IOM Questions Desirability of Medicare Payments Based on Geography
Adjusting Medicare payments to hospitals based on where they are located is not necessarily a good idea, according to the Institute of Medicine (IOM).
While some states unquestionably have higher costs, a new IOM preliminary report notes that providers, not states, make health care decisions and that financial incentives to manage costs more effectively should be directed at individual providers, not at geographic areas.
The IOM study of the potential of adjusting Medicare payments based on geography was undertaken at the request of Health and Human Services Secretary Kathleen Sebelius in 2010.
The National Association of Urban Hospitals (NAUH) has long opposed adjusting Medicare payments based on geography.