Medicaid reimbursement of teaching hospitals

This paper examines current Medicaid policies on the reimbursement of hospitals' medical education expenses. These policies are of interest because of the pressure on Medicaid programs to reduce expenditures. Data for the paper come mainly from two sources: a survey of Medicaid programs and a survey of teaching hospitals. Teaching hospitals receive a disproportionate share, nearly 70 percent in 1978, of Medicaid short-term hospital payments. Nevertheless, most Medicaid programs either have no explicit policies in this area or have not acted aggressively to limit reimbursement of hospitals' teaching expenses. Revenues from Medicaid are most important to public teaching hospitals. Thus, across-the-board reductions in Medicaid's reimbursement of teaching expenses would most severely affect public institutions, many of which already face cuts in their local government appropriations. Savings to Medicaid would also be short-lived, since teaching hospitals would have the incentive to reduce teaching program size and substitute reimbursable personnel (nurses and staff physicians) for residents.     

Medicaid program; State share of financial participation--HCFA. Interim final rule with comment

Under certain circumstances, States are currently permitted to use voluntary contributions (donated funds) from providers and all revenues from State-imposed taxes, as the State share of the costs of the Medicaid program. There is now widespread use of State donations or other voluntary provider payment programs that unfairly affect the Federal share of Federal Financial Participation (FFP). This practice circumvents the States' statutory obligation to expend funds for medical assistance. Therefore, effective January 1, 1992, this interim final rule requires that the amount of funds donated from Medicaid providers be offset from Medicaid expenditures incurred on or after this date before calculating the amount of FFP in Medicaid expenditures. It also interprets section 4701(b)(2) of the Omnibus Budget Reconciliation Act of 1990, which added section 1903(i)(10) to the Social Security Act. Section 1903(i)(10), precludes Federal Financial Participation (FFP) in State payments to hospitals, nursing facilities, and intermediate care facilities for the mentally retarded for facility expenditures that are attributable to provider-specific State taxes.     

Payment for non-VA physician services associated with either outpatient or inpatient care provided at non-VA facilities--VA. Proposed rule

This document proposes to amend Department of Veterans Affairs (VA) medical regulations concerning payment for non-VA physician services that are associated with either outpatient or inpatient care provided to eligible VA beneficiaries at non-VA facilities. We propose that when a service specific reimbursement amount has been calculated under Medicare's Participating Physician Fee Schedule, VA would pay the lesser of the actual billed charge or the calculated amount. We also propose that when an amount has not been calculated, VA would pay the amount calculated under a 75th percentile formula or, in certain limited circumstances, VA would pay the usual and customary rate. In our view, adoption of this proposal would establish reimbursement consistency among federal health benefits programs, would ensure that amounts paid to physicians better represent the relative resource inputs used to furnish a service, and, would, as reflected by a recent VA Office of Inspector General (OIG) audit of the VA fee-basis program, achieve program cost reductions. Further, consistent with statutory requirements, the regulations would continue to specify that VA payment constitutes payment in full.     

Payment for non-VA physician services associated with either outpatient or inpatient care provided at non-VA facilities--VA. Final rule

This document amends Department of Veterans Affairs (VA) medical regulations concerning payment for non-VA physician services that are associated with either outpatient or inpatient care provided to eligible VA beneficiaries at non-VA facilities. Generally, when a service-specific reimbursement amount has been calculated under Medicare's Participating Physician Fee Schedule, VA would pay the lesser of the actual billed change or the calculated amount. Also, when an amount has not been calculated or when the services constitute anesthesia services, VA would pay the amount calculated under a 75th percentile formula or, in certain limited circumstances, VA would pay the usual and customary rate. Adoption of this final rule is intended to establish reimbursement consistency among federal health benefits programs to ensure that amounts paid to physicians better represent the relative resource inputs used to furnish a service, and to achieve program cost reductions. Further, consistent with statutory requirements, the regulations continue to specify that VA payment constitutes payment in full.     

