Experiments in a community mental health center: increasing client payments for outpatient services.
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Although public health care systems often depend on revenue generated from client payment for services, inadequate agency fee payment systems continue to create substantial administrative problems. The first study examined the effects of implementing a system for producing and maintaining routine client fee payment. The second study was a replication of the first study. The Credit Criterion System was designed to: (a) allow clients to establish intra-agency credit by paying cash for each of the first three visits; and (b) pay for services monthly after credit was established. The system resulted in a baseline collection rate of 20%, compared with the Credit Criterion rate of 96.6%. The Credit Criterion System did not create additional administrative costs and it had no effect on attendance. Thus, the Credit Criterion System appears to be a reasonable set of procedures for allowing clients to meet their financial obligations to an agency. (+info)
Use of the resource-based relative value scale for private insurers.
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Medicare's resource-based relative value scale (RBRVS) was implemented 1 January 1992 for physician payment using a conversion factor of $31 for each relative value unit (RVU). We calculated a conversion factor of $42.24 for The Travelers Insurance Company's group health plan business using the RBRVS methodology and the calendar year 1990 Travelers Large Case Norms Extract of active employees. This DataWatch describes two important applications of the relative value scale for private insurers: for pricing and for analyzing claims expenditures. (+info)
Medicaid physician payment reform: using the Medicare Fee Schedule for Medicaid payments.
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OBJECTIVES: The purpose of this article is to provide estimates of the costs of basing Medicaid physician payment levels on the new resource-based Medicare Fee Schedule. Two possible policy options are considered: setting all Medicaid physician fees at the Medicare Fee Schedule level and setting only office visit fees at the new Medicare levels. METHODS: Data on Medicaid physician fees, use patterns, and the Medicare Fee Schedule are used to develop state-level estimates of expenditure changes under each option. RESULTS: Setting Medicaid rates at the Medicare Fee Schedule level could increase expenditures by $3.2 to $4.1 billion nationally; the other option would result in substantially lower increases in expenditures. Because of the current variations in Medicaid physician fees and in the breadth of eligibility across states, the cost of adopting the Medicare Fee Schedule varies considerably among states. CONCLUSIONS: Adopting the new Medicare Fee Schedule for Medicaid payments, proposed by policy-makers as a way to increase access to appropriate medical care, could double physician expenditures in some states. Adoption of more limited versions of the fee schedule might achieve some access gains at lower costs. (+info)
Reimbursement of tumor marker tests.
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The diffusion of new technology is significantly affected by coverage and reimbursement decisions. A variety of agencies (public and private) make decisions as to which technologies or treatments will be covered and what the levels of reimbursement will be. Recently, these agencies' coverage decisions have tended to be strongly affected by whether a technology is cost raising or cost reducing. Historically, a common effect of medical innovation has been improved quality of health care but with a corresponding increase in cost of delivery. The Medicare program has significant influence on the coverage policies of public and private third-party payers. This influence is especially visible in coverage and reimbursement decisions for cancer-related diagnostic procedures and systems. Coverage for these procedures and systems is not widespread because payers have not been convinced of the clinical usefulness of the assays. The industry must take the responsibility of working through the issues surrounding coverage and reimbursement of cancer-related diagnostic procedures with the payers. The ability to successfully negotiate payment for assays requires knowledge of Medicare coverage policies and a grasp of the reimbursement system. (+info)
Physician incomes under an all-payer fee schedule.
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This DataWatch estimates physicians' net incomes under various scenarios for universal adoption of the Medicare fee schedule. American Medical Association (AMA) data on physicians' gross incomes by payer are adjusted for differences in fees across Medicare, Medicaid, and private payers. Net income (gross income net of practice costs) is shown under several alternatives. Average net incomes would range from roughly $100,000 to $200,000, depending on specialty and the particular assumptions used. General practitioners' incomes would typically rise, and income differences across specialties would be narrowed significantly. The Medicare fee schedule, as intended, would increase incomes of primary care physicians relative to specialists. (+info)
Medicare patients' use of overpriced procedures before and after the Omnibus Budget Reconciliation Act of 1987.
