing Survey, 13 of data providers, 4 American Medical Association, 23, 118 integration of care and, 58 Average hourly wage Accountable Care Act, 58 accuracy, 72, 81 Accuracy of data health care practitioners, 54–55, 54t for creation of payment areas, 45–46 health care sectors, 54–55, 54t current system, 4, 31, 70–72 hospital wage index computations, 62–65, 81 definition, 4, 16n, 31 inputs and weighting, 73, 78–79 for hospital wage index calculation, 70 Occupational Employment Statistics for calculation Occupational Employment Statistics, 74–77 of, 74, 81 proxy data for physician income, 117, 124–125 relative value units, 118 strategies for improving, 4 B study goals, 2, 16–17, 18b, 29, 146 Accuracy of payments to facilities, 2, 15–16 Balanced Budget Act, 22, 87 Administrative burden of geographic adjustment Basic Allowance for Housing, 13 current hospital cost reporting and review, 73 Beneficiaries of Medicare labor market segmentation and, 55–56, 58 age distribution, 17 use of Bureau of Labor Statistics data and, 77, 82 current coverage, 1, 17 199

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From page 200...

... 200 GEOGRAPHIC ADJUSTMENT IN MEDICARE PAYMENT economic status, 17 shortcomings, 109 geographic distribution, 17 technical development, 89 health status, 17 Contract wages impact of geographic adjustment determinations, 2 in hospital wage index, 72, 75–76 nonelderly, 1, 17 as percent of hospital personnel expenses, 75–76 Benefits valuation Conversion factor, 115 in Bureau of Labor Statistics data, 75, 82 Core-based statistical areas, 44b, 85, 93–94 in hospital wage index, 71–72, 75, 82 Cost-share weights, 10, 25, 118–119, 139 Blum, Jonathan, 19b Cost Survey for Single Specialty Practices, 135 Braley, Bruce, 28b Critical access hospitals, 62 Budget neutrality adjustments, 29, 89, 90b Current Procedural Terminology, 23, 25, 114 GPCI, 115–117 Customary, prevailing, and reasonable, 118 Bureau of Labor Statistics, 12 health care sector data, recommendations for use D of, 8, 12, 58–59, 81–82, 141 labor market smoothing with data from, 89 Dartmouth Atlas Project, 30, 52 See also Occupational Employment Statistics Data sources access to, 12, 117, 128 commuting patterns, 94 C current concerns and criticisms, 4, 16, 31 Capital as factor of production in health care system, for geographic variation in physician income, 37–38, 81 121–122 Care transitions, 58 for GPCI cost-share weights, 119 Center for Studying Health System Change, 122 for input price determinations, 2, 4 Centers for Medicare and Medicaid Services on labor market conditions, 4–5, 32 administrative costs, 55–56, 58, 73, 77, 82 for labor market smoothing, 89 perception of geographic adjustment policy physician office rent, 13, 132–135, 136t, 141–142 recommendations and implementation, 19b physician salary, 11–12 recommendations for, 8, 9, 10, 12, 13, 82, 83, for physician work adjustment, 4, 124–129 139–140, 141 for practice expenses GPCI adjustments, 130, 132 use of statistical areas, 43–45, 44b professional liability insurance premiums, 137–138 See also Medicare proxies for physician income calculation, 10–11 Combined statistical areas, 44b quality of current hospital wage index data, 70–74 Commuting, 7 recommendations for CMS access to BLS data, 12, consideration of, in current adjustment and 141 classification system, 93–94 recommendations for GPCI construction, 8, 12–13, data sources, 94 58–59, 141–142 hospital wage index adjustments, 22, 86–87 recommendations for hospital wage index labor market smoothing based on, 88, 93–102, construction, 8, 58–59, 81–82 107–109 research framework, 2–3, 33–34 modeling techniques, 9 strategies for improving hospital data, 73–74 patterns, 95, 96t study goals, 2, 4, 16–17, 18b, 31, 147 recommendations for smoothing labor market See also Accuracy of data borders and payment areas, 9–10, 109–110 Department of Defense, 13 Section 505 adjustment for, 87 Department of Health and Human Services, 2, 8, 13, 16 significance of, in setting labor market boundaries, 42 E wage index smoothing, 53 Congress, U.S., 2, 16, 29–30 Employee compensation recommendations for, 8, 81–82 data sources, 130, 132 Contiguous-county smoothing geographic adjustment rationale, 1–2 implementation, 91b health sector-level wages, 130 results of simulations, 91–93, 92t, 93t occupational mix, 130