Medicare program; changes to the inpatient hospital prospective payment system and fiscal year 1991 rates--HCFA. Final rule

We are revising the Medicare inpatient hospital prospective payment system to implement necessary changes arising from legislation and our continuing experience with the system. In addition, in the Addendum to this final rule, we are describing changes in the amounts and factors necessary to determine prospective payment rates for Medicare inpatient hospital services. In general, these changes are applicable to discharges occurring on or after October 1, 1990. We also set forth rate-of-increase limits for hospitals and hospital units excluded from the prospective payment system. This final rule also responds to comments received concerning changes to hospital payments made in an April 20, 1990 final rule with comment. These changes include mid-year changes to the inpatient hospital prospective payment system that implemented provisions of the Omnibus Budget Reconciliation Act of 1989; and adjustments applicable to prospective payment hospitals and to the target amounts of hospitals and units excluded from the prospective payment system due to the elimination of the day limitation on covered inpatient hospital days made by the Medicare Catastrophic Coverage Act of 1988 and later repealed by provisions in the Medicare Catastrophic Repeal Act of 1989. The April 20, 1990 final rule with comment also incorporated changes to these provisions made by the Family Support Act of 1988, which clarified the criteria for adjusting the target amounts and implementation date. In addition, this final rule clarifies the documentation requirements necessary to support the cost allocation of teaching physicians and the allowability of costs for rotating residents in determining payment for the direct costs of an approved graduate medical education program. This clarification is being made as a result of a September 29, 1989 final rule that made changes in Medicare policy concerning payment for the direct graduate medical education costs of providers associated with approved residency programs in medicine, osteopathy, dentistry, and podiatry.     

The politics of discretionary Medicaid spending, 1980-1993

Why do some states choose to spend more than four times as much as others to provide health care to the disadvantaged? Political scientists who have traditionally explored this question by analyzing trends in overall Medicaid expenditures lumped states' discretionary spending in with other money that states are mandated to spend. Analyses of total expenditures found that socioeconomic factors drove spending but that party control of state legislatures made no difference in health policy making. By isolating discretionary state Medicaid expenditures from total spending figures, I reexamine the influences of political as well as economic and demographic factors. The often-doubted importance of party control becomes clear. This study investigates spending patterns in the discretionary portions of state Medicaid programs in forty-six states from 1980 to 1993 and analyzes both incremental program changes and absolute differences in state spending. To discover how greatly the researcher's choice of dependent variables can affect results, optional spending is separated from total spending levels and the variation is modeled in both. Focusing not on the spending that the federal government requires of state officials but on the policies that state officials actually choose allows a balanced exploration of both political and economic effects on welfare expenditures. This research also provides new insights about which forces will shape policy decisions if more and more control of the public health care system is devolved to the states.     

The politics of hospital payment

This paper analyzes the politics of hospital payment over the last decade. The authors explain how provider interests and judgments became a standard for appropriate hospital payment: the impact of that standard on hospital costs; and the political obstacles to imposing an alternative standard and controlling hospital costs. The authors draw lessons from this experience, here and in other countries, to propose an alternative approach to hospital payment that would allow policymakers, accountable to the public, to make explicit choices about the level and nature of hospital expenditures.     

Medicaid myths: trends in Medicaid expenditures and the prospects for reform

Medicaid expenditures, which had reached more than +32 billion by 1981, have grown substantially throughout the program's history. As a result, the conventional wisdom is that Medicaid expenditures represent a significant public-policy problem. Using other measures, however, it can be shown that the program is much less of a problem than it appears to be. By 1981, spending for Medicaid represented only 12.7 percent of total state spending and had contributed only 14.2 percent to the overall growth in state expenditures since 1965. Moreover, considering only the funds which states raise from in-state sources, the median share of state budgets accounted for by Medicaid was just 5.6 percent, and only 7 states spent as much as 9 percent of their own money on the program. These figures suggest that the marginal reductions in Medicaid expenditures which would result from typical program changes are likely to be so small that rational state officials might be unwilling to incur the political opposition of powerful provider groups or the resistance of large state bureaucracies by proposing substantial reforms. The major exceptions are the few states with very large programs where even small proportional savings would amount to millions of dollars. We conclude that, given its present federal-state form and the current distribution of expenditures, it is unlikely that major reforms will be enacted because the stakes are too small for most states and the federal interest is too diffused.     

A Theoretical Model of Drug/DUI Courts: An Application of Structural Ritualization Theory

Past studies of Drug/DUI courts primarily focused on outcome evaluation and policy-driven issues, but lacked an effective theoretical framework for understanding drug court programs, in particular the interaction between the program and clients. In this study, we apply structural ritualization theory (SRT) to the Drug/DUI program and argue that such programs serve two key functions, to disrupt clients’ old rituals (e.g., drug/alcohol abuse, committing crimes), and to help lay a foundation for building new abstinent and noncriminal ritualized practices for clients both in and after the drug court program. We further argue that the effectiveness of drug program functions and services at the organizational level and the success of clients’ transformation at the individual level can be empirically measured and studied by four elements of SRT, including salience, repetitiveness, homologousness, and resources. Policy implications are drawn based on the contribution of SRT.     

