Table Of Content

2001ReporttoCongresson MonitoringtheImpactofMedicarePhysicianPayment ReformonUtilizationandAccess TommyG.Thompson Secretary DepartmentofHealthandHumanServices 2001 TableofContents ExecutiveSummary Introduction PreviousReports The2001Report • cQhuaesntgieosnan1t:iDcoipeastetdhewiMtehdirecgaarredFteoeshSicfhtsedouflMeecdoinctairneuepatoymiennvtoskeftrhoemkpirnodcsedoufrpaalyment servicestowardevaluationandmanagementservices? Question2:Havetherebeenreductionsinaccesstophysicians'servicessince theintroductionoftheMedicareFeeSchedule? Question3:Haspaymentreformexacerbatedracialdifferencesinaccessto servicesthatwerereportedinearlieranalyses? Question4:AretheimpactsoftheMFSonphysicians'practicessimilarto earlierimpactsdetected? Conclusions References AppendixA ToC-1 Tables: Table1. MScehdeidcualreebAyllMoawjeodrCThyapregeosfSfoerrvPihcyesiCcaitaengso'ryS:er1vi9c9e0s-1P9a9i9dUndertheMedicareFee Table2. MedicarePerCapitaAllowedChargesforPhysicians'ServicesPaidUnderthe MedicareFeeSchedulebyMajorTypeofServiceCategory:1990-1999 Table3. MedicarePhysicians'servicesPaidUndertheMedicareFeeSchedule:Numberof VisitsandConsultationsper1,000AgedMedicareBeneficiaries:1990-1999 Table4. MedicarePhysicians'ServicesPaidUndertheMedicareFeeSchedule:Numberof Proceduresper1,000AgedMedicareBeneficiaries:1990-1999 Table5. MedicarePhysicians'ServicesPaidUndertheMedicareFeeSchedule:Numberof ImagingServicesper1,000AgedMedicareBeneficiaries:1990-1999 Table6. MedicarePhysicians'ServicesPaidUndertheMedicareFeeSchedule:Ratioof African-AmericantoWhiteVisitandConsultationUseRatesper1,000Aged MedicareBeneficiaries:1990-1999 Table7. MedicarePhysicians'ServicesPaidUndertheMedicareFeeSchedule:Ratioof African-AmericantoWhiteProcedureUseRatesper1,000AgedMedicare Beneficiaries:1990-1999 Table8. MedicarePhysicians'ServicesPaidUndertheMedicareFeeSchedule:Ratioof African-AmericantoWhiteImagingServicesUseRatesper1,000AgedMedicare Beneficiaries:1990-1999 Table9. MeasuresofAccesstoCareforAfrican-AmericanandWhiteMedicareBeneficiaries. DatafromtheMedicareCurrentBeneficiarySurvey:1991through1998 Table10. UsualSourceofCareforAfrican-AmericanandWhiteMedicareBeneficiaries. Data fromtheMedicareCurrentBeneficiarySurvey:1991through1998 Table11 HAofsrpiictaanl-iAzmaetrioincaanndanModrWtahliitteyARgateedsMfeordiScealreectBeedneHfeiacritaraineds:Va1s9c9u0laarndPr1o9c9e8duresfor Table12 HospitalizationandMortalityRatesforSelectedOrthopedicandBackProceduresfor African-AmericanandWhiteAgedMedicareBeneficiaries:1990and1998 Table13 HospitalizationandMortalityRatesforSelectedProceduresforAfrican-American andWhiteAgedMedicareBeneficiaries:1990and1998 ToC-2 Table14 HospitalizationandMortalityRatesforSelectedProceduresforAfrican-American andWhiteAgedMedicareBeneficiaries:1990and1998 Table15 PhysiciansBillingforMedicareServices,AverageCaseload,PaymentsperPhysician, PhysiciantoPopulationRatio,andTotalMedicarePayments,1995-1999:All Physicians Table16 PhysiciansBillingforMedicareServices,AverageCaseload,PaymentsperPhysician, PhysiciantoPopulationRatio,andTotalMedicarePayments,1995-1999:Primary CarePhysicians Table17 PhysiciansBillingforMedicareServices,AverageCaseload,PaymentsperPhysician, PhysiciantoPopulationRatio,andTotalMedicarePayments,1995-1999:Surgical Specialties Table18 PhysiciansBillingforMedicareServices,AverageCaseload,PaymentsperPhysician, PhysiciantoPopulationRatio,andTotalMedicarePayments,1995-1999:Medical Specialties ToC-3 EXECUTIVESUMMARY BACKGROUND This2001reporttoCongresson"MonitoringTheImpactofMedicarePhysicianPayment ReformonUtilizationandAccess"istheSecretary'sseventhannualreportsubmittedto CongressinresponsetorequirementsofPublicLaw101-239,theOmnibusBudget