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From page 201...

... See also statistical areas, 79t specific components employee compensation in physician practices, 130, cost share weight calculations, 118–119, 119t 132 current concerns and criticisms, 2, 51, 115–117, Phase 2 study goals, 2, 147 124–125 quality of cost data, 4, 31 current structure and operations, 1, 15, 25, 114–117 study goals, 2, 3b, 17, 18b future of exceptions, 110 trends, 148 historical evolution, 116b See also Geographic practice cost indexes (GPCIs)

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From page 202...

... 202 GEOGRAPHIC ADJUSTMENT IN MEDICARE PAYMENT Health information technology, 148 purpose, 15, 38, 61 Health technicians, 130 quality of current data sources, 4, 5, 31, 32, 70–74, Healthcare Common Procedure Coding System, 23, 81 114 recommendations for data sources for construction Home health agencies of, 7, 8–9, 58–59, 81–82, 83 hospital wage index calculations, 9, 79–81, 83 recommendations for labor market and payment study goals, 2, 18b area definition, 7–8, 57–58, 118 Hospice facilities, 79–81 recommendations for occupational inputs, 9, 82 Hospital cost survey data, 7, 8 recommendations for revision of controlling statute, Hospital Outpatient Departments, 79–81 8, 81–82 Hospital payment areas recommendations for smoothing labor market alternative approaches to defining, 52–53 borders and payment areas, 9–10, 109–110 current structure, 42–43 rural floors, 87–88 metropolitan statistical areas and, 46–48 strategies for improving data for, 73–74 physician payment areas and, 7–8, 53–55, 57–58 strategies for improving geographic adjustment reclassification appeals, 48 system, 5–6, 32–33 Hospital referral regions, 52 study goals, 2, 3b, 18b Hospital service areas, 52 transparency of cost report data, 72 Hospital wage index types of labor market adjustments and exceptions, administrative burden of reporting and review, 73, 86, 87t 77 use of all-industry or health sector data in alternative approaches to defining labor markets for, calculation of, 4–5, 32, 39, 42, 48–50, 59, 52–53 70–71, 74–75, 75t, 76 benefits valuation in, 71–72, 75, 82 volatility, 50, 76 calculation from Occupational Employment wage data for defining, 48–51 Statistics, 74–79 See also Hospital payment areas case mix adjustment, 62 Housing costs, 41 circularity problem in data, 50–51, 71 comparative effects of adjustments in different I geographic areas, 62, 63t contract wages in, 72, 75–76 Index floors, 10 current data sources and calculation methodology, Indexes, defined, 1n, 15, 16b 1, 2, 4, 5, 7, 8, 18–21, 31, 32, 39b, 42–43, Inflation, 118–119 61–67, 81 Inpatient Prospective Payment System (IPPS) current geographic distribution, 22, 23f current methodology, 18–19 data needs for calculating, 70 current reclassifications and exceptions, 24f exceptions and reclassifications, 22, 86–88, 109, geographic adjustment in, 1–2, 15, 38–39 110 hospital wage index calculation, 61–62, 86 for facilities other than acute care hospitals, 9, number of hospitals by labor market, 71t 79–81, 83 Inpatient psychiatric facilities, 79–81 future of exceptions, 110 Inpatient rehabilitation facilities, 79–81 GPCI and, 5–6, 32–33 Input prices, health care historical evolution, 68–69b concerns about current geographic adjustment hospital-specific, 52–53 system determinations, 2 implementation of recommendations for, 13–14 geographic adjustment rationale, 1, 37 inputs and weighting, 9, 73, 78–79, 82–83 for GPCI calculations, 10 objectives for smoothing labor market borders, GPCI cost-share weights, 118–119 88–89 inflationary changes over time, 118–119 occupational mix in calculation of, 9, 21, 39–40, major factors of production, 37–38 78–79 price and cost distinctions in methodology for origins, 61 geographic adjustment, 19–21, 38–39, 51, 59 policy adjustment add-ons, 62 quality of data, 4, 31 pre-classified, pre-floor, 79, 80n, 86 recommendations for GPCI calculation, 12, 13, price and cost distinctions, 19–21, 61, 85 141–142