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OBJECTIVES: Under the Omnibus Budget Reconciliation Act of 1987, Medicare reduced physician fees for 12 procedures identified as overprices. This paper describes trends in the use of these procedures and other physician services by Medicare patients during the 4-year period surrounding the implementation of the 1987 budget act. METHODS: Medicare physician claims files were used to develop trends in physician-services use from 1986 to 1989. Services were grouped into four categories: overpriced procedures, other surgery, medical care, and ancillary tests. RESULTS: Growth in the volume of overpriced procedures slowed substantially after the 1987 budget act was implemented. Moreover, the reduction in the rate of volume growth for these procedures differed little among specialities or areas. In comparison, the rate of volume growth fell modestly for other surgery, was unchanged for medical care, and increased for ancillary tests. CONCLUSIONS: Increases do not necessarily occur in the volume of surgical procedures whose Medicare fees are reduced. Although the conclusions that may be drawn from a descriptive analysis are limited, these findings suggest that concerns that the resource-based Medicare fee schedule will lead to higher surgery rates may be unwarranted. (+info)
Assessing the implementation of physician-payment reform.
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BACKGROUND: The Medicare program fundamentally changed its system of payment for physicians' services in 1992. Controversy over the new Medicare fee schedule has focused on three issues: the adequacy of the conversion factor used to translate resource-based relative-value units into fees; the ability of the new payment system to capture differences in work between surgeons and physicians in other specialties; and the allocation of practice expenses across services. METHODS: Using a standard service in each specialty, we developed simulation methods to assess the implementation of physician-payment reform. With these methods we calculated the potential net income for each specialty, as generated by different payment scenarios, including the Medicare fee schedule. RESULTS: We found that Medicare's current monetary-conversion factor yields an unreasonably low level of income for most specialties. Furthermore, the Medicare fee schedule misallocates practice expenses; invasive services are reimbursed for more than actual expenses, and medical services are reimbursed for less. Thus, physicians continue to be paid more generously for invasive services. Finally, the Medicare fee schedule does recognize the wide differences in the intensity of work performed by physicians in various specialties. CONCLUSIONS: The misallocation of practice expenses in the Medicare fee schedule results in serious underpayment for medical services. We think it likely that physicians compensate by performing more lucrative services, such as diagnostic tests. Even if legislation is passed to deal with the misallocation of expenses, the current conversion factor still produces unreasonably low levels of payment overall, which could dissuade those considering a career in medicine from entering the field. Finally, the simulation method we developed can be used as a tool for fee negotiations. (+info)
Impact of Medicare payment reductions on access to surgical services.
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OBJECTIVE: This study evaluates the impact of surgical fee reductions under Medicare on the utilization of surgical services. DATA SOURCES: Medicare physician claims data were obtained from 11 states for a five-year time period (1985-1989). STUDY DESIGN: Under OBRA-87, Medicare reduced payments for 11 surgical procedures. A fixed effects regression method was used to determine the impact of these payment reductions on access to care for potentially vulnerable Medicare beneficiaries: joint Medicaid-eligibles, blacks, and the very old. DATA COLLECTION/EXTRACTION METHODS: Medicare claims and enrollment data were used to construct a cross-section time-series of population-based surgical rates from 1985 through 1989. PRINCIPAL FINDINGS: Reductions in surgical fees led to small but significant increases in use for three procedures, small decreases in use for two procedures, and no impact on the remaining six procedures. There was little evidence that access to surgery was impaired for potentially vulnerable enrollees; in fact, declining fees often led to greater rates of increases for some subgroups. CONCLUSIONS: Our results suggest that volume responses by surgeons to payment changes under the Medicare Fee Schedule may be smaller than HCFA's original estimates. Nevertheless, both access and quality of care should continue to be closely monitored. (+info)