Changing the method for how The Centers for Medicare & Medicaid Services adjusts payments to reflect regional variations in the cost of care as recommended by the Institute of Medicine (IOM) can help ensure payment accuracy, but would do little to tackle the broader issues of access to care and care quality.
The report "Geographic Adjustment in Medicare Payment Phase II: Implications for Access, Quality, and Efficiency" is the result of ongoing work the IOM has been conducting at the request of the Department of Health and Human Services to recommend corrections of inaccuracies and inequities in geographic adjustments to Medicare payments. In it, the IOM researchers ran simulations on recommendations it made in its Phase I report on how to adjust the current payment methodology.
"The exercise of applying the recommendations from our Phase I report confirmed that using the data sources and methods we proposed would improve the accuracy of Medicare payments," said committee chair Frank Sloan, J. Alexander McMahon Professor of Health Policy and Management and professor of economics, Duke University, in a press release. "Payment accuracy is important, but geographic adjustments are not the optimal way to achieve larger goals, such as ensuring access to clinicians or reducing disparities in care. Such objectives should be addressed through other means."
The study concluded that adopting the IOM's recommendations would mean that 88 percent of hospital billings and 96 percent of doctor billings would change, on average by less than 5 percent – either higher or lower. While these variations are relatively small, the IOM committee acknowledged that even these variations could have a significant impact on providers who are working to provide high-quality care.
The report also notes that there is an accepted perception that geographic payment rate variations could affect where healthcare providers choose to practice, which in turn could lead to variations in the availability and quality of care in some regions.
"From a broader perspective, however, geographic adjustments now are - and in the future will remain - a relatively small part of the Medicare payment system and only should be used to improve payment accuracy," the report noted. "Further, the committee concludes that geographic adjustment of Medicare payments is not an appropriate approach for achieving such national policy goals as changing the composition and distribution of healthcare providers."
One approach recommended by the IOM to improve access to healthcare for Medicare beneficiaries in under-served areas is to widen the use of telehealth services.
"More than half of all Medicare beneficiaries have chronic medical conditions, such as diabetes, arthritis and kidney disease, for which regular monitoring is becoming part of the standard of care," the committee noted. "An increasing body of evidence shows that telehealth management of such beneficiaries can reduce preventable rehospitalizations and minimize access barriers due to geographic distance, patient disability, lack of transportation, or shortages of practitioners in rural and medically underserved urban areas."
Other recommendations from IOM on how CMS and federal agencies can improve healthcare include:
- Developing and applying Medicare policies that promote access to primary care services in geographic areas where Medicare beneficiaries experience persistent access problems.
- Promoting access to appropriate and efficient primary care services by supporting policies that would allow all qualified practitioners to practice to the full extent of their educational preparation.
- Re-examining policies that provide location-based adjustments for specific groups of hospitals and modifying or discontinuing them based on their effectiveness in ensuring adequate access to appropriate care.
- Funding an independent ongoing entity, such as the National Health Care Workforce Commission, to support data collection, research, evaluations, strategy development and make actionable recommendations about workforce distribution, supply and scope of practice.
- Supporting the facilitation of independent external evaluations of ongoing workforce programs intended to provide access to adequate health services for underserved populations and Medicare beneficiaries. These programs include the National Health Service Corps, Title VII and VIII programs under the Public Health Service Act, and related programs intended to achieve those goals.