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From page 203...

... defined by geopolitical units, 52–53 in construction of hospital payment areas, 42 definition of, in geographic adjustment geographic distribution, 43f methodology, 2, 21, 38, 85 number of, 5, 7, 21, 32, 42–43, 43n, 46, 55, 56 determinants of wage differentials, 40–41 wage variation within, 53, 55 as factor of production in health care system, 37–38 See also MSA/statewide non-MSA system geographic variation in costs, 38, 40–41 Micropolitan statistical areas, 42 hospital wage index exceptions and reclassifications, definition and characteristics, 44b 22, 23f geographic distribution, 43f number of, 5, 32 MSAs. See Metropolitan statistical areas occupational mix in, 9, 12, 21, 27–28, 39–40 MSA/statewide non-MSA system quality of data, 4–5, 32 advantages, 58 recommendations for defining, 7–8, 57–58, 85, 118 commuting behavior considerations in, 93 recommendations for smoothing borders of distribution of employment shares by health care payment areas and, 109–110 occupation, 79t types of adjustments and exceptions, 86, 87t hospital payment areas, 42, 46–49, 53 updates, 58 hospital wage index reclassifications, 86–87 wage data for defining, 48–51 to influence provider distribution, 29, 56–57, 117 See also Hospital payment areas; Payment areas; iterated approach, 56–57 Physician payment areas; Smoothing labor as labor market proxy, 46, 53, 85 market borders and payment areas origins of, 44b Land physician income variation within, 121–122 as factor of production in health care system, 37–38 physician payment areas, 55–56 See also Rent recommendations for labor market definition based Licensed practical nurses, 39–40, 130 on, 7–8, 57–58, 118 Long-term care hospitals, 79–81 rural floor adjustments, 87–88 Low-income communities separation of high-cost MSAs, 56 cost of providing health care services in, 121 See also Metropolitan statistical areas (MSAs)

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From page 204...

