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IOM Study of Medicare’s Geographic Adjustments

The Institute of Medicine (IOM) August 20 released details related to the first of two geographic variation studies commissioned by HHS Secretary Sebelius.  The first study will comprise two separate reports.  The first, which is expected in spring 2011, will evaluate the accuracy of Medicare’s geographic adjustment factors and the methodology and data used to calculate them.  The second, expected in spring 2012, will evaluate the effects of Medicare adjustments on: the distribution of the health care workforce; quality of care; population health; and the ability to provide efficient, high-value care. 

The committee membership includes:

Frank A. Sloan, Ph.D., Duke University (chair);

Jon B. Christianson, Ph.D., University of Minnesota, Minneapolis;

Stuart Guterman, M.A., The Commonwealth Fund;

Judith K. Hellerstein, Ph.D., University of Maryland, College Park;

Carlos R. Jaen, M.D., Ph.D., FAAFP, University of Texas Health Science Center;

Meridean L. Mass, Ph.D., The University of Iowa;

Marilyn Moon, Ph.D., American Institutes for Research;

Cathryn L. Nation, M.D., University of California Office of the President;

Thomas C. Ricketts, Ph.D., M.P.H., The University of North Carolina at Chapel Hill;

Jane E. Sisk, Ph.D., M.A., Centers for Disease Control and Prevention;

Bruce Steinwald, M.B.A., Independent Consultant;

David Vlahov, Ph.D., R.N., New York Academy of Medicine;

M. Roy Wilson, M.D., M.S., University of Colorado at Denver;

Barbara O. Wynn, M.A., The RAND Corporation;

Alan M. Zaslavsky, Ph.D., Harvard Medical School; and

Stephen Zuckerman, Ph.D., The Urban Institute. 

As described in the IOM announcement, the committee will hold its first meeting on September 16-17 and will include public sessions.  Stakeholder input will be encouraged through presentations at open meetings and submission of written materials for the committee’s consideration.  

IOM Study of Variations in Medicare Volume, Intensity, and Spending: The IOM has not yet released information about the second geographic variation study commissioned by HHS Secretary Sebelius.  The second study will evaluate variations in the volume and intensity of services and health care spending.

National Summit on Geographic Variation, Cost, Access, and Value in Health Care: In a written agreement (letter) with Congressional Members of the Quality Care Coalition, HHS Secretary Sebelius committed to convening a National Summit on Geographic Variation, Cost, Access, and Value in Health Care “later this year.”  As described in the letter, the Summit will bring together policymakers and experts to think through the best ways to move forward in adjusting payment systems so they better account for geographic variation, while maintaining access and quality of care in all areas.  As of press time, no further information was available about the National Summit. 

Value-Based Payment Modifier for Medicare Payments: Included in ACA (P.L. 111-148 and P.L. 111-152) are value provisions creating a value-based modifier for physician payments and a hospital value based purchasing (VBP) program.

Special Medicare Payments for Low-Cost Counties: ACA establishes special payments for certain hospitals located in counties with low levels of Medicare spending.  The payments, totaling $400 million, are available in FYs 2011 and 2012. 

The AAMC continues to monitor proposals intended to identify and reduce geographic variations in Medicare spending.  The AAMC believes Congress should fully review and identify the many drivers of variations (e.g., income, race, previous coverage status) before taking any actions related to spending and resource use. 

On Government Affairs

Testimony and Correspondence

External Resources