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Geographic Adjustment in Medicare Payment: Phase I: Improving Accuracy
Margaret Edmunds and Frank A. Sloan, Editors; Committee on Geographic
Adjustment Factors in Medicare Payment; Board on Health Care Services;
Institute of Medicine
This is the first of three reports to the Secretary of HHS and the U. S. Congress. This report focuses primarily on accuracy of measuring input prices for fee-for-service Medicare Part A and Part B payments. It includes a review of the data sources used to calculate the HWI and the GPCIs and for defining the payment areas used for each index, but does not include a review of the accuracy of payments to facilities other than short term acute care hospitals, such as skilled nursing facilities (SNFs) or home health agencies (HHAs).
Geographic adjustments are intended to improve the accuracy of Medicare payments to providers in various areas of the country, by accounting for the differences in prices for certain expenses (such as clinical and administrative staff salaries and benefits, rent, malpractice insurance, and other defined costs) from region to region. As a result, Medicare’s Inpatient Prospective Payment System (IPPS), other institutional prospective payment systems (other PPSs), and the Medicare physician fee schedule (PFS, or fee schedule) all employ geographic adjustment factors (GAFs).
Geographic Adjustment in Medicare Payment Phase I Improving Accuracy (2011).pdf
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