Medicare

Short-Term Fixes to the Sustainable Growth Rate Process . 4.2 Changes in the Design of the UAF

As indicated in the summary discussion of the current SGR update process, the magnitude of the UAF is a key determinant of the size of Medicare payment updates. Without the UAF portion of the SGR process, payments would be updated using the MEI. The UAF is the means by which the update process recovers over-spending.

Short-Term Fixes to the Sustainable Growth Rate Process . 4.1 Changes in the Measure of the Costs of Practice

The MEI is a fixed-weight input price index reflecting average annual changes in prices for inputs required to produce physician services, namely the physician’s own time and practice expense. The MEI is an important ingredient in the SGR process, affecting payment updates in two ways (Figure 2). The measure is used directly in the c

Short-Term Fixes to the Sustainable Growth Rate Process . 4.0 Potential Refinements of the SGR

Short-Term Fixes to the Sustainable Growth Rate Process . 3.2 Current Law Baseline

On the surface, study of the SGR payment process is straightforward. The process can be described as a recursive model, consisting of a set of algebraic relationships that are linked over time. This view, however, is somewhat naïve, as noted above. Changes in data alter future but not past values of SGR process relationships, and prediction

Short-Term Fixes to the Sustainable Growth Rate Process . 3.1 Methods

Analysis of the SGR process might be helpful in setting the stage for refinements that can be implemented to overcome current flaws resulting from the formula, as well as suggesting longer run changes that might be considered for more substantive changes to the payment update process in the future. A spreadsheet model of the SGR process was cons

Short-Term Fixes to the Sustainable Growth Rate Process . 3.0 Modeling the SGR Process

Short-Term Fixes to the Sustainable Growth Rate Process . 2.2.3 Criticisms of the SGR Process

Advocates for SGR reform cite significant flaws with the current process. First, recent updates have been large and negative, a consequence of over-spending. A string of negative updates has pressured Congress to intervene legislatively, as large and widespread changes in provider behavior are necessary to overcome the negative impacts on paym

Short-Term Fixes to the Sustainable Growth Rate Process . 2.2.2. The SGR Process

The VPS was replaced with the SGR process, following passage of the Balanced Budget Act of 1997. As was VPS, the SGR process was designed to allow for increases in Medicare payments while ensuring that growth in aggregate spending would be contained. 4 Unlike the VPS when it was replaced, the SGR system produces a single update. Figure 2.

Short-Term Fixes to the Sustainable Growth Rate Process . 2.2.1 History

Over time, a variety of policy measures designed to help contain costs has been incorporated into the Medicare program. But policymakers have also demonstrated concerns with maintaining efficiencies and not introducing policies with incentives that distort the health care system and lead to undesirable distributional outcomes. Prospective paym

Short-Term Fixes to the Sustainable Growth Rate Process . 2.2 Physician Payment Policy

Short-Term Fixes to the Sustainable Growth Rate Process . 2.1.2 Decomposing Spending Growth

Some of the changes in spending displayed in Figure 1 are due to changes in price and changes in the number of Medicare beneficiaries over time. Year-to-year changes in total spending were decomposed into changes attributable to price, the number of traditional fee-for-service Part B program beneficiaries, and intensity – changes in ut

Short-Term Fixes to the Sustainable Growth Rate Process . 2.1.1 Per Beneficiary Spending

On a per beneficiary basis, SGR spending increased from $1,371 in 1996 to $2,376 in 2004 – a total of 73 percent (61 percent of spending if drugs and lab tests are excluded) (Table 1). It is clear that growth in spending varies by type of service from one year to the next, as changes in price (as measured by the update), impact most ty

Short-Term Fixes to the Sustainable Growth Rate Process . 2.1 Spending Trends

Medicare allowed charges increased from a total of just under $45 billion in 1996 to almost $82 billion in 2004, a 51 percent increase (Figure 1) 2 . Most of this spending was for physician services included in spending estimates used in the SGR payment update process. If spending on chemotherapy and other drugs and on lab tests are subtracted

Short-Term Fixes to the Sustainable Growth Rate Process . 2.0 Background

Short-Term Fixes to the Sustainable Growth Rate Process . 1.0 Purpose and Overview

There has been considerable recent interest in revising the Sustainable Growth Rate (SGR) process of updating payments to physicians and other providers under the Medicare program. Researchers at the Centers for Medicare & Medicaid Studies (CMS) and with the U.S.

Short-Term Fixes to the Sustainable Growth Rate Process . Executive Summary

Purpose: This report assesses effects of a variety of refinements to the current Sustainable Growth Rate (SGR) Medicare physician payment update process. A spreadsheet model of the SGR process was developed to examine changes in conversion factors (CFs) and program spending in response to changes in the SGR process, including changes to

Short-Term Fixes to the Sustainable Growth Rate Process

Final Report Presented to: Lynn Nonnemaker DHHS/OS/ASPE Presented by: NORC at the University of Chicago 1350 Connecticut Ave, NW, Suite 500 Washington, DC 20036 (202) 223-6040

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Evaluation of Selected Aspects of the National Medicare Education Program: Final Design Report. Appendix B

Final Design Report B-1 Appendix B: MCBS Survey Questions

Evaluation of Selected Aspects of the National Medicare Education Program: Final Design Report. Appendix A

Summary of Previous NMEP Evaluations Table A-1 summarizes previous NMEP evaluations (including basic data design, data source and population studied, sample sizes, and study period) first presenting the approaches used in CMS-sponsored analyses, followed by methods used in other government studies, and, finally, the methods used in studies condu

Evaluation of Selected Aspects of the National Medicare Education Program: Final Design Report. References

Andreasen, A (1995). Marketing Social Change: Changing Behavior to Promote Health, Social Development, and the Environment . San Francisco: Jossey-Bass. Bann CM, Berkman N, and Kuo TM (2004) Insurance knowledge and decision-making practices among Medicare beneficiaries and their caregivers. Medical Care , 2(11):1091-9. Bertrand JT (2006). Intr

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