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Medicare Prospective Payment System (PPS)

Publications

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

2010

  • Rural Medicare Advantage: Modest Enrollment Growth in 2010
    Date: 08 / 2010
    Author(s): Leah Kemper, Timothy D. McBride, Keith Mueller
    Research center: Rural Policy Research Institute (RUPRI) Center for Rural Health Policy Analysis
    Topics: Medicare, Medicare Advantage (MA), Medicare Prospective Payment System (PPS)
    Despite a slight drop in enrollment and a dramatic shift in the landscape of the rural Medicare Advantage (MA) market in early 2010, MA plans have experienced modest growth in enrollment in rural areas over the last two quarters of 2010. The majority of the growth is concentrated in preferred provider organization plans, counteracting a decline in private fee-for-service plan enrollment.
  • Comparison of Rural Hospitals with Special Medicare Payment Provisions to Urban and Rural Hospitals Paid Under Prospective Payment (Final Report)
    Date: 08 / 2010
    Author(s): G. Mark Holmes, George H. Pink, Sarah A. Friedman, Hilda A. Howard
    Research center: North Carolina Rural Health Research and Policy Analysis Center
    Topics: Critical Access Hospitals and Rural Hospital Flexibility Program, Medicare, Medicare Prospective Payment System (PPS)
    Report Number: No.98
    This final report compares the financial performance and condition of rural hospitals with special Medicare payment provisions to urban and rural hospitals paid under prospective payment (UPPS and R-PPS hospitals, respectively). Nine ratios from the three most common categories of ratios used in financial statement analysis (profitability, liquidity, and capital structure) as well as four other ratios that are commonly used to evaluate rural hospital financial performance are assessed.
  • Financial Comparison of Rural Hospitals With Special Medicare Payment Provisions to Hospitals Paid Under Prospective Payment (Findings Brief)
    Date: 04 / 2010
    Author(s): George H. Pink, Rebecca T. Slifkin, Hilda A. Howard
    Research center: North Carolina Rural Health Research and Policy Analysis Center
    Topics: Hospitals and clinics, Medicare, Medicare Prospective Payment System (PPS)
    Compares the profitability of hospitals with the four classifications of rural hospitals that can qualify for special payment provisions under Medicare (Critical Access Hospitals, Medicare Dependent Hospitals, Sole Community Hospitals, and Rural Referral Centers) to urban and rural hospitals paid under prospective payment over a recent three-year period.

2009

  • July 2009: Rural Enrollment in Medicare Advantage Continues to Grow
    Date: 08 / 2009
    Author(s): Leah Kemper, Timothy D. McBride, Keith Mueller
    Research center: Rural Policy Research Institute (RUPRI) Center for Rural Health Policy Analysis
    Topics: Medicare, Medicare Advantage (MA), Medicare Prospective Payment System (PPS)
    Report Number: 2009-8
    Rural enrollment in Medicare Advantage continues to grow, with growth in the last 18 months led by the growth of preferred provider organization (PPO) plans. Despite the growth in PPO plans, private fee-for-service plans continue to dominate enrollment in rural areas and have accounted for much of the program's growth since 2005.
  • May 2009: PPOs Driving Growth in Rural Medicare Advantage Enrollment
    Date: 06 / 2009
    Author(s): Leah Kemper, Timothy D. McBride, Keith Mueller
    Research center: Rural Policy Research Institute (RUPRI) Center for Rural Health Policy Analysis
    Topics: Medicare, Medicare Part D, Medicare Prospective Payment System (PPS)
    Report Number: 2009-7
    A changing landscape is emerging for rural Medicare Advantage (MA) enrollment in 2009 as rapid growth in preferred provider organization (PPO) plan enrollment is coupled with a decline in the growth rate of enrollment in private fee-for-service (PFFS) plans. Enrollment in MA plans has continued to climb in 2009, but it has been impacted by the slowed rate of growth in PFFS plans, which cover over half of MA enrollees in rural areas. The growth in PPO enrollment in recent months is likely tied to changes in policy that have encouraged the growth of new PPO plans, enrollment in existing PPO plans, and expansions of the service areas of existing plans.

2007

  • How Will Elimination of Hospital Bad Debt Reimbursement Affect Rural PPS Hospitals?
    Date: 07 / 2007
    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
    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
    Date: 09 / 2006
    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
    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
    Date: 08 / 2005
    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
    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
    Date: 01 / 2004
    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
    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)
    Date: 01 / 2004
    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
    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)
    Date: 11 / 2003
    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
    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
    Date: 12 / 2001
    Author(s): Penny E. Mohr
    Research center: Walsh Center for Rural Health Analysis
    Topic: Medicare Prospective Payment System (PPS)
    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
    Date: 01 / 2001
    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
    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?
    Date: 01 / 2001
    Research center: Walsh Center for Rural Health Analysis
    Topics: Health care financing, Hospitals and clinics, Medicare Prospective Payment System (PPS)
    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
    Date: 10 / 2000
    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
  • Area Wage Index of the Medicare Inpatient Hospital Prospective Payment System: Perspectives, Policies, and Choices
    Date: 08 / 2000
    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
    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
    Date: 06 / 2000
    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
    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
    Date: 04 / 2000
    Author(s): Sheila J. Franco, Joel Leon
    Research center: Walsh Center for Rural Health Analysis
    Topics: Home health, Medicare Prospective Payment System (PPS)
    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
    Date: 02 / 2000
    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)
    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
    Date: 01 / 2000
    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)
    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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