A report by the Institute of Medicine suggests a need for a new method of calculating geographic adjustments to Medicare payments, according to an IOM news release.
The authors found nearly 40 percent of hospitals have been granted exceptions to how their adjustments are calculated. The report concludes that while geographic adjustments to Medicare payments are necessary, the data sources and methods used to determine the adjustments are currently inadequate.
The report suggests basing wage adjustment calculations on the Bureau of Labor Statistics, a more accurate, independent and appropriate source, instead of hospital cost reports, physician surveys, census data and other information currently used.
Other recommendations by the report include:
- Taking into account median wage data for all types of workers in private practice settings and hospitals to calculate regional wage differences instead of using data for registered nurses, licensed practical nurses, health technicians and administrative staff only.
- Using the metropolitan statistical areas to adjust for the labor market in which a hospital or practitioner operates instead of using one set of 441 markets for hospital payments and a different set of 89 markets for practitioner adjustments.
- Studying commercial rent information to assess variations in the price of office space instead of relying on information on median subsidized rents for a two-bedroom apartment. A new source of commercial rent data should also be developed.
The IOM plans to release two additional reports on adjustments to Medicare payments, with a final report scheduled to be released in 2012.
Read the IOM release on geographic adjustments to Medicare payments.
Read excerpts from the IOM report here.
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The authors found nearly 40 percent of hospitals have been granted exceptions to how their adjustments are calculated. The report concludes that while geographic adjustments to Medicare payments are necessary, the data sources and methods used to determine the adjustments are currently inadequate.
The report suggests basing wage adjustment calculations on the Bureau of Labor Statistics, a more accurate, independent and appropriate source, instead of hospital cost reports, physician surveys, census data and other information currently used.
Other recommendations by the report include:
- Taking into account median wage data for all types of workers in private practice settings and hospitals to calculate regional wage differences instead of using data for registered nurses, licensed practical nurses, health technicians and administrative staff only.
- Using the metropolitan statistical areas to adjust for the labor market in which a hospital or practitioner operates instead of using one set of 441 markets for hospital payments and a different set of 89 markets for practitioner adjustments.
- Studying commercial rent information to assess variations in the price of office space instead of relying on information on median subsidized rents for a two-bedroom apartment. A new source of commercial rent data should also be developed.
The IOM plans to release two additional reports on adjustments to Medicare payments, with a final report scheduled to be released in 2012.
Read the IOM release on geographic adjustments to Medicare payments.
Read excerpts from the IOM report here.
Related Articles on Medicare Payments:
First Medicare Payments to Be Paid Out to Meaningful EHR Users
Fraud Charge Can Lead to Suspension of Medicare Payments
Key Senator Wants Stepped-up Monitoring of Improper Payments