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Are CMS Payments Associated with Numbers of Medicare Beneficiaries in Each State?

Medicare and Medicaid Service payments vary greatly across the US, but are not associated with the volume of Medicare beneficiaries or overall per-capita health care costs for each state, researchers report in the March issue of Clinical Gastroenterology and Hepatology.

Mixed Race businessman holding money_webThere are large geographic disparities in costs of health care, including costs of gastroenterology services. Gavin C. Harewood and Omar Alsaffar investigated whether regional variations in Centers for Medicare and Medicaid Services (CMS) payments were associated with each state’s relative prevalence of Medicare beneficiaries per gastroenterologist.

In April 2014, the CMS released extensive data on the payments in 2012 to more than 880,000 health care providers, for 6000 procedures and services in all 50 states (for which Medicare paid $77 billion). Harewood and Alsaffar used the data to determine payments to gastroenterologists in each state and look for correlations between per-state physician Medicare payments and overall health care costs.

They found a 5-fold difference in the mean per-gastroenterologist payment among states, ranging from $35,293 in Minnesota to $175,028 in Mississippi; the mean payment amount in the US was $104,939.

They also observed a 5-fold difference in the prevalence of Medicare beneficiaries/gastroenterologist among states, ranging from 1495/physician in Washington DC to 7009/physician in Wyoming, with a mean of 3950/physician.

When per-physician payments were adjusted for Medicare patient prevalence (payment was divided by Medicare patients/doctor), there was a 5.6-fold difference among states, ranging from $11/patient in Hawaii to $62/patient in Washington DC.

However, the authors found no correlation between the mean per-physician payment and the mean number of Medicare patients per physician (r = 0.09) for each state, and no correlation between the mean adjusted per-physician payment and the overall mean per-capita health care costs for each state (r = -0.22).

The 5 least expensive states in mean per-physician billings and payments for Medicare patients were Hawaii, Oregon, Minnesota, Vermont, and New Mexico.

The 5 most expensive states were Mississippi, Florida, New Jersey, Washington DC, and Maryland. The authors say that they found significant disparities in payments and billings for each state, with colonoscopy services, followed by outpatient visits, accounting for the largest proportion of payments.

Harewood and Alsaffar say they were surprised by the finding that there was no association between the relative prevalence of Medicare patients per physician and physician payments. They propose that individual practice behaviors of clinicians, rather than patient factors, account for much of the regional disparity in resource utilization.

Harewood and Alsaffar explain that Medicare payment systems (which vary up to 10% above or below a set reference point) are adjusted for local market conditions, which inflate Medicare payments in high-wage markets and reduce payments in low-wage markets. Although these could contribute to the regional variations the authors observed, they are unlikely to be the only cause—each Medicare patient in Washington DC is not likely to require, on average, 5 times as much care as patients in Hawaii.

The authors conclude that adjusted Medicare physician payments vary among regions; per-capita Medicare reimbursements in Miami are more than twice those in Minneapolis. They would like to learn whether this phenomenon is unique to the Medicare population or also applies to privately insured patients.

Harewood and Alsaffar say studies into Medicare spending and gastroenterologist practice patterns provide important insights for health care providers, patients, policymakers, and other stakeholders in the distribution of Medicare payments. Future studies are needed to characterize factors that influence health care spending among the Medicare population.

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Kristine Novak

Kristine Novak

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About The Author:

Dr. Kristine Novak

Dr. Kristine Novak

Dr. Kristine Novak is a science writer and editor based in San Francisco. She has extensive experience covering gastroenterology, hepatology, immunology, oncology, clinical, and biotechnology research discoveries.

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