ReconciliationActof1989(OBRA'89). OBRA'89requiredtheSecretarytomonitor andreportannuallytheimpactofchangesinMedicarephysicianpaymentonutilization andaccesstocare. This2001reportisthelastreporttoCongressonthistopicin accordancewiththeFederalReportsEliminationandSunsetActof1995(P.L.104-66, Section3003). OBRA'89introducedsignificantchangesinMedicarephysicianpayment policy. Theintentofthechangeswastoprovidemorerationalandequitablepaymentfor physicians'servicesprovidedundertheMedicareprogram. THE2001REPORT KeyfindingsfrompastreportsindicatedthatintroductionoftheMedicareFeeSchedule (MFS)producedthekindsofshiftsinpaymentsthatwereanticipated. Inparticular,there wasarelativeincreaseinallowedchargesforvisitsandconsultationsandarelative decreaseinallowedchargesforprocedure-basedservices. Thepreviousreportsalso showedthatmanyvulnerablegroupsfacebarrierstocare. Whilethedifferencesamongvulnerablegroupsareacauseforconcern,pastreports showedthattheintroductionofthenewpaymentsystemforphysiciansproducednonew barrierstocareforthevulnerablepopulationsstudied. PreviousworkbytheHealthCare FinancingAdministrationandthePhysicianPaymentReviewCommissionhas establishedthatthenewpaymentsystemdidnotexacerbateexistingbarriers. The Secretary's2001reportfocusesonupdatingthetrendsinphysicianaccessshownin previousreportsanddescribesongoingeffortsbytheDepartmenttoreducedisparitiesin healthcare. This2001reportupdatesthreeofthebasicstudiesincludedinprevious reportsandaddsanewanalysisbasedonsurveysofMedicarebeneficiaries. FOURMAJORPOLICYISSUESADDRESSED • DoestheMFScontinuetoinvokethekindsofpaymentchangesanticipatedwith regardtoshiftsofMedicarepaymentsfromproceduralservicestowardevaluation andmanagementservices? • Havetherebeenreductionsinaccesstophysicians'servicessincetheintroduction oftheMFS? • Haspaymentreformexacerbatedexistingracialdifferencesinaccesstoservices? ES-1 • ArethereimpactsoftheMFSonphysicians'practices? HIGHLIGHTS • Theshiftinpaymentsdescribedinpreviousreports,fromproceduralservices towardevaluationandmanagementservices,wassustainedthrough1998andfor preliminaryestimatesfor1999. Priortophysicianpaymentreform,procedures includedunderthefeescheduleaccountedfor46percentofallowedcharges,and visitsandconsultsaccountedfor40percent. Thispatternwasreversedduring 1992,thefirstyearofphysicianpaymentreform. Datafrom1998andpreliminary 1999datashowthatvisitsandconsultscontinuetoaccountforanincreasingly largershareofallowedcharges(51percentofallowedcharges)thanprocedures (36percentofallowedcharges). • TotalMedicareallowedchargesforphysicians'servicesundertheMFSincreased byonly2.8percentduringtheperiod1995through1998,from$41.1billionto $42.2billion. Thislowrateofgrowthwasduemostlytoadecreasingnumberof Medicarebeneficiariesreceivingservicesinthefee-for-servicearea. Forthose beneficiariesreceivingcareinthefee-for-servicesector,percapitaallowed chargesforMFSphysicians'servicesincreasedby9.4percentduringtheseyears, from$1,292to$1,413. • Useofmosttypesofphysicians'serviceshaveincreasedsincetheintroductionof theMFS. Totalphysicianvisitsandconsultationshaveincreasedfrom12.2visits perpersonin1992to13.4visitsperpersonin1998. Physicianvisitsintheoffice setting,usuallyconsideredtheprincipalsiteforaccesstohealthcare,increased from5.4visitsperpersonin1992to6.5visitsperpersonin1998. Therewere alsoincreasesintheuseofanumberofproceduralandimagingcategoriesas well. Percapitauseratesincreasedbetween1992and1998by11percentfor coronaryarterybypassgrafts(CABG),80percentforpercutaneoustransluminal coronaryangioplasty(PTCA),22percentforcataractremovalwithlensimplant, 44percentforcomputedaxialtomographyscans,andby117percentformagnetic