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Pr
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Medicare is the nation’s health insurance program for the aged, disabled, and persons with End
Stage Renal Disease (ESRD). Part A of the program, the Hospital Insurance program, covers
hospital, post-hospital, and hospice services. Part B, the Supplementary Medical Insurance
program, covers a broad range of complementary medical services including physician,
laboratory, outpatient hospital services, and durable medical equipment. Part C provides private
plan options for beneficiaries enrolled in both Parts A and B. The Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (MMA) added Part D to Medicare, which provided
a new outpatient prescription drug benefit starting January 1, 2006.
Medicare has established specific rules for payment of covered benefits under Parts A, B, and C.
Some, such as physician services and most durable medical equipment, are based on fee
schedules. Some payments are based, in part, on a provider’s bid (an estimate of the cost of
providing a service) relative to a benchmark (the maximum amount Medicare is willing to pay).
Bids and benchmarks are used to determine payments in Medicare Part C. Some items of durable
medical equipment in specified locations are to be based on competitive bidding in 2009. Many
services, however, including inpatient and outpatient hospital care, are paid under different
prospective payment systems (PPSs). In general, the program provides for annual updates to these
payment amounts. The program also has rules regarding the amount of cost sharing, if any, which
beneficiaries can be billed in excess of Medicare’s recognized payment levels. Unlike other
services, Medicare’s outpatient prescription drug benefit can be obtained only through private
plans. Further, while all Part D plans must meet certain minimum requirements, they differ in
terms of benefit design, formulary drugs, and cost-sharing amounts.
Medicare payment policies and potential changes to these policies are of continuing interest to
Congress. The Medicare program has been a major focus of deficit reduction legislation since
1980. With certain exceptions, reductions in program spending have been achieved largely
through regulating payments to providers, primarily hospitals and physicians. The Balanced
Budget Act of 1997 (P.L. 105-33, BBA 97) modified some existing payment policies, including
changing underlying payment methodologies and updates to payment amounts. Subsequent
legislation increased Medicare funding to mitigate the financial impact of some BBA 97
provisions. MMA, too, modified payment methods and established payment increases for some
providers. Most recently, the Tax Relief and Health Care Act of 2006 (P.L. 109-432); the
Medicare, Medicaid, and SCHIP Extension Act of 2007 (P.L. 110-173, or MMSEA); and the
Medicare Improvements for Patients and Providers Act of 2008 (P.L. 110-275, or MIPPA) have
affected Medicare’s payments.
This report provides an overview of Medicare payment rules by type of service, outlines current
payment policies, and summarizes the basic rules for program updates. This report will be
updated at least annually.

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Introduction ..................................................................................................................................... 1
Medicare Payment Principles .......................................................................................................... 1
Medicare Payment Rules........................................................................................................... 1
Beneficiary Out-of-Pocket Payments........................................................................................ 2
Recent Congressional Actions with Respect to Program Payments................................................ 3
Medicare Payment Policies ............................................................................................................. 5
Part A............................................................................................................................................... 5
1. Inpatient Prospective Payment System (IPPS) for Short-term, General Hospitals ............... 5
2. Hospitals Receiving Special Consideration Under Medicare’s IPPS.................................... 8
3. IPPS-Exempt Hospitals and Distinct Part Units ................................................................... 9
4. Skilled Nursing Facility (SNF) Care................................................................................... 13
5. Hospice Care ....................................................................................................................... 14
Part B............................................................................................................................................. 14
1. Physicians............................................................................................................................ 14
2. Nonphysician Practitioners ................................................................................................. 15
3. Clinical Diagnostic Laboratory Services............................................................................. 18
4. Preventive Services ............................................................................................................. 18
5. Telehealth ............................................................................................................................ 20
6. Durable Medical Equipment (DME)................................................................................... 20
7. Prosthetics and Orthotics..................................................................................................... 21
8. Surgical Dressings............................................................................................................... 21
9. Parenteral and Enteral Nutrition (PEN) .............................................................................. 21
10. Miscellaneous Items and Services..................................................................................... 22
11. Ambulatory Surgical Centers (ASCs) ............................................................................... 22
12. Hospital Outpatient Services............................................................................................. 23
13. Rural Health Clinics and Federally Qualified Health Center (FQHCs) Services ............. 24
14. Comprehensive Outpatient Rehabilitation Facility (CORF) ............................................. 25
15. Part B Drugs/Vaccines Covered Incident to a Physician’s Visit........................................ 25
16. Blood................................................................................................................................. 25
17. Partial Hospitalization Services Connected to Treatment of Mental Illness ..................... 26
18. Ambulance Services .......................................................................................................... 26
Parts A and B ................................................................................................................................. 27
1. Home Health ....................................................................................................................... 27
2. End-Stage Renal Disease .................................................................................................... 28
Part C............................................................................................................................................. 30
Managed Care Organizations .................................................................................................. 30
Part D............................................................................................................................................. 33
Outpatient Prescription Drug Coverage .................................................................................. 33
CRS Reports for Additional Information ...................................................................................... 35
CRS Staff, by Medicare Issue........................................................................................................ 35