From shared cost to block funding and beyond: the politics of health insurance in Canada

This paper takes as its starting point recent major changes in arrangements between the federal and provincial government in Canada concerning the sharing of costs for health insurance programs. The switch from a shared cost (conditional grant) to a modified block funding system was motivated by federal desires to limit and make predictable their expenditures, by provincial desires to increase the flexibility of their allocation of funds and by a mutual desire to limit any growth of health care costs as a proportion of GNP. Concerns related directly to improving medical care delivery were insignificant The changes will effectively centralize responsibility for program financing and program delivery, thus providing a powerful incentive for provincial governments to apply very strong measures to control costs. For reasons largely external to the relationship between public sector insurers and the suppliers of medical services, these attempts are unlikely to be successful in the short run. The probable impact of this difficulty on government and members of the health care delivery system is assessed.     

Are counter-terrorism strategies effective? The results of the Campbell systematic review on counter-terrorism evaluation research

The events of September 11th have led to massive increases in personal, commercial, and governmental expenditures on anti-terrorism strategies, as well as a proliferation of programs designed to fight terrorism. These increases in spending and program development have focused attention on the most significant and central policy question related to these interventions: Are these programs effective? To explore this question, this study reports the results of a Campbell Collaboration systematic review on evaluation research of counter-terrorism strategies. Not only did we discover an almost complete absence of evaluation research on counter-terrorism interventions, but from those evaluations that we could find, it appears that some interventions either did not achieve the outcomes sought or sometimes increased the likelihood of terrorism occurring. The findings dramatically emphasize the need for government leaders, policy makers, researchers, and funding agencies to support both outcome evaluations of these programs as well as efforts to develop an infrastructure to foster counter-terrorism evaluation research.     

Elements Needed for Quality Batterer Intervention Programs: Perspectives of Professionals Who Deal with Intimate Partner Violence

Batterers intervention programs (BIPs) constitute a primary intervention for perpetrators of intimate partner violence (IPV). There is little understanding as to what elements are necessary for a good intervention program. We conducted 36 individual semi-structured interviews with professionals working with BIPs. Our results yielded three thematic categories: (1) optimal BIP structure—group size and program duration should foster change and interaction, (2) facilitator characteristics—co-facilitation is ideal, and facilitators should have IPV training, and (3) program approaches–programs should challenge their clients on their behavior, promote an environment of safety and openness, and strive to adapt to clients.     

Amendment of the fee exemption for federal, state and local government employees--DEA, Justice. Final rule

This final rule limits the exemption from payment of application fees for registration or reregistration to Federal, state, or local government operated hospitals or institutions. This will eliminate the need for DEA to dedicate manpower or other resources to controlling abuse of the fee exempt status.     

Capital cost reimbursement to community hospitals under Federal health insurance programs

Issues in current capital cost reimbursement to community hospitals by Medicare and Medicaid are described, and options for change analyzed. Major reforms in the way the federal government pays for capital costs--in particular substitution of other methods of payment for existing depreciation reimbursement--could have significant impact on the structure of the health care system and on government expenditures. While such reforms are likely to engender substantial political opposition, they may be facilitated by broader changes in the reimbursement system.     

Is the doctor in? The evolving role of organized medicine in health policy

Until recently, physicians were viewed as the dominant player in health policy. Now, however, they compete with many other effective interest groups. This article analyzes this changing role, and specifically how organized medicine has changed its approach to influencing health policy. The essay begins with a review of the reasons for the growth and subsequent decline of physicians' influence. This is followed by a case study of physician payment reform under Medicare, which illustrates the ways in which organized medicine chooses when and when not to cooperate with government. The article concludes with a discussion of where physicians are likely to continue to be influential in future health policy reform. Three such areas are noted: payment policy, quality and clinical innovation, and medical education and training.     

Effects of Motivational Enhancement on Immediate Outcomes of Batterer Intervention

This article presents results of a quasi-experimental trial of a 6 week motivation enhancing intervention for batterers highly resistant to intervention. One hundred and forty one (29%) highly resistant batterers were identified from a consecutive sample of 486 men referred to a large batterer intervention program. Resistant batterers attended either standard intervention (16 weeks) or a specialized 6 week motivation enhancing group followed by 10 weeks of standard intervention. Observation of counselor behaviors confirmed significant differences in rates of confrontation across groups. Analyses of immediate program outcomes provide some support for the value of motivation enhancing intervention. Resistant batterers who attended specialized intervention completed intervention at a significantly higher rate (84.2%) than both resistant clients in standard intervention (46.5%) and non-resistant clients (61.1%). Differences were maintained even after controlling for demographic and lifestyle related predictors of attrition. Advantages of specialized intervention did not extend to counselor-rated success at meeting core treatment goals. Discussion focuses on the implications of these results for the use of motivation enhancing intervention strategies to improve attendance at batterer intervention programs.     

