Trends in Special Medicare Payments and Service Utilization for Rural Areas in the 1990s

Trends in Special Medicare Payments and Service Utilization for Rural Areas in the 1990s

Donna O. Farley
Lisa R. Shugarman
Pat Taylor
Moira Inkelas
J. Scott Ashwood
Feng Zeng
Katherine M. Harris
Copyright Date: 2002
Published by: RAND Corporation
Pages: 209
https://www.jstor.org/stable/10.7249/mr1595cms
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  • Book Info
    Trends in Special Medicare Payments and Service Utilization for Rural Areas in the 1990s
    Book Description:

    This report analyzes special payments that Medicare has been making to rural providers. These special payments are intended to support the rural health care infrastructure to help ensure access to care for Medicare beneficiaries. The research provides a comprehensive overview of these payments, including documentation of the supply of providers, trends in payments, and Medicare costs per beneficiary. Four types of special payments were examined: (1) payments to sole community hospitals, Medicare-dependent hospitals, and rural referral centers; (2) reimbursements to rural health clinics and federally qualified health centers; (3) bonus payments to physicians in rural health professional shortage areas; and (4) capitation payments in rural counties.

    eISBN: 978-0-8330-5686-3
    Subjects: Health Sciences

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. PREFACE
    (pp. iii-iv)
  3. Table of Contents
    (pp. v-viii)
  4. TABLES
    (pp. ix-xvi)
  5. SUMMARY
    (pp. xvii-xxviii)
  6. ACKNOWLEDGMENTS
    (pp. xxix-xxx)
  7. ACRONYMS
    (pp. xxxi-xxxii)
  8. 1. INTRODUCTION
    (pp. 1-20)

    The Centers for Medicare and Medicaid Services (CMS, formerly the Health Care Financing Administration) contracted with RAND to analyze special payments that Medicare has been making to rural providers and the implications for access and costs of care for rural Medicare beneficiaries. Although the special payment provisions are diverse, they all are intended to support the rural health care infrastructure to help ensure access to care for Medicare beneficiaries residing in rural areas. These provisions were introduced at various times during the past decade or earlier. CMS is interested in developing information for use in formulating future Medicare policy for...

  9. 2. METHODS AND DATA
    (pp. 21-40)

    The trend analysis results presented in this report encompass six distinct areas of research. The general research strategy was to analyze trends in Medicare payments during the 1990s under special payment provisions for rural hospitals, RHCs and FQHCs, and physicians. The methods and data used for these analyses are described in this section. The following specific analyses were performed, the results of which are presented in Sections 3 through 8 of this report:

    Descriptive profiles of the U.S. counties, categorized as urban, rural, or frontier, which generated baseline information on county characteristics for use in the trend analyses (Section 3);...

  10. 3. CHARACTERISTICS OF U.S. METROPOLITAN AND NON-METROPOLITAN COUNTIES
    (pp. 41-52)

    This section provides background information on the distributions of counties by the metropolitan and non-metropolitan categories used in this research and on their characteristics with respect to population size, designations of underserved areas, and supply of health care providers. This information provides context for the study, and a number of the measures presented also are used in analyses reported in subsequent sections. The analyses were designed to address the following research questions:

    To what extent do the non-metropolitan counties vary by extent of rurality, as measured by the UICs?

    What are the demographic and socioeconomic characteristics of non-metropolitan counties and...

  11. 4. PAYMENT TRENDS FOR NON-METROPOLITAN HOSPITALS
    (pp. 53-94)

    The analysis presented in this section describes trends during the 1990s in the distribution, characteristics, and utilization of both the total supply of hospitals in non-metropolitan counties and hospitals with special designations for payment purposes. In addition, we describe trends in utilization of inpatient services by Medicare beneficiaries residing in non-metropolitan counties, including examination of the extent to which they use urban or rural hospitals and differences in the types of admissions to each type of hospital. The analyses were designed to address the following research questions:

    How have the supply of Medicare-certified hospitals in rural areas and the mix...

  12. 5. TRENDS FOR RURAL HEALTH CLINICS AND FEDERALLY QUALIFIED HEALTH CENTERS
    (pp. 95-118)

    The research reported in this section examined trends in service use and payments for Rural Health Clinics and Federally Qualified Health Centers for the time period of 1991 through 1998. The analyses were designed to generate information regarding implications for access to care for beneficiaries in non-metropolitan counties and for cost impacts for Medicare. Our analyses address the following research questions:

    What were growth trends in the number and characteristics of facility-based RHCs, provider-based RHCs, and non-metropolitan FQHCs and how did they differ?

    In what types of geographic locations was this growth concentrated, as defined by categories of non-metropolitan counties,...

  13. 6. UTILIZATION AND SPENDING FOR PHYSICIAN SERVICES
    (pp. 119-136)

    The analyses presented in this section describe trends during the 1990s in the distribution and characteristics of both basic payments and bonus payments made to physicians on behalf of rural Medicare beneficiaries in non-metropolitan counties and in counties with a HPSA designation. The analyses were designed to address the following basic questions:

    How have total payments and bonus payments for physician services provided to rural Medicare beneficiaries changed during the decade of the 1990s? What proportion of these payments is for beneficiaries residing in rural HPSAs and those residing outside HPSAs?

    How has the distribution of bonus payments across primary...

  14. 7. 1990–1997 TRENDS IN AAPCC CAPITATION RATES
    (pp. 137-154)

    The AAPCC rates that CMS published each year through 1997 were set at 95 percent of the adjusted average per capita costs for Medicare fee-for-service beneficiaries. These rates were the basis for capitation payments to Medicare health plans, which were risk-adjusted using demographic factors. Medicare AAPCCs were calculated for more than 3,100 counties and similar geographic areas within the continental United States.²² The AAPCC rates were replaced in 1998 by the new capitation rates established by the BBA of 1997. The 1997 AAPCCs were the baseline capitation rates for calculation of these new capitation rates. The BBA also mandated an...

  15. 8. SPECIAL HOSPITAL PAYMENTS AND PART A PER CAPITA COSTS
    (pp. 155-168)

    The analysis reported in this section examines the effects of special payment provisions for qualified rural hospitals on Medicare spending for beneficiaries residing in non-metropolitan counties. The analyses addressed the following research questions:

    To what extent have Medicare special payment policies for rural hospitals increased total Medicare payments made to hospitals serving beneficiaries in non-metropolitan areas?

    How were the extra payments created by these special payment policies distributed across counties of differing degrees of rurality, as measured by the UIC categories?

    How much additional Medicare payments have rural hospitals with special designations received due to these provisions, above what they...

  16. 9. POLICY IMPLICATIONS AND RECOMMENDATIONS
    (pp. 169-176)

    In this section, we consider the implications of our research findings regarding the Medicare special payment provisions for rural providers and the goals they were intended to address. First, we explore findings regarding possible effects of the special payment policies on access to and costs of care for rural Medicare beneficiaries and implications for Medicare payment policy to further support these goals. Then we present recommendations for additional research to examine some of the specific issues involved with the numerous payment policies and their effects on access and costs of care.

    Despite continuing concerns regarding the viability of the hospital...

  17. REFERENCES
    (pp. 177-182)
  18. APPENDIX A. SPECIAL MEDICARE PAYMENTS FOR RURAL HOSPITALS
    (pp. 183-188)
  19. B. DEFINITIONS OF RURALITY
    (pp. 189-192)