resonantimagingservices. Servicesforwhichthereweresignificantreductionsin userates,suchastransurethralprostatectomy,weremorelikelyduetochanging medicalpracticeunrelatedtopaymentpolicy. • WhiletheupdatedstudiescontinuetoshowthatAfrican-AmericanMedicare beneficiariesfacebarrierstocare,theaccessdifferentialshavenotworsenedandin somecasesappeartohaveimprovedslightly. Forexample,thereissomeevidenceto suggestthatAfrican-Americanbeneficiariesareexperiencingimprovedaccessto referral-sensitiveprocedures. Therateofcardiacrevascularizationprocedures (CABGandPTCA)isincreasingmorerapidlyamongAfrican-Americanbeneficiaries thanamongwhitebeneficiaries. Thishasresultedinanarrowingofthedifference ES-2 betweenwhiteandAfrican-AmericanMedicarebeneficiaries. Inaddition,disparities inthe30-daypost-admissiondeathrate,reflectingtosomeextentdifferencesinhealth statusatthetimeoftheprocedure,arediminishing. Forexample,in1998the30-day post-admissiondeathratesfollowingCABGwerenearlyequalforAfrican-American andwhitebeneficiaries,whileAfrican-Americanbeneficiarieshavelowermortality ratesthandowhitebeneficiariesfollowingPTCA. Asdiscussedabove,physicianofficevisitratesincreasedbetween1992and1998. However,theratesincreasedfasterforwhitebeneficiariesthanforAfrican-American beneficiaries. Asaresult,in1998African-AmericanMedicarebeneficiarieshad 19percentfeweroffice-basedphysicianvisitsthanwhitebeneficiaries,comparedtoa 14percentdifferentialin1992. Thisisoneofthefewareasinwhichtheracial differentialwasincreasing. Inaddition,African-Americanbeneficiarieshad39 percentmoreemergencyroomvisitsin1998thandidwhitebeneficiaries. Whilethe officevisitrateforAfrican-Americanswaslowerthanwhitesandtheemergency roomvisitratewashigher,thiswaspartiallymitigatedbythehigherrateof consultationsforAfrican-Americanbeneficiariesascomparedtowhitebeneficiaries. Moreover,othermeasuresofaccesstoprimarycare,basedondatafromtheMedicare CurrentBeneficiarySurvey,suggestthatbothwhiteandAfrican-American beneficiariesreportimprovedaccesstocare. IndicatorsforthenumberofphysiciansprovidingservicesundertheMFS,aswellas thenumberofuniqueMedicarepatientsseenbyaphysician(i.e..Medicarecaseload) andallowedcharges,continuetosuggestthataccesstophysicians'serviceshasnot deterioratedfollowingtheintroductionoftheMFS. Physiciansupplyincreasedby 3.8percentbetween1995and1998. However,duetodecreasingMedicare enrollmentinfee-for-service,thephysiciantoMedicarepopulationratioincreasedby over1 percentduringthistime. ES-3 INTRODUCTION ThisreporttoCongressfortheyear2001istheSecretary'sseventhannualreportsubmittedto CongressinresponsetorequirementsofPublicLaw101-239,theOmnibusBudget ReconciliationActof1989(OBRA'89). OBRA'89requiredtheSecretarytomonitorandreport annuallytheimpactofchangesinMedicarephysicianpaymentonutilizationandaccesstocare. ThisreportisthelastreporttoCongressonthistopicinaccordancewiththeFederalReports EliminationandSunsetActof1995(P.L.104-66,Section3003). OBRA'89introducedsignificantchangesinMedicarephysicianpaymentpolicy. Thethree majorcomponentsofthelawwere:(1)theintroductionofaMedicareFeeSchedule(MFS), whichwasimplementedbeginningJanuary1,1992,underatransitionperiodendingin1996;(2) theestablishmentoflimitsonphysicians'chargesexceedingthefeescheduleamount;and(3)the institutionoftargetratesofgrowthinexpendituresforphysicians'services. Theintentofthese changeswastoprovidemorerationalandequitablepaymentforphysicians'servicesprovided undertheMedicareprogram.1 Therehavebeenanumberofchangesinpaymentpolicyinrecent yearsaswell. Thefinalruleconcerningrevisionstopaymentpoliciesunderthephysicianfee scheduleforcalendaryear2000includeanumberofrevisionssuchasimplementationof resource-basedmalpracticeexpenserelativevalueunits(RVUs)andrefinementof resource-basedpracticeexpenses. PREVIOUSREPORTS TheHealthCareFinancingAdministration(HCFA)hastakenabroadandvariedapproachto monitoringaccesstocare. Previousreports(the1994,1995,and1996reportstoCongress) summarizedtheresultsofseveralstudies,whichprimarilyusedtheMedicarePartBmonitoring system,PartAdata,andtwonationalsurveys. Themulti-prongedapproachtomonitoringaccess tocarehasallowedHCFAtoexamineaccessfromvariousperspectives. 