October 19, 2021

News

News Network

Medicare Physician Services: Payment Rates, Utilization, and Expenditures of Selected Services in Alaska, Hawaii, and the U.S. Territories

16 min read
<div>What GAO Found Using the most recently available Medicare data, GAO found that Medicare Part B fee-for-service (FFS) populations in Alaska, Hawaii, and the U.S. territories—American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI), Guam, Puerto Rico, and the U.S. Virgin Islands—varied considerably in size, demographic, and other key characteristics. For example, the number of beneficiaries enrolled in Part B FFS at any time in 2019 ranged from 2,091 in CNMI to 122,480 in Hawaii. In terms of Medicare eligibility, most Part B FFS beneficiaries nationally were eligible because they were age 65 or older (85.1 percent), followed by beneficiaries eligible due to a disability (14.6 percent), and beneficiaries with end stage renal disease (ESRD; 0.3 percent). However, the proportions varied across Alaska, Hawaii, and the territories. For example, the proportion of Part B FFS beneficiaries eligible because they were age 65 or older ranged from 71.9 percent in American Samoa to 92.4 percent in the U.S. Virgin Islands; due to a disability ranged from just over half the national rate in the U.S. Virgin Islands (7.4 percent) to 26.3 percent in American Samoa; and due to ESRD ranged from 0.2 percent in Alaska to 2.5 percent in Guam. GAO also analyzed Medicare payment rates—which are adjusted to account for local differences in the costs of providing care—for 12 selected services that each accounted for at least $950 million in Medicare expenditures in 2019. GAO found that Medicare payment rates (that reflect local adjustments) for selected services were higher in Alaska, Hawaii, and the territories compared to national rates (which do not reflect local adjustments). However, utilization of and expenditures for these services were generally lower. Specifically, payment rates in Alaska were considerably higher than the national payment rates, whereas payment rates in Hawaii and the territories were largely somewhat higher than the national payment rates for services examined. For example, payment rates for selected services in Alaska ranged from about 26 percent higher for an eye exam and treatment to about 39 percent higher for an emergency department visit. For Puerto Rico and the U.S. Virgin Islands, payment rates were less than 1 percent greater than the national payment amount. GAO analysis of 2019 Medicare Part B FFS claims data shows that utilization and expenditures for the 12 selected services in its review were generally lower in Alaska, Hawaii, and the territories when compared to national rates. For example, Alaska, Hawaii, and all U.S. territories had lower per beneficiary utilization of outpatient evaluation and management services under the Physician Fee Schedule than national per beneficiary utilization in 2019. Per beneficiary use for these services ranged from 1.1 services in American Samoa to 5.6 services in Hawaii, less than the national rate of 6.1 services. Partly due to lower per beneficiary utilization, per beneficiary expenditures for all selected services were also lower in Alaska, Hawaii, and the territories compared to national Part B FFS per beneficiary expenditures in 2019. Specifically, they ranged from about $183 in American Samoa to about $627 in Alaska, compared with national per beneficiary expenditures of about $735. Why GAO Did This Study Certain state and territory stakeholders have raised questions about payment rates under the Medicare Physician Fee Schedule for Alaska, Hawaii, and the territories. They noted that the rates might not take into account unique characteristics which may affect the delivery of care. The Centers for Medicare & Medicaid Services (CMS) determines payment rates for services covered under the Medicare Physician Fee Schedule based on estimates that the agency assigns to each service. These estimates reflect the time and intensity of provider work, practice expenses (e.g., cost of non-provider labor or office rent), and malpractice premiums needed to provide one service relative to other services. CMS separately adjusts the estimates to account for a provider’s geographic location, which affects the cost of providing care. House Report 116-62 includes a provision for GAO to examine Medicare funding for Alaska, Hawaii, and the U.S. territories. This report describes 1) demographic and other key characteristics of Medicare Part B FFS beneficiaries in Alaska, Hawaii, and the U.S territories; and 2) payment rates, utilization, and expenditures under the Physician Fee Schedule across these states and territories. GAO analyzed Medicare data from 2019—the most recent year of data available at the time of its review—to describe Medicare beneficiaries in Alaska, Hawaii, and the territories. GAO used the Medicare Physician Fee Schedule Search Tool to determine payment rates for the 12 selected services based on Medicare spending in 2019 and compared them to the national payment amount. GAO also analyzed Medicare claims data from 2019 to determine per beneficiary utilization and expenditures for Alaska, Hawaii, and the territories. GAO compared them to national Medicare per beneficiary utilization and expenditures. To supplement this work, GAO obtained information from health officials in the states and territories and examined key documents. For more information, contact Jessica Farb at (202) 512-7114 or FarbJ@gao.gov.</div>