... 204 GEOGRAPHIC ADJUSTMENT IN MEDICARE PAYMENT O hospital wage index exceptions and reclassifications, 22 Occupational Employment Statistics for hospitals, construction of, 42–43 access to data, 77, 82 need for consistent criteria in geographic accuracy, 74–77 adjustment, 5, 32 administrative burden of using, 77 practice cost variation within, 27, 51, 117–118 employee compensation data, 130 recommendations for definition of, 7–8, 57–58, 118 for GPCI calculation, 124–125, 126–127t, 128 recommendations for smoothing borders of labor inputs and weighting, 78–79 markets and, 109–110 labor market smoothing with data from, 89 statewide consolidation, 45 limitations, 128 study goals, 2, 18b purpose, 74 wage data for defining, 48–51 recommendations for use of, 8, 10, 82 See also Hospital payment areas; Physician payment scope of survey, 74, 128 areas; Smoothing labor market borders and timeliness of data, 77 payment areas Occupational mix Physician Assistants, 148 in Bureau of Labor Statistics data, 78–79 Physician Compensation and Production Survey, 125, in calculation of occupational mix adjustment, 65–67 126–127t, 129 in employee compensation data sources, 130 Physician Cost Survey, 13 employment shares by geographic region and Physician Fee Schedules, 23–25 statistical areas, 79t basis for, 114 in hospitals, 21, 39–40 components, 113 physician payment area variations, 27–28, 39 in geographic adjustment system, 1–2, 15, 23–25 in physician practice, 131t recommendations for future update methodology, recommendations for calculation of hospital wage 10, 139 index, 9, 82–83 Physician payment areas recommendations for GPCI calculation, 12, 141–142 administrative costs to Centers for Medicare and required staffing levels, 78 Medicaid Services, 55–56, 58 similarities between needs of physician offices and alternative strategies for defining, 53–57 hospitals, 53–54, 54t construction of, 43–45 Occupational mix adjustment current concerns and criticisms, 27–28, 51, 57–58 average hourly wage computations, 73 current structure, 27, 27f, 43–45 hospital wage index calculations, 64–67, 81 in GPCI, 39b Occupational mix survey, 67, 70 hospital payment areas and, 7–8, 53–55, 57–58 Office of Management and Budget, 42 metropolitan statistical areas and, 55, 56–57, 56t Office visits, 118 number of, 55–56, 56t, 118 Omnibus Budget Reconciliation Act, 23, 115, 137 recommendations for, 7–8, 57–58 Omnibus Reconciliation Act, 86 role in distribution of providers, 56–57 Outmigration adjustment Physician Practice Information Survey, 119, 125, commuting pattern-based smoothing, 93–102 126–127t, 129 purpose, 22, 87 Physician work adjustment, 39b recommendations for smoothing, 9, 110 choices in level and scope of, 120–124 See also Commuting; Section 505 reclassifications cost-share weight calculations, 118–119, 119t current concerns and criticisms, 28 data sources for, 124–129, 140 P definition, 25, 114 non-geographic factors, 11 Patient Protection and Affordable Care Act, 19b, 22, office rent component, 13, 132–135, 136t, 141–142 88, 115 proxy professions, 10–11, 123–125, 139–140 Payment areas purpose, 120 conceptual framework, 6, 33, 38 recommendations for, 10–12, 139–140 creation of new, 45–46 statistical modeling, 11–12, 140 current concerns and criticisms, 2, 16 unique challenges in calculation of, 120 in current geographic adjustment system, 2, 7, 38 See also Geographic practice cost indexes (GPCIs)

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From page 205...

