Rural Health Research Gateway

Medicare Prospective Payment System (PPS)

Publications

Listed by publication date. You can also view these publications alphabetically.

2007

  • How Will Elimination of Hospital Bad Debt Reimbursement Affect Rural PPS Hospitals?
    Author(s): Janet P. Sutton, Alene Kennedy, Lucia Hammer, Grace Yang
    Research center: Walsh Center for Rural Health Analysis
    Topics: Health care financing, Hospitals and clinics, Medicare Prospective Payment System (PPS)
    Report Number: Walsh W Series No. 11
    Date: 07 / 2007
    Policy brief examining the financial effect that changes in current Medicare bad debt payment policy, as proposed in the FY2007 budget, might have on rural hospitals.

2006

  • Primer on the Occupational Mix Adjustment to the Medicare Hospital Wage Index
    Author(s): Kristin Reiter, Rebecca Slifkin, Mark Holmes
    Research center: North Carolina Rural Health Research and Policy Analysis Center
    Topics: Medicare Prospective Payment System (PPS), Medicare Wage Index
    Report Number: Working Paper No. 86
    Date: 09 / 2006
    Focuses on the occupational mix adjustment (OMA) to the labor-related share in the hospital inpatient prospective payment system. The Primer explains what the OMA is, why it is needed and how it has been calculated. In addition, reasons why the effect of the OMA has been less than some rural advocates anticipated are discussed.

2005

  • Utilization of Home Health Services Among Rural Medicare Beneficiaries Before and After the PPS
    Author(s): Janet P. Sutton
    Research center: Walsh Center for Rural Health Analysis
    Topics: Home health, Medicare Prospective Payment System (PPS), Rural statistics and demographics
    Date: 08 / 2005
    Describes a study conducted to gather information on the rural effects of the PPS, including whether the PPS contributed to changes in: (1) the demographic and clinical characteristics of home care users; (2) the likelihood of using each of six home care disciplines (aide, skilled nursing, physical therapy, occupational therapy, speech therapy and medical social work); and (3) the intensity of services. A total of 99,367 home health episodes were represented in the two years of Medicare data examined. In both study years, urban residents accounted for three-quarters of episodes, while residents of large rural counties and those of remote rural counties accounted for approximately 21 percent and 3 percent of episodes, respectively. Findings suggest that the PPS has had a mixed effect on access to home care in rural counties. Study results indicated an association between implementation of the PPS and admitting home health diagnoses, utilization and intensity of home care episodes and, for the subset of home health users admitted from an acute hospital, readmission rates.

2004

  • Financially Distressed Rural Hospitals In Four States
    Research center: Walsh Center for Rural Health Analysis
    Topics: Health care financing, Hospitals and clinics, Medicare Prospective Payment System (PPS)
    Report Number: Policy Analysis Brief W Series No. 2
    Date: 01 / 2004
    The effect of the outpatient prospective payment system (OPPS) on the financial performance of rural hospitals was simulated in four states-Iowa, Texas, Washington, and West Virginia. Findings suggest that the profitability and cash position of small, government-owned, and Medicare-dependent hospitals will be adversely impacted by the OPPS. Results also suggest that the number of financially distressed rural hospitals will increase significantly. The small rural hospitals currently protected by the hold harmless provision are those most likely to be hardest hit by OPPS.
  • Rural-Urban Issues In The Wage Index Adjustment For Prospective Payment In Skilled Nursing Facilities (Brief Report)
    Author(s): Kathleen Dalton, Rebecca Slifkin
    Research center: North Carolina Rural Health Research and Policy Analysis Center
    Topics: Long term care, Medicare Prospective Payment System (PPS), Medicare Wage Index
    Report Number: Findings Brief
    Date: 01 / 2004
    The hourly wage data collected from Medicare-participating nursing homes were used to examine urban and rural patterns in average hourly nursing home wages and patterns of wage variation within the statewide rural labor markets defined by CMS. The data were also used to examine the adequacy of the hospital wage index as an adjuster for skilled nursing facility rates. Working Paper No. 78 also addresses this topic.

2003

  • Rural-Urban Issues In The Wage Index Adjustment For Prospective Payment In Skilled Nursing Facilities (Full Report)
    Author(s): Kathleen Dalton, Rebecca Slifkin
    Research center: North Carolina Rural Health Research and Policy Analysis Center
    Topics: Long term care, Medicare Prospective Payment System (PPS), Medicare Wage Index
    Report Number: Working Paper No. 78
    Date: 11 / 2003
    The hourly wage data collected from Medicare-participating nursing homes were used to examine urban and rural patterns in average hourly nursing home wages and patterns of wage variation within the statewide rural labor markets defined by CMS. The data were also used to examine the adequacy of the hospital wage index as an adjuster for skilled nursing facility rates. A findings brief on this topic is also available.

