Geographic Adjustment in Medicare Payment: Phase I: Improving Accuracy, Second Edition

265 Pages·2011·7.38 MB·English

by  Institute of Medicine, Board on Health Care Services, Committee on Geographic Adjustment Factors in Medicare Payment

Geographic Adjustment in Medicare Payment: Phase I: Improving Accuracy, Second Edition

Geographic Adjustment in Medicare Payment
Phase I: Improving Accuracy

Second Edition

Committee on Geographic Adjustment Factors in Medicare Payment

Board on Health Care Services

Margaret Edmunds and Frank A. Sloan, Editors

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Geographic Adjustment in Medicare Payment: Phase I: Improving Accuracy, Second Edition

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NOTICE: The project that is the subject of this report was approved by the Governing Board of the
National Research Council, whose members are drawn from the councils of the National Academy of
Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the
committee responsible for the report were chosen for their special competences and with regard for
appropriate balance.

This study was supported by Contract No. HHS P23320042509XI, Task Order No. HHS P23337012T
between the National Academy of Sciences and the Centers for Medicare and Medicaid Services. Any
opinions, findings, conclusions, or recommendations expressed in this publication are those of the
author(s) and do not necessarily reflect the view of the organizations or agencies that provided support
for this project.

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Suggested citation: IOM (Institute of Medicine). 2011. Geographic Adjustment in Medicare Payment:
Phase I: Improving Accuracy. Washington, DC: The National Academies Press.

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Geographic Adjustment in Medicare Payment: Phase I: Improving Accuracy, Second Edition

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Geographic Adjustment in Medicare Payment: Phase I: Improving Accuracy, Second Edition

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Geographic Adjustment in Medicare Payment: Phase I: Improving Accuracy, Second Edition

COMMITTEE ON GEOGRAPHIC ADJUSTMENT FACTORS IN MEDICARE PAYMENT

FRANK A. SLOAN (Chair), J. Alexander McMahon Professor of Health Policy and Management, Professor
of Economics, Center for Health Policy, Duke University
M. ROY WILSON (Vice Chair), Chair, Board of Trustees, Charles R. Drew University of Medicine and
Science, and Chancellor Emeritus, University of Colorado Denver
JON B. CHRISTIANSON, Professor and James A. Hamilton Chair in Health Policy and Management,
University of Minnesota School of Public Health
STUART GUTERMAN, Vice President, Payment and System Reform, The Commonwealth Fund
JUDITH K. HELLERSTEIN, Professor, Economics, University of Maryland (resigned from committee service
June 2011)
CARLOS R. JAÉN, Chair of Family and Community Medicine and Dr. John M. Smith, Jr. Endowed Professor,
University of Texas Health Science Center at San Antonio
JACK KALBFLEISCH, Professor of Biostatistics and Statistics and Director, Kidney Epidemiology and Cost
Center, University of Michigan School of Public Health
MERIDEAN MAAS, Professor Emerita and Co-Director of the John A. Hartford Center of Geriatric Nurse
Excellence, University of Iowa (resigned from committee service January 2011)
MARILYN MOON, Senior Vice President and Director, Health, American Institutes of Research
CATHRYN NATION, Associate Vice President, Division of Health Sciences and Services, University of
California Office of the President
JOANNE M. POHL, Professor Emerita, Division of Health Promotion and Risk Reduction, University of
Michigan School of Nursing (appointed to committee service June 2011)
THOMAS RICKETTS III, Managing Director, Cecil G. Sheps Center for Health Services Research, University of
North Carolina, Chapel Hill
JANE E. SISK, Director, Division of Health Care Statistics, Centers for Disease Control and Prevention,
National Center for Health Statistics
BRUCE STEINWALD, Independent Consultant
DAVID VLAHOV, Dean and Professor, School of Nursing, University of California, San Francisco
BARBARA O. WYNN, Senior Policy Analyst, RAND Corporation
ALAN M. ZASLAVSKY, Professor, Health Care Policy (Statistics), Harvard Medical School
STEPHEN ZUCKERMAN, Senior Fellow, Health Policy Center, The Urban Institute

RTI International Consultants
KATHLEEN DALTON, RTI Project Director, Senior Health Policy Analyst
GREGORY C. POPE, Program Director, Health Care Financing and Payment Program
WALTER ADAMACHE, Research Economist
ELIZABETH SEELEY, Health Economist
DEBORAH HEALY, Research Economist
BRIEANNE LYDA-MACDONALD, Public Health Analyst
JUSTINE L.E. ALLPRESS, Research Geospatial Programmer/Analyst
NATHAN WEST, Health Services Analyst
ALTON WRIGHT, Public Health Analyst

Study Staff
MARGARET EDMUNDS, Study Director
KATHLEEN HADDAD, Senior Program Officer
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Geographic Adjustment in Medicare Payment: Phase I: Improving Accuracy, Second Edition

SERINA S. RECKLING, Research Associate
SARA SPIZZIRRI, Research Assistant
JOI WASHINGTON, Research Assistant (August 2011)
ASHLEY McWILLIAMS, Senior Program Assistant (August 2010 to August 2011)
JOHN BAILAR III, Scholar-in-Residence
ROGER C. HERDMAN, Board Director
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Geographic Adjustment in Medicare Payment: Phase I: Improving Accuracy, Second Edition

REVIEWERS
This report has been reviewed in draft form by individuals chosen for their diverse perspectives and
technical expertise, in accordance with procedures approved by the National Research Council’s Report
Review Committee. The purpose of this independent review is to provide candid and critical comments
that will assist the institution in making its published report as sound as possible and to ensure that the
report meets institutional standards for objectivity, evidence, and responsiveness to the study charge.
The review comments and draft manuscript remain confidential to protect the integrity of the
deliberative process. We wish to thank the following individuals for their review of this report:

