Noteworthy News

IOM Rejects Basing Medicare Payments on Geography

Differences in Medicare spending in different parts of the country are mostly the result of differences in the use of post-acute care services and not mere geography, the Institute of Medicine has concluded.

The findings refute the assertion by members of Congress representing rural states that the hospitals they represent are underpaid by Medicare, and the IOM study was undertaken at Congress’s direction for that reason.

In the new report Variation in Health Care Spending:  Target Decision Making, Not Geography, the IOM wrote that

the majority of health care decisions are made at the provider or health care organization level, not by geographic units.  Adjusting payments geographically based on any aggregate or composite measure of spending or quality would unfairly reward low-value providers in high-volume regions and punish high-value providers in low-value reasons.

The IOM findings contradict previous assertions that geographic is the primary factor in Medicare spending – assertions advanced over the years primarily by the Dartmouth Institute for Health Policy.

The National Association of Urban Hospitals (NAUH) has long questioned the Dartmouth findings and has opposed past proposals to adjust Medicare payments based on geography.

Read more about the IOM’s findings in this New York Times article or find the study itself, along with summaries, briefing slides, data sets, and other materials, on the Institute of Medicine’s web siteiom_logo.

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