What GAO Found

Using the most recently available Medicare data, GAO found that Medicare Part B fee-for-service (FFS) populations in Alaska, Hawaii, and the U.S. territories—American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI), Guam, Puerto Rico, and the U.S. Virgin Islands—varied considerably in size, demographic, and other key characteristics. For example, the number of beneficiaries enrolled in Part B FFS at any time in 2019 ranged from 2,091 in CNMI to 122,480 in Hawaii. In terms of Medicare eligibility, most Part B FFS beneficiaries nationally were eligible because they were age 65 or older (85.1 percent), followed by beneficiaries eligible due to a disability (14.6 percent), and beneficiaries with end stage renal disease (ESRD; 0.3 percent). However, the proportions varied across Alaska, Hawaii, and the territories. For example, the proportion of Part B FFS beneficiaries eligible

  • because they were age 65 or older ranged from 71.9 percent in American Samoa to 92.4 percent in the U.S. Virgin Islands;
  • due to a disability ranged from just over half the national rate in the U.S. Virgin Islands (7.4 percent) to 26.3 percent in American Samoa; and
  • due to ESRD ranged from 0.2 percent in Alaska to 2.5 percent in Guam.

GAO also analyzed Medicare payment rates—which are adjusted to account for local differences in the costs of providing care—for 12 selected services that each accounted for at least $950 million in Medicare expenditures in 2019. GAO found that Medicare payment rates (that reflect local adjustments) for selected services were higher in Alaska, Hawaii, and the territories compared to national rates (which do not reflect local adjustments). However, utilization of and expenditures for these services were generally lower. Specifically, payment rates in Alaska were considerably higher than the national payment rates, whereas payment rates in Hawaii and the territories were largely somewhat higher than the national payment rates for services examined. For example, payment rates for selected services in Alaska ranged from about 26 percent higher for an eye exam and treatment to about 39 percent higher for an emergency department visit. For Puerto Rico and the U.S. Virgin Islands, payment rates were less than 1 percent greater than the national payment amount.

GAO analysis of 2019 Medicare Part B FFS claims data shows that utilization and expenditures for the 12 selected services in its review were generally lower in Alaska, Hawaii, and the territories when compared to national rates. For example,

  • Alaska, Hawaii, and all U.S. territories had lower per beneficiary utilization of outpatient evaluation and management services under the Physician Fee Schedule than national per beneficiary utilization in 2019. Per beneficiary use for these services ranged from 1.1 services in American Samoa to 5.6 services in Hawaii, less than the national rate of 6.1 services.
  • Partly due to lower per beneficiary utilization, per beneficiary expenditures for all selected services were also lower in Alaska, Hawaii, and the territories compared to national Part B FFS per beneficiary expenditures in 2019. Specifically, they ranged from about $183 in American Samoa to about $627 in Alaska, compared with national per beneficiary expenditures of about $735.

Why GAO Did This Study

Certain state and territory stakeholders have raised questions about payment rates under the Medicare Physician Fee Schedule for Alaska, Hawaii, and the territories. They noted that the rates might not take into account unique characteristics which may affect the delivery of care. The Centers for Medicare & Medicaid Services (CMS) determines payment rates for services covered under the Medicare Physician Fee Schedule based on estimates that the agency assigns to each service. These estimates reflect the time and intensity of provider work, practice expenses (e.g., cost of non-provider labor or office rent), and malpractice premiums needed to provide one service relative to other services. CMS separately adjusts the estimates to account for a provider’s geographic location, which affects the cost of providing care.

House Report 116-62 includes a provision for GAO to examine Medicare funding for Alaska, Hawaii, and the U.S. territories. This report describes 1) demographic and other key characteristics of Medicare Part B FFS beneficiaries in Alaska, Hawaii, and the U.S territories; and 2) payment rates, utilization, and expenditures under the Physician Fee Schedule across these states and territories.

GAO analyzed Medicare data from 2019—the most recent year of data available at the time of its review—to describe Medicare beneficiaries in Alaska, Hawaii, and the territories. GAO used the Medicare Physician Fee Schedule Search Tool to determine payment rates for the 12 selected services based on Medicare spending in 2019 and compared them to the national payment amount. GAO also analyzed Medicare claims data from 2019 to determine per beneficiary utilization and expenditures for Alaska, Hawaii, and the territories. GAO compared them to national Medicare per beneficiary utilization and expenditures. To supplement this work, GAO obtained information from health officials in the states and territories and examined key documents.