... 205 INDEX R Policy adjustments geographic adjustments to address provider Reclassification shortages, 29, 56–57, 117, 147 current IPPS hospitals, 24f hospital wage index adjustments, 62, 86 hospital labor market adjustments, 48, 86–87 Phase 2 study goals, 10, 17, 18, 33, 110, 147 smoothing of labor market borders and payment purpose, 6, 18, 110 areas to replace, 7, 10, 22, 110 study goals and, 113–114 strategies to minimize wage cliffs, 50b Population health, 2, 3b, 17 Recommendations Poverty among Medicare beneficiaries, 17 for Centers for Medicare and Medicaid Services, 8, Practice expenses 9, 10, 82, 83, 139–140, 141 adjustment goals, 129 for Congress, 8, 81–82 cost-share weight calculations, 10, 118–119, 119t, for determining nonclinical labor-related expenses, 139 13, 142 data sources, 4, 16, 31 for determining office rent costs, 13, 141–142 definition, 25, 114 for geographic practice index calculation, 7–8, 12, employee compensation component, 13, 130–132, 57–59, 141 142 for hospital wage index calculation, 7–9, 57–59, occupational mix, 2, 12, 130, 132, 141 81–83 office rent component, 13, 132–135, 142 implementation, 13–14, 19b, 145, 147–148 recommendations for GPCI calculations, 10, 12, 13, for labor market definition, 7–8, 57–58 139, 141, 142 research framework for, 2–3, 33–34 as share of GPCI, 129 for smoothing labor market borders and payment variation within payment areas, 27, 51 areas, 9–10, 109–110 See also Physician work adjustment; Professional for use of proxies for physician income calculations, liability insurance 10–11, 139–140 Primary Care Service Area, 52 Registered nurses Professional liability insurance, 7, 39b average wages, 54, 54t as component of Physician Fee Schedule, 113, 114 geographic variation in pay, 38 cost-share weight calculations, 10, 118–119, 119t, occupational mix calculation, 39–40, 130 139 required staffing levels, 78 coverage, 137 REIS, Inc., 13 definition, 25 Relative value units, 11 GPCI data collection and calculation, 137–138 accuracy, 118 perceived need, 137 definition and function, 114–115 premiums, 137 in GPCI calculations, 23, 25, 118 source of geographic variation, 137 importance of, in current payment system, 118 Prospective payment systems types of, 114 geographic adjustment in, 1–2, 15 Rent Medicare evolution, 38, 39 data sources, 132–135, 136t recommendations for hospital wage index as factor of production in health care system, 37–38 calculation, 9, 83 geographic variation in costs, 38 Provider shortages, 29, 56–57, 117, 147 recommendations for determining prices, 13, Proxy data, 4, 31, 141 141–142 MSA as labor market proxy, 46 Research on geographic adjustment for practice inputs, 117, 122, 123–124, 125 challenges, 146–147 recommendations for, 10–11, 12, 139–140 data needs on physician compensation, 122 in smoothing, 92, 107 data sources, 2, 4, 31 Phase 2 report, 2, 114, 118, 139, 145, 146, 147 Q scope of study, 2, 146 study framework, 2–3, 33–34 Quality of care study goals, 2, 3b, 18b, 29–30, 113–114 future research, 2, 17 underlying principles and assumptions for, 4–6, study goals, 2, 3b, 18b 31–33

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From page 206...

... See Care transitions Section 508 reclassifications, 50b Transparency Self-employed physicians, 120 Bureau of Labor Statistics data, 77 Services sector, 13, 81 concerns about current geographic adjustment Short-term and acute care hospitals, 2, 18b system, 2, 16 Skilled nursing facilities of hospital cost report data, 72, 77, 82 hospital wage index calculations, 9, 79–81, 83 to improve data quality, 4, 31 study goals, 2, 18b of process for reviewing geographic adjustment Smoothing labor market borders and payment areas, 7 system, 6, 33 budget neutrality adjustments in, 89, 90b study goals, 2, 18b commuting pattern-based, 88, 93–102, 107–109 use of confidential data sources, 12, 82 comparison of current and alternative approaches to, 107–109, 108t U contiguous-county approach, 88, 89–93 design objectives, 88–89 U.S. Postal Service, 13 geospatial methods, 88, 102–109 implementation, 9 need for, 85 V outmigration adjustment for, 9, 22 policy adjustments and, 110 Value of care positive and negative adjustments, 89, 91b, 97–99, future research, 2, 17, 148 110 study goals, 2, 3b, 18b purpose, 9, 10, 22, 53, 85, 88 recommendations for, 9–10, 109–110 W to replace system of exceptions and reclassifications, 7, 10, 22, 109, 110 Wage cliffs techniques, 9, 88 commuting pattern-based smoothing adjustments, thresholds for county eligibility, 109–110 97 use of Bureau of Labor Statistics data for, 89 definition, 42 Smoothing of wage index values, 53 extent of problem, 47–48 Social Security Act, 23, 115 hospital wage index adjustments to reduce, 86, 88 recommendations for revision of hospital wage inverse distance weighting to smooth, 106, 106t index provisions, 8, 81–82 strategies for reducing, 50b Sole community hospital, 23f, 62 Wage comparability criteria, 86–87 Worksheet S-3, 62, 72, 73, 77, 82, 89

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Index Pages 199-206

Index
Pages 199-206