1 Asdescribedinpreviousreports,paymentreformispartofacontinuum. Beforethe OBRA'89reformswereinstituted,anumberofsignificantchangeswereinitiatedinphysician paymentpolicythataffected,andwillcontinuetoaffect,utilizationandaccess. Theseinclude theimplementationin1975oftheMedicareEconomicIndexasalimitonincreasesinprevailing charges;theinitiationin1984oftheparticipatingphysicianprogramtoprovideincentivesfor physicianstoacceptassignment;theintroductionin1987oftheMaximumAllowableActual Chargelimitswhichrestrictedtheamountnon-participatingphysicianscouldcharge;the reductionsinprevailingchargesforoverpricedproceduresinstitutedforonegroupofprocedures in1988andforanotherin1990;andtheinstitutionoffeeschedulesforradiologyin1989and anesthesiologyin1990. Manyotherforcesarealsolikelytocontinuetoinfluencethediffusion ofnewtechnologyintothehealthdeliverysystem. Itisimportant,therefore,toviewanychanges foundinaccess,utilization,andappropriatenessinlightofthemanyfactorsthatmayinfluence thehealthcaresystemingeneralandMedicareinparticular. 1 Inpreviousreports,severalvulnerablepopulationgroupswereidentifiedandmonitored. These includebeneficiarieswhoarelivinginpovertyareas;thoseduallyeligibleforMedicareand Medicaid;African-AmericanMedicarebeneficiaries;disabledMedicarebeneficiaries;thevery old(i.e.,age85andover);Medicarebeneficiarieswithoutsupplementalinsurance;Medicare beneficiariesresidinginruralareasorresidinginareasdesignatedashealthprofessionalshortage areas;andMedicarebeneficiariesresidinginareasexpectedtoexperiencethegreatestdecreases inaverageMedicarefees. Therewereseveralkeyfindingsfromthepastreports. Previousreportsshowedthatthe introductionoftheMFSproducedthekindsofshiftsinpaymentsthatwereanticipated. In particular,therewasarelativeincreaseinallowedchargesforvisitsandconsultationsanda relativedecreaseinallowedchargesforprocedure-basedservices. However,thesereportsalsoshowedthatmanyvulnerablegroupsfacebarrierstocare. For example,theyshowedthatraceandincomearemajorfactorsthatinfluencetheamountandtype ofservicesMedicarebeneficiariesreceive. African-AmericanMedicarebeneficiaries,regardless ofincome,visitedaphysicianlessfrequentlythanwhitebeneficiaries,receivedfewerpreventive services,butwerehospitalizedmoreoften. Amongbothraces,thepoorestoftheelderlyhad fewerphysicianvisitsandpreventiveservices,butwerehospitalizedmoreoftenthanthemost affluent. ThesepatternssuggestthatAfrican-Americanbeneficiariesoverallandthepoorestof bothracesmaybereceivinglessprimaryandpreventivecarethanwhitesandmoreaffluent Medicarebeneficrafiesinbothraces. Similarly,thefindingsinthepreviousreportsalsosuggestthatAfrican-Americanandlow- incomeMedicarebeneficiariesarereceivinglessthanoptimalmanagementofdisease. In particular,African-AmericanandlowerincomewhiteMedicarebeneficiarieshaveahigherrate ofbilateralorchiectomy,aprocedureperformedforlatestageprostatecancer. African-American andlow-incomeMedicarebeneficiariesalsohavehigherratesofhospitaladmissionfor conditionsthatarepotentiallyavoidablewithtimelyandappropriateambulatorycare (ambulatorycaresensitiveconditions). Anarticlebasedondatadevelopedforthesereports (Gornick,Eggers,Reillyetal.1996)highlightedtheanalysesthatshowedthatAfrican-American