Policy Options for Addressing Medicare Payment Differentials Across Ambulatory Settings
Under Medicare, many health care services can be provided in a range of ambulatory settings, and improvements in technology and delivery mean that many services no longer require an inpatient hospital stay. Medicare's payment for physician work and malpractice liability expenses is the same regardless of where a service is provided. However, payment differentials exist between settings for the facility-related components of care, such as nursing and other staff salaries, equipment, buildings, and supplies. A three-phase RAND study examined the available data on various procedure costs and payment differentials and the bundling or packaging of services offered to Medicare beneficiaries in physician offices, ambulatory surgical centers, and hospital outpatient departments. Building on exploratory analyses conducted in the first two phases of the study, this report documents findings from the third phase, which sought to identify options for modifying Medicare payment policies to improve the value of services and address the differential in the amount that Medicare pays for similar facility-related services in various settings. The findings confirm that payments tend to be highest for services provided in hospitals, but they also indicate that payment differentials generally exceed cost differentials and vary by procedure. The proposed policy options offer solutions to standardize these differentials and potentially reduce Medicare spending.
- Copyright: RAND Corporation
- Availability: Web-Only
- Pages: 128
- Document Number: TR-979-ASPE
- Year: 2011
- Series: Technical Reports
Policies to Increase Uniformity in Payment Units and Differentials
Policies That Address Payment Differentials
Other Policies to Increase the Value of Medicare Services
Options Related to Broader Payment Reform
Summary and Discussion
Phase II Key Study Findings
Additional Phase III Findings
The research described in this report was sponsored by the Assistant Secretary of Planning and Evaluation in the U.S. Department of Health and Human Services and was conducted in RAND Health, a division of the RAND Corporation.
This report is part of the RAND Corporation technical report series. RAND technical reports may include research findings on a specific topic that is limited in scope or intended for a narrow audience; present discussions of the methodology employed in research; provide literature reviews, survey instruments, modeling exercises, guidelines for practitioners and research professionals, and supporting documentation; or deliver preliminary findings. All RAND reports undergo rigorous peer review to ensure that they meet high standards for research quality and objectivity.
Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.