IOM finds flaws in Medicare payments to hospitals, doctors

Jun 3 2011

The report released Wednesday concluded that the Medicare program uses inaccurate and unreliable data to determine provider payments. 

The New York Times: Report Finds Inequities In Payments For Medicare
Medicare uses inaccurate, unreliable data to pay doctors and hospitals, the National Academy of Sciences said Wednesday. Although Medicare is a national program, it adjusts payments to health care providers to reflect regional differences in wages, rent and other costs (Pear, 6/1).

Kaiser Health News: Report: Big Flaws In How Medicare Pays Hospitals, Doctors
Medicare pays more to doctors and hospitals in expensive parts of the country. But a prestigious panel says Medicare's methods of evaluating regional costs are disturbingly imprecise and need to be overhauled" (Rau, 6/1).

Reuters: Medicare Payments To Hospitals Not Correct
Some hospitals could get less reimbursement money from the Medicare health care program based on geographic location, according to a report commissioned by the government. Currently, Medicare reimbursements for hospitals and other health care providers depend on the rent or wages in the location where they operate. But almost 40 percent of hospitals get exceptions to how their adjustments are calculated, said a report from the Institute of Medicine (IOM) on Wednesday (Yukhananov, 6/1).

The Hill: Study Recommends Changes To the Way Medicare Payments Factor In Geography
The Institute of Medicine said Wednesday that Congress and the administration should standardize the labor markets and the wage and benefits indexes it uses when adjusting Medicare payments for hospitals and physicians based on local costs. The IOM recommendations are the first of two reports on geographic adjustments required by the health care reform law. More than 30 House Democrats from the Midwest and Pacific Northwest demanded a review of the way Medicare adjusts payments for providers because of concerns that providers in their districts are getting stiffed (Pecquet, 6/1).

The Washington Post reports on other Medicare cost-related news —

The Washington Post: Experiment To Lower Medicare Costs Did Not Save Much Money
A key government experiment that set out to lower costs and coordinate care for Medicare patients — now the blueprint for an innovation the Obama administration is trying to move to a national scale — has failed to save a substantial amount of money. The five-year test enlisted 10 leading health systems around the country and offered financial bonuses if they could save enough by treating older patients more efficiently while providing high-quality care (Goldstein, 6/1).