For more information, contact Jessica Farb at (202) 512-7114 or FarbJ@gao.gov.

More from:

News Network

  • Two Doctors Charged in Illegal Opioid Distribution and Health Care Fraud Conspiracy
    In Crime News
    A federal grand jury in Kentucky returned an indictment Wednesday charging two doctors for their alleged involvement in conspiracies to illegally distribute opioids and commit health care fraud.
    [Read More…]
  • Extradición histórica lleva a miembros del ELN a Texas por narcoterrorismo y distribución internacional de cocaína
    In Justice News
    Dos presuntos miembros [Read More…]
  • Indian national pleads guilty to role in nationwide tech support refund scam
    In Justice News
    A 27-year-old Indian [Read More…]
  • Fulbright Program Partners with National Archives on New Heritage Science Fellowship
    In Crime Control and Security News
    Office of the [Read More…]
  • Florida Resident Pleads Guilty to Conspiracy to Falsify Clinical Trial Data
    In Crime News
    A Florida resident pleaded guilty to conspiring to falsify clinical trial data regarding an asthma medication, the Department of Justice announced today.
    [Read More…]
  • Secretary Antony J. Blinken and EU High Representative for Foreign Affairs and Security Policy and Vice President of the European Commission Josep Borrell Before Their Meeting
    In Crime Control and Security News
    Antony J. Blinken, [Read More…]
  • On Pride Month
    In Crime Control and Security News
    Antony J. Blinken, [Read More…]
  • Unmanned Aerial Vehicles: Changes in Global Hawk’s Acquisition Strategy Are Needed to Reduce Program Risks
    In U.S GAO News
    Global Hawk offers significant military capabilities to capture and quickly transmit high-quality images of targets and terrain, day or night, and in adverse weather--without risk to an onboard pilot. Global Hawk first flew in the late 1990s as a demonstrator and supported recent combat operations in Afghanistan and Iraq. In 2001, the Air Force began an acquisition program to develop and produce improved Global Hawks. In 2002, the Department of Defense (DOD) restructured and accelerated the program to include a new, larger and more capable air vehicle. GAO was asked to review the program and discuss (1) the restructuring's effect on the Air Force's ability to deliver new capabilities to the warfighter and (2) whether its current business case and management approach is knowledge-based and can help forestall future risks.The restructuring of the Global Hawk program impacts the acquisition program in multiple ways. More and accelerated funding: Funding, which previously spanned 20 years, now is compressed in about half the time. The restructured plan requires $6.3 billion through fiscal year 2012; the original plan would have needed $3.4 billion by that time. The budget request is now three times higher for some years. Immature technologies: Several critical technologies needed to provide the advanced capabilities are immature and will not be tested on the new air vehicle until late in the program, after which most of the air vehicles will already have been bought. New requirements, new costs: DOD's desire to add additional Global Hawk capabilities tripled development costs. The program acquisition unit cost increased 44 percent since program start, yet fewer vehicles are to be produced than originally planned. Challenges, trade-offs, and delays: The addition of new capabilities has led to space, weight, and power constraints for the advanced Global Hawk model. These limitations may result in deferring some capabilities. Some key events and activities--many related to testing issues--have been delayed. Global Hawk's highly concurrent development and production strategy is risky and runs counter in important ways to a knowledge-based approach and to DOD's acquisition guidance. The restructuring caused gaps in product knowledge, increasing the likelihood of unsuccessful cost, schedule, quality, and performance outcomes. Because the restructured program is dramatically different from the initial plan for the basic model, the business case now seems out of sync with the realities of the acquisition program.
    [Read More…]
  • Election of Fiame Naomi Mata’afa as Prime Minister of Samoa
    In Crime Control and Security News
    Ned Price, Department [Read More…]
  • Acting Deputy Attorney General John Carlin Delivers Remarks on Domestic Terrorism
    In Crime News
    Thank you, Marc. Before I begin, I’d like to address an important issue: the reports of horrific attacks on Asian Americans across the country. I want to be clear here: No one in America should fear violence because of who they are of what they believe. Period. These types of attacks have no place in our society. We will not tolerate any form of domestic terrorism or hate-based violent extremism, and we are committed to putting a stop to it.
    [Read More…]
  • Owner of Bitcoin Exchange Sentenced to Prison for Money Laundering
    In Crime News
    A Bulgarian national who was convicted by a federal jury for his role in a transnational and multimillion-dollar scheme to defraud American victims was sentenced today to 121 months in prison.
    [Read More…]
  • Jury Convicts Medical Equipment Company Owners of $27 Million Fraud
    In Crime News
    A federal jury convicted Dallas area owners and operators of two durable medical equipment companies Thursday of one count of conspiracy to defraud the United States and to pay and receive health care kickbacks and one count of conspiracy to commit money laundering.
