Development of a Model for the Validation of Work Relative Value Units for the Medicare Physician Fee Schedule.

The Centers for Medicare & Medicaid Services (CMS) uses the resource-based relative value scale to pay physicians and other practitioners for professional services. The work values measure the relative levels of professional time and intensity (physical effort, skills, and stress) associated with providing services. CMS asked RAND to develop a model to validate the work values using external data sources. RAND's goal was to test the feasibility of using external data and regression analysis to create prediction models to validate work values. Data availability limited the models to surgical procedures and selected medical procedures typically performed in an operating room. Key findings from the study include the following: RAND estimates of intra-service time using external data are typically shorter than the current CMS estimates. Model assumptions about how shorter intra-service times affect procedure intensity have implications for the work estimates. RAND estimates for work on average were similar to current work values if shorter intra-service time is assumed to increase procedure intensity and were on average up to 10 percent lower than current work values if shorter intra-service time is assumed to not impact on procedure intensity. The RAND estimates could be used for two key applications: CMS could flag codes as potentially misvalued if the RAND estimates are notably different from the current CMS values. CMS could also use the RAND estimates as an independent estimate of the work values. In some cases, further review will identify a clinical rationale for why a code is valued differently than the RAND model predictions.

Medicare Imaging Demonstration Final Evaluation: Report to Congress.

Increasing use of advanced medical imaging is often cited as a key driver of cost growth in medical spending. In 2011, the Medicare Imaging Demonstration from the Centers for Medicare & Medicaid Services began testing whether exposing ordering clinicians to appropriateness guidelines for advanced imaging would reduce ordering inappropriate images. The evaluation examined trends in advanced diagnostic imaging utilization starting January 1, 2009-more than two years before the beginning of the demonstration-to November 30, 2013-two months after the close of the demonstration. Small changes in ordering patterns were noted, but decision support systems were unable to assign appropriateness ratings to many orders, thus limiting the potential effectiveness of decision support. Many opportunities to refine decision support systems have been identified.

How Will the Patient Protection and Affordable Care Act Affect Liability Insurance Costs?

The Patient Protection and Affordable Care Act (ACA) will greatly expand private coverage and Medicaid while making major changes to payment rates and the health care delivery system. These changes will affect traditional health insurers, individuals, and government payers. In addition, a considerable amount of health care is paid for directly by or is indirectly paid for via legal settlements after the care occurs, by liability insurers. This study identifies potential mechanisms through which the ACA might affect claim costs for several major types of liability coverage, especially auto insurance, workers' compensation coverage, and medical malpractice. The authors discuss the conceptual basis for each mechanism, review existing scholarly evidence regarding its importance, and, where possible, develop rough estimates of the size and direction of expected impacts as of 2016. They examine how each mechanism might operate across different liability lines and discuss how variation across states in legal rules, demographics, and other factors might moderate each mechanism's operation. Overall, expected short-term effects of the ACA appear likely to be small relative to aggregate liability insurer payouts in the markets in question. However, under reasonable assumptions, some mechanisms can generate potential cost changes as high as 5 percent or more in particular states and insurance lines. The authors also discuss longer-run changes that could be fostered by the ACA that might exert more significant effects on insurance claim costs, including shifts in tort law, changes in physician supply, new pricing approaches under the accountable care organization model, and changes in population health.