2001

  • Quality of Medicare Outpatient Claims Data and Its Implications for Rural Outpatient Payment Policy
    Author(s): Penny E. Mohr
    Research center: Walsh Center for Rural Health Analysis
    Topic: Medicare Prospective Payment System (PPS)
    Date: 12 / 2001
    Analyzes Medicare outpatient claims to see if relatively poor quality of small rural hospitals' claims data have amplified the negative effects of the new payment system on small hospitals. Compares three indicators of quality across urban, rural, and small rural hospitals: 1) proportion of claims with missing procedure codes, 2) proportion of claims with multiple procedures codes, and 3) proportion of "low-intensity" versus higher intensity evaluation and management or emergency room services. Finds no significant differences among urban, rural, and low-volume rural hospitals with respect to missing codes; urban hospitals were more likely to have multiple codes; and small rural hospitals were substantially more likely to submit low intensity claims. Study does not refute the possibility that undercoding played a role in CMS's forecasts of negative impact of the outpatient PPS for small rural hospitals. Report available on request.
  • PPS Inpatient Payment and the Area Wage Index
    Author(s): Kathleen Dalton, Rebecca T. Slifkin
    Research center: North Carolina Rural Health Research and Policy Analysis Center
    Topics: Hospitals and clinics, Medicare Prospective Payment System (PPS), Medicare Wage Index
    Date: 01 / 2001
    Discusses how inpatient rates are calculated, the role of the wage index, and issues surrounding the wage index and reimbursement to rural hospitals by Medicare under the Prospective Payment System (PPS).
  • Will the Outpatient Prospective Payment System Increase the Number of Distressed Rural Hospitals in Iowa, Texas, Washington, and West Virginia?
    Research center: Walsh Center for Rural Health Analysis
    Topics: Health care financing, Hospitals and clinics, Medicare Prospective Payment System (PPS)
    Date: 01 / 2001
    Simulates the financial impact of the outpatient prospective payment system rates and estimates the number and type of rural hospitals in the five states likely to become financially distressed as a result of its implementation. Results clearly suggest that the outpatient PPS will have a significant negative impact on the profitability and cash position of many rural hospitals, especially those that are small, government owned, and classified as Medicare dependent. The results also suggest that this negative impact may lead to a significant increase in the number of financially distressed rural hospitals. Given these findings, a permanent exemption to outpatient prospective payment to small hospitals may be a policy alternative that would benefit rural communities and cost the Medicare program relatively little. Report available on request.

2000

  • Rural Hospital Area Wages and the PPS Wage Index: 1900-1997
    Author(s): Kathleen Dalton, Rebecca Slifkin, Hilda Howard
    Research center: North Carolina Rural Health Research and Policy Analysis Center
    Topics: Medicare Prospective Payment System (PPS), Medicare Wage Index
    Date: 10 / 2000
  • Area Wage Index of the Medicare Inpatient Hospital Prospective Payment System: Perspectives, Policies, and Choices
    Author(s): Anthony Wellever, Andrew Coburn, Charles Fluharty, J. Patrick Hart, A. Clinton MacKinney, Timothy McBride, Keith Mueller, Rebecca Slifkin
    Research center: Rural Policy Research Institute (RUPRI) Center for Rural Health Policy Analysis
    Topics: Health care financing, Legislation and regulation, Medicare Prospective Payment System (PPS), Medicare Wage Index
    Date: 08 / 2000
    This Policy Paper summarizes the positions of various rural health advocates and recording the actions taken by Congress and the Health Care Financing Administration (HCFA) to improve the wage index. Finally, it outlines the research needed to energize the policy discussion of the uses and methods of calculating the hospital wage index. Report produced by the RUPRI Rural Health Panel.
  • Calculating and Using the Area Wage Index of the Medicare Inpatient Hospital Prospective Payment System
    Author(s): Anthony Wellever
    Research center: Rural Policy Research Institute (RUPRI) Center for Rural Health Policy Analysis
    Topics: Medicare Prospective Payment System (PPS), Medicare Wage Index
    Date: 06 / 2000
    This policy brief explains how the area wage index is calculated and used, and identifies the major unresolved issues related to its calculation and use. Report produced by the RUPRI Rural Health Panel.
  • Rural Home Health Agencies: The Impact of the Balanced Budget Act
    Author(s): Sheila J. Franco, Joel Leon
    Research center: Walsh Center for Rural Health Analysis
    Topics: Home health, Medicare Prospective Payment System (PPS)
    Date: 04 / 2000
    This policy analysis brief examines how the characteristics of rural and urban Medicare-certified home health agencies differ, estimates the impact of interim payment system (IPS) on these agencies, and discusses policy implications for a Medicare home health prospective payment system (PPS). For a print copy of publications prior to 2004, please contact the Walsh Center at 301-951-5070.
  • At-Risk Hospitals: The Role of Critical Access Hospital Status in Mitigating the Effects of New Prospective Payment Systems Under Medicare
    Author(s): Kathleen Dalton, Rebecca Slifkin, Hilda Howard
    Research center: North Carolina Rural Health Research and Policy Analysis Center
    Topics: Critical Access Hospitals and Rural Hospital Flexibility Program, Medicare Prospective Payment System (PPS)
    Date: 02 / 2000
    This report examines not-for-profit hospitals that potentially qualify as Critical Access Hospitals and identifies those facilities that are at risk as a result of Medicare's PPS to non-acute care settings.
  • Role of CAH Status in Mitigating the Effects of New Prospective Payment Systems Under Medicare
    Author(s): Kathleen Dalton, Rebecca T. Slifkin, Hilda A. Howard
    Research center: North Carolina Rural Health Research and Policy Analysis Center
    Topics: Critical Access Hospitals and Rural Hospital Flexibility Program, Health care financing, Medicare Prospective Payment System (PPS)
    Date: 01 / 2000
    Examines rural hospitals that potentially qualify as Critical Access Hospitals (CAH), and identifies facilities at substantial financial risk as a result of Medicare?s expansion of prospective payment systems (PPS) to non-acute settings.

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