andlowerincomewhiteMedicarebeneficiariesarealsomorelikelytohaveanamputationofall orpartofthelowerlimb,aprocedureoftenperformedbecauseofcomplicationsofdiabetes. Inadditiontoindicationsoflessthanoptimalprimarycareandmanagementofdisease,the findingsfrompastreportsalsosuggestthatAfrican-AmericanMedicarebeneficiarieshaveless accessthanwhitebeneficiariestoreferral-sensitiveprocedures2. Forexample,African-American Medicarebeneficiarieshavelowerratesofcoronaryarterybypassgraft(CABG),percutaneous transluminalcoronaryangioplasty(PTCA),andjointreplacementsthanwhitebeneficiaries. Whilethesedifferencesbetweenvulnerablegroupsareacauseforconcern,previousreportsdid notfindevidencethattheintroductionofthenewpaymentsystemforphysiciansproducednew 2 Referral-sensitiveproceduresarethoseproceduresforwhichabeneficiarytypically receivesareferralfromaprimarycarephysiciantoaspecialist. 2 barrierstocareforthevulnerablepopulationsstudied. WorkbytheMedicarePayment AssessmentCommissionanditspredecessor,thePhysicianPaymentReviewCommissionalso foundnoevidenceofapaymentpolicyeffectonaccesstocare. Therefore,thecurrentreport focusesonupdatingthetrendsinphysicianaccessshowninpreviousreportsanddescribing ongoingeffortsbytheDepartmenttoreducedisparitiesinhealthcare. Thisreportupdatesthree ofthebasicstudiesincludedinpreviousreportsandaddsanewanalysisbasedonsurveysof Medicarebeneficiaries. THE2001REPORT Thisreportpresentsresultsfromupdatingthreeofthebasicstudiesincludedinpreviousreports. TsehreviPcaerstaBndmotnoiatsosreisnsgcshyasntgeemsiisnuascecdestsotuopdphaytseictoitaanls'exspeernvdiicteusrienggreonwertahl.forPaMrtFSAcdaotvaeraerdeused intheseanalysestoassesstrendsintheuseofin-patienthospitalservices. Thelevelofphysician participationinMedicare'sfee-for-serviceprogramisassessedthroughananalysisofMedicare's ProviderSummaryfiles. Finally,thisyear'sreportincludesanalysesoftrendsinaccesstocare usingtheMedicareCurrentBeneficiarySurvey.3 Thisreportexaminesthesamespecificpolicyissuesaddressedinpreviousreports: Question1: ^ DoestheMFScontinuetoinvokethekindsofpaymentchanges anticipatedwithregardtoshiftsofMedicarepaymentsfrom proceduralservicestowardevaluationandmanagementservices? Table1showsthetrendintotalallowedchargesforphysicians'servicescoveredundertheMFS fortheyears1990through1999. Between1990and1991allowedchargesincreasedby 10.4percent,from$29.9billionto$33.0billion,arateofincreaseconsistentwiththedouble digitpercentincreasesduringthe1970sand1980s. Therewasaslightdecreaseof0.8percentin allowedchargesin1992,thefirstyearoftheMFS. Thisreflectsthe8.2percentincreaseinvisits andconsults,offsetbya9.1percentdecreaseinprocedures. Increasesin1993,1994and1995 were4.0percent,11.5percent,and8.1percent,respectively. Thegrowthinexpenditures between1993and1994forprocedure-basedservices,ascomparedtothedecreasein expendituresbetween1992and1993,reflectsalargeadjustmenttothefeescheduleupdatein 1994forthesurgicalservices.4 From1995to1998allowedchargesincreasesbyonly 3 ThetablesinthisreportwithdatafromthePartBmonitoringsystemincludedatathrough 1999,thoughduetotheincompletenatureofthe1999data,analysesofthesetablesaregenerally through1998. MedicarePartAdataonhospitalizations,anddatafromtheMedicareCurrent BeneficiarySurveyarethrough1998. 4 Feescheduleupdateswerebasedonexpenditureperformancerelativetotheexpenditure targetsetundertheMedicareVolumePerformanceStandard(MVPS)from1992-1998. There wasabouta2-yeartimelagbetweentheperformanceyearusedtocalculatetheupdateandthe yeartheupdateactuallytakeseffect. Thatis,foraspecifiedgroupofservices,suchassurgery, theJanuary1,1994feescheduleupdatereflectsexpenditureperformanceduringfiscalyear 3