ANDREW BAZEMORE, The Robert Graham Center
ROBERT BERENSON, The Urban Institute
DAVID CUTLER, Harvard University
JONATHAN GRUBER, Massachusetts Institute of Technology
KAREN HELLER, Greater New York Hospital Association
TERRENCE KAY, Centers for Medicare and Medicaid Services
KEITH J. MUELLER, University of Iowa
JOSEPH NEWHOUSE, Harvard University
DOUGLAS REDING, Marshfield Clinic
GEORGE STAMAS, Bureau of Labor Statistics
DAVID TORCHIANA, Massachusetts General Physicians Organization
JAN TOWERS, American Academy of Nurse Practitioners
LANCE A. WALLER, Emory University, Rollins School of Public Health

Although the reviewers listed above have provided many constructive comments and suggestions,
they were not asked to endorse the conclusions or recommendations nor did they see the final draft of
the report before its release. The review of this report was overseen by Harold Sox, American College of
Physicians, and Charles E. Phelps, Rochester University. Appointed by the National Research Council and
Institute of Medicine, they were responsible for making certain that an independent examination of this
report was carried out in accordance with institutional procedures and that all review comments were
carefully considered. Responsibility for the final content of this report rests entirely with the authoring
committee and the institution.
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Geographic Adjustment in Medicare Payment: Phase I: Improving Accuracy, Second Edition

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Geographic Adjustment in Medicare Payment: Phase I: Improving Accuracy, Second Edition

ACKNOWLEDGMENTS

The Committee on Geographic Adjustment Factors in Medicare Payment and the Institute of
Medicine (IOM) study staff would like to thank the many individuals and organizations who generously
contributed their time, knowledge, and expertise to this report.
The following individuals shared their expertise through invited presentations at the two public
sessions: James Bentley, Consultant; Dan Black, Professor and Dean of the Harris School of Public Policy,
University of Chicago; The Honorable Bruce Braley, U.S. House of Representatives, Iowa; Larry
DeGhetaldi, Palo Alto Medical Foundation and Chair of Medicare Committee, California Medical
Association; Roland Goertz, President, American Academy of Family Physicians; Karen Heller, Executive
Vice President, Greater New York Hospital Association; Michael Kitchell, President of Board of Directors,
McFarland Clinic and President, Iowa Medical Society; Mark Miller, Executive Director of MedPAC; Rob
Otten, Vice President of Health Policy, American Medical Association; James Potter, Senior VP of
Advocacy and Government Relations, American Academy of Physician Assistants; Douglas Reding, Vice
President, Marshfield Clinic; Jennie Rhinehart, Administrator and CEO, Community Hospital, Tallassee,
Alabama; Elena Rios, President, National Hispanic Medical Association; The Honorable Allyson Schwartz,
Pennsylvania; Sherry Smith, Director of Physician Payment Policy at the American Medical Association;
Byron Sogie-Thomas, Health Policy Director, National Medical Association; James Spletzer, Senior
Research Economist, Bureau of Labor Statistics; Alice Tolbert-Coombs, President, Massachusetts Medical
Society; and Jan Towers, Health Policy Director, American Academy of Nurse Practitioners. Additional
presentations were made by Dale Baker, Baker Consulting; Tim Bartholow, Wisconsin Medical Society;
Edward Bentley, Santa Barbara Gastroenterology Associates; Craig Boyer, North Country Health
Services, Bemidji, Minnesota; and Jerome Connolly, American Academy of Family Physicians; Dario
DeGhetaldi, Corey, Luzaich, Pliska, DeGhetaldi & Nastari LLP.
Written testimony from the following individuals and organizations is gratefully acknowledged:
The Honorable Charles Grassley, United States Senate, Iowa; Atul Grover, Chief Advocacy Officer,
Association of American Medical Colleges; Joanna Kim, Senior Associate Director, Policy, American
Hospital Association; Ellen Kugler, National Association of Urban Hospitals; Brent Miller, Director of
Federal Government Relations, Marshfield Clinic; Anne O’Rourke, California Hospital Association; Eneida
Roldan, President and CEO, Jackson Health System, Miami; Steve Speil, Senior Vice President, Health and
Finance Policy, Federation of American Hospitals; and David Winslow, Vice President, Maine Hospital
Association. A commissioned paper by Dobson DaVanzo LLC on the technical approach to the study was
also provided.
Several others provided valuable information and technical assistance. Phil Doyle, Laurie
Salmon, and George Stamos of the Bureau of Labor Statistics met with committee members and staff
and provided statistical consultations and data for the committee’s consideration. Alex Calgano of the
Massachusetts Medical Society; Linda Fishman and Don May of the American Hospital Association; Atul
Grover of the American Association of Medical Colleges; Elizabeth McNeil of the California Medical
Association; Brent Miller of Marshfield Clinic; and Robert Phillips, Director of the Robert Graham Center:
Policy Studies in Family Medicine and Primary Care were instrumental in identifying speakers for the
public sessions and in providing materials for the committee’s consideration.
Several Congressional staff members also provided valuable background information for the
study. They include Susan Walden of the Senate Committee on Finance; Jennifer Friedman, Geoff
Gerhardt, and Tim Gronniger of the House Committee on Ways and Means, Subcommittee on Health;
Stephen Cha and Anne Morris, House Committee on Energy and Commerce; Christa Shively, Office of
Congressman Earl Blumenauer; Mike Goodman, Office of Congressman Bruce Braley; Megan Eidman,
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