    [Read More…]
  • United States Announces Humanitarian Assistance for Ukraine
    In Crime Control and Security News
    Antony J. Blinken, [Read More…]
  • U.S. Government Launches First One-Stop Ransomware Resource at StopRansomware.gov
    In Crime News
    Today, as part of the ongoing response, agencies across the U.S. government announced new resources and initiatives to protect American businesses and communities from ransomware attacks.
    [Read More…]
  • Attorney General William P. Barr Announces Publication of Cryptocurrency Enforcement Framework
    In Crime News
    Attorney General William P. Barr announced today the release of “Cryptocurrency: An Enforcement Framework,” a publication produced by the Attorney General’s Cyber-Digital Task Force.  The Framework provides a comprehensive overview of the emerging threats and enforcement challenges associated with the increasing prevalence and use of cryptocurrency; details the important relationships that the Department of Justice has built with regulatory and enforcement partners both within the United States government and around the world; and outlines the Department’s response strategies. 
    [Read More…]
  • Military Operations: DOD Needs to Address Contract Oversight and Quality Assurance Issues for Contracts Used to Support Contingency Operations
    In U.S GAO News
    The Department of Defense (DOD) uses contractors to meet many of its logistical and operational support needs. With the global war on terrorism, there has been a significant increase in deployment of contractor personnel to areas such as Iraq and Afghanistan. In its fiscal year 2007 report, the House Appropriations Committee directed GAO to examine the link between the growth in DOD's operation and maintenance costs and DOD's increased reliance on service contracts. GAO determined (1) the extent to which costs for selected contracts increased and the factors causing the increases, (2) the extent to which DOD provided oversight for selected contracts, and (3) the reasons for DOD's use of contractors to support contingency operations. To address these objectives, GAO reviewed a nonprobability sample of seven DOD contracts for services that provide vital support to contingency operations in Iraq and Afghanistan. GAO reviewed contract requirements, funding documents and DOD guidance for these contracts and interviewed DOD and contractor personnel.Costs for six of the seven contracts GAO reviewed increased from an initial estimate of $783 million to about $3.8 billion, and one consistent and primary factor driving the growth was increased requirements associated with continued military operations in Iraq and Afghanistan. For example, the Army awarded a $218.2 million task order for equipment maintenance and supply services in Kuwait in October 2004. Since then, approximately $154 million of additional work was added to this task order for vehicle refurbishment, tire assembly and repair, and resetting of prepositioned equipment. Other factors that increased individual contract costs include the use of short-term contract extensions and the government's inability to provide contractually required equipment and services. For example, in three of the contracts GAO reviewed, short-term contract extensions (3 to 6 months) increased costs because the contractor felt it was too risky to obtain long-term leases for vehicles and housing. The actual cost of one contract we reviewed did not exceed the estimated cost for reasons such as lower than projected labor rates. GAO has frequently reported that inadequate staffing contributed to contract management challenges. For some contracts GAO reviewed, DOD's oversight was inadequate because it had a shortage of qualified personnel and it did not maintain some contract files in accordance with applicable guidance. For five contracts, DOD had inadequate management and oversight personnel. In one case, the office responsible for overseeing two contracts was short 6 of 18 key positions, all of which needed specialized training and certifications. In addition, for two other contracts, proper accounting of government owned equipment was not performed because the property administrator position was vacant. Second, DOD did not always follow guidance for maintaining contract files or its quality assurance principles. For four contracts, complete contract files documenting administration and oversight actions taken were not kept and incoming personnel were unable to determine how contract management and oversight had been performed and if the contractor had performed satisfactorily prior to their arrival. In addition, oversight was not always performed by qualified personnel. For example, quality assurance officials for the linguist contract were unable to speak the language so they could not judge the quality of the contractor's work. Without adequate levels of qualified oversight personnel, proper maintenance of contract files, and consistent implementation of quality assurance principles, DOD may not be able to determine whether contractors are meeting their contract requirements, which raises the potential for waste. DOD used contractors to support contingency operations for several reasons, including the need to compensate for a decrease in force size and a lack of capability within the military services. For example, an Army contract for linguist services had a requirement for more than 11,000 linguists because DOD did not have the needed linguists. According to Army officials, the Army phased out many interpreter positions years ago and did not anticipate a large need for Arabic speakers.