Local Governance and Redistributive Policy: Explaining Local Funding for Public Defense

In many American states, public defense is provided at the county rather than state level (Langton & Farole 2009 ). Local governments have discretion over implementing and funding the right to counsel, resulting in considerable variability in programs and funding levels. Placing this issue in the theoretical context of redistributive policies and politics, we investigate decisions on funding this service across upstate New York counties. Using as a point of departure Paul Peterson's classic explication of community politics, we first model variation in funding as a function of counties' fiscal capacity, need for services, and costs of supplying legal representation. We also test Peterson's prediction that local political factors will play little if any role in budget decisions. Second, through interviews with program administrators we explore the characters of twelve defender programs in which expenditures departed from the model's predictions. We find that three factors—which we term “influence,” “infrastructure,” and “ideas"”—also vary directly with levels of funding. We conclude with a discussion of the implications of these findings for theoretical thinking about due process policies and local politics, and for policy debate over how best to ensure adequate counsel in criminal court.     

Speech, privacy, and the power of the purse: lessons from the abortion "gag rule" case.

In Rust v. Sullivan, 59 U.S.L.W. 4451 (1991), the US Supreme Court ruled that neither the privacy interests of family planning clients nor the 1st Amendment interests of their counselors prevented the government from banning all discussion of abortions in federally funded family planning clinics. In doing so, the Court also reaffirmed its view that the state and federal legislatures have virtually unlimited discretion in limiting or conditioning social welfare programs, a view having even greater long-term implications for American health policy than the implications of Rust for the constitutional protection of abortion. Rust upheld the Department of Health and Human Services' 1988 directive prohibiting the use of any funds from Title X of the Public Health Service Act (authorizing family planning programs) in programs where abortion is a method of family planning. This means that a clinician may lawfully respond to a client's inquiry about abortion only with a denial that abortion is an option. Thus, while allowing women the constitutional protection to chose an abortion, the Court has allowed the legislature to freely use the power of the purse to discourage or prevent the choice of abortion. Rust's greatest impact may well be in its acceptance of the enormous power wielded by the government over funded activities, especially in health policy. Justice Rehnquist believes there is not constitutional right to health, welfare, or any other government benefit; the legislative branches of the government cannot be required by judicial interpretation of the Constitution to provide any particular benefit or service to anyone. Even when the government chooses to fund a particular benefit, it is free to condition that benefit with virtually no judicially enforceable limits on that discretion.     

TRICARE; Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); bonus payments in medically underserved areas. Final rule

This final rule implements a bonus payment, in addition to the amount normally paid under the allowable charge methodology, to physicians in medically underserved areas. For purposes of this rule, medically underserved areas are the same as those determined by the Secretary of Health and Human Services for the Medicare program. Such bonus payments shall be equal to the bonus payments authorized by Medicare, except as necessary to recognize any unique or distinct characteristics or requirements of the TRICARE program, and as described in instructions issued by the Executive Director, TRICARE Management Activity. This rule promotes a reimbursement enhancement to a limited number of physicians designed to increase TRICARE beneficiary access to care.     

Physicians as gatekeepers: illness certification as a rationing device

Illness or disability is often used as an eligibility criterion by public programs that distribute money, services, privileges, and exemptions. Physicians then play a central role in the allocation process. But physicians are caught between a large pool of applicants who want some benefit, on the one hand, and an organization with limited resources to distribute, on the other hand. Three conflicts are engendered in this gatekeeping role: the tension between trusting and mistrusting information provided by the patient, the tension between erring on the false positive side and the false negative side in diagnostic decision-making, and the tension between doing everything possible for each patient and allocating limited resources among several needy clients. Several non-medical factors influence the ultimate outcome of this allocation process, which, in theory, rests on clinical decision-making: the specificity and restrictiveness of the formal definitions of illness and disability used by a program; the structure of the determination process; the overall policy of the organization on distribution of benefits; and the ability of the organization to use administrative review, direct incentives, and written standards to control the certifying behavior of physicians.