    [Read More…]
  • Saint Lucia Independence Day
    In Crime Control and Security News
    Antony J. Blinken, [Read More…]
  • Private Health Coverage: Results of Covert Testing for Selected Sales Representatives Listed on Healthcare.gov
    In U.S GAO News
    What GAO Found Since 2014, millions of consumers have purchased individual market health insurance plans through the health insurance exchanges—or marketplaces—established under the Patient Protection and Affordable Care Act (PPACA). Sales representatives listed on Department of Health and Human Services' (HHS) healthcare.gov website can also sell other types of health coverage arrangements that may cost less but may not cover all pre-existing conditions as comprehensive PPACA-compliant plans do. GAO performed 31 covert tests on selected sales representatives listed on healthcare.gov. These tests involved stating that the (fictitious) applicant had pre-existing conditions—either diabetes or heart disease—and requesting coverage for these conditions to see if the sales representative directed the applicant to a comprehensive PPACA-compliant plan or a PPACA-exempt plan that does not cover what the fictitious applicant requested. As part of these tests, GAO gauged whether the selected sales representatives engaged in potentially deceptive practices, such as making false or misleading statements about coverage or omitting material information about coverage. All 31 sales representatives GAO contacted appropriately referred GAO's fictitious applicant to a PPACA-compliant plan. The majority of sales representatives also explained that a PPACA-exempt plan would not cover the applicant's pre-existing condition. None of the sales representatives GAO contacted engaged in potentially deceptive marketing practices that misrepresented or omitted information about the products they were selling. The results of GAO's covert tests are not generalizable to all sales representatives listed on healthcare.gov. Why GAO Did This Study PPACA directed each state to establish an exchange—referred to as a state-based exchange—or elect to use the federally facilitated exchange established by HHS. Each year the exchanges offer an open enrollment period during which eligible consumers may enroll in or change their coverage. Consumers enroll in the federally facilitated exchange through HHS's healthcare.gov website, and some state-based exchanges have chosen to use this website for enrollment. While individual health insurance coverage is generally regulated by states, starting in 2014, PPACA established a number of new federal requirements for individual health insurance coverage. For example, PPACA prohibited insurers from excluding coverage or charging higher premiums for pre-existing conditions. HHS regulations also require sales representatives that assist with or facilitate enrollment in PPACA-compliant plans sold through healthcare.gov to provide consumers with correct information, without omission of material fact, and refrain from marketing or conduct that is misleading. Sales representatives that are listed on healthcare.gov may also sell other types of health coverage arrangements that do not have to comply with some or all of PPACA's individual market requirements. As a result, the arrangements may be less expensive, but offer fewer benefits compared to PPACA-compliant plans. PPACA-exempt health coverage arrangements may be attractive to consumers, particularly those who find it difficult to afford PPACA-compliant plans. However, such arrangements generally do not need to follow PPACA's requirement that plans in the individual market be presented to consumers in defined categories outlining the extent to which they are expected to cover medical care. As a result, depending on how they are marketed and sold, PPACA-exempt arrangements could present risks for consumers, if, for example, they buy these plans mistakenly believing that coverage is as comprehensive as for PPACA-compliant plans. GAO was asked to obtain insights on the marketing and sales practices of sales representatives specifically listed on healthcare.gov. In this report, GAO describes the results of covert tests it conducted involving selected sales representatives listed on healthcare.gov when contacted by GAO undercover investigators posing as individuals needing to purchase health insurance to cover pre-existing conditions. GAO investigators performed these covert tests (i.e., undercover phone calls) from November 2020 to February 2021. GAO also discussed the oversight of PPACA-exempt arrangements with senior officials from the Centers for Medicare & Medicaid Services within HHS, as well as officials from the National Association of Insurance Commissioners, and reviewed information they provided. For more information, contact Seto J. Bagdoyan at (202) 512- 6722 or bagdoyans@gao.gov or Howard Arp at arpj@gao.gov.
    [Read More…]
  • Serbian Founder of Digital-Asset Companies Indicted in International Cryptocurrency Scheme
    In Crime News
    A Serbian man was charged in an indictment today for his alleged participation in a coordinated cryptocurrency scheme in which he solicited U.S. investors using two fraudulent online investment platforms.
    [Read More…]
  • Special Guest Remarks at Ocean-climate Ambition Summit
    In Climate - Environment - Conservation
    John Kerry, Special [Read More…]
Network News © 2005 Area.Control.Network™ All rights reserved.