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Author Contact Information .......................................................................................................... 37

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Medicare is the nation’s health insurance program for the aged, disabled, and persons with End
Stage Renal Disease (ESRD). Part A of the program, the Hospital Insurance program, covers
hospital services, up to 100 days of post-hospital skilled nursing facility services, post-
institutional home health visits, and hospice services. Part B, the Supplementary Medical
Insurance program, covers a broad range of medical services including physician services,
laboratory services, durable medical equipment, and outpatient hospital services. Part B also
covers some home health visits. Part C provides private plan options, such as managed care, for
beneficiaries who are enrolled in both Parts A and B. Part D provides outpatient prescription drug
coverage.
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In general, the total payment received by a provider for covered services provided to a Medicare
beneficiary is composed of two parts: a program payment amount from Medicare plus any
beneficiary cost-sharing amount that is required.1 (The required beneficiary out-of-pocket
payment may be paid by other insurance if any.) Medicare has established specific rules
governing its program payments for all covered services as well as beneficiary cost sharing as
described below.
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Medicare has established specific rules governing payment for covered services under Parts A, B,
and C.2 For example, the program pays for most acute inpatient and outpatient hospital services,
skilled nursing facility services, and home health care under a prospective payment system (PPS)
established for the particular service; under PPS, a predetermined rate is paid for each unit of
service such as a hospital discharge or payment classification group. Payments for physician
services, clinical laboratory services, and certain durable medical equipment are made on the
basis of fee schedules.3 Certain other services are paid on the basis of reasonable costs or
reasonable charges. In general, the program provides for annual updates of the payment amounts

1 Not all services require cost sharing from a beneficiary. For instance, clinical laboratory services and home health
services under Parts A and B of Medicare do not require payments from a beneficiary or a beneficiary’s insurance, such
as Medicare supplemental insurance (Medigap), Medicaid, or employer-sponsored retiree health insurance. Cost-
sharing requirements under Part C plans may differ from those under Parts A and B for the same service.
2 Outpatient prescription drugs covered under Part D are not subject to Medicare payment rules. Prices are determined
through negotiation between prescription drug plans (PDPs), or Medicare Advantage prescription drug (MA-PD) plans,
and drug manufacturers. The Secretary of Health and Human Services is statutorily prohibited from intervening in Part
D drug price negotiations.
3 The MMA required the Secretary to establish and implement a competitive bidding program for durable medical
equipment. The program would pay for certain durable medical equipment, prosthetics and orthotics based on the bids
of qualified suppliers in designated areas. The program was to be phased in beginning in 2007. The proposed rule for
the program was published in the Federal Register on May 1, 2006. Two final rules were published in the Federal
Register on August 18, 2006, and April 10, 2007. The first round of bidding closed on September 25, 2007, and the
competitive bidding program started July 1, 2008. However, MIPPA stopped the program, terminated all contracts with
suppliers, and required the Secretary to rebid the first round in 2009. Expansion of the program was delayed by two
years until 2011.
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to reflect inflation and other factors. In some cases, these updates are linked to the consumer price
index for all urban consumers (CPI-U) or to a provider-specific market basket (MB) index which
measures the change in the price of goods and services purchased by the provider to produce a
unit of output.
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There are two aspects of beneficiary payments to providers: required cost-sharing amounts (either
coinsurance, copayments, or deductibles) and the amounts that beneficiaries may be billed over
and above Medicare’s recognized payment amounts for certain services. For Part A, coinsurance
and deductible amounts are established annually; these payments include deductibles and
coinsurance for hospital services, coinsurance for SNFs, no cost sharing for home health services,
and nominal cost sharing for hospice care.4 For Part B, beneficiaries are generally responsible for
premiums, which are income-adjusted starting in 2007, a $135 deductible in 2008 (updated
annually by the increase in the Part B premium), and a coinsurance payment of 20% of the
established Medicare payment amounts.5 For Part C, cost sharing is determined by the private
health care plans. Through 2005, the total of premiums6 for basic Medicare benefits and cost
sharing (deductibles, coinsurance, and co-payments) charged to a Part C enrollee could not
exceed actuarially determined levels of cost sharing for those same benefits under original
Medicare. This meant that plans could not charge a premium for Medicare-covered benefits
without reducing cost-sharing amounts. Beginning in 2006, the constraint on a plan’s ability to
charge a premium for basic Medicare benefits was lifted. The bidding mechanism established by
the MMA allows plans to charge a premium to cover basic Medicare benefits if the costs to the
plan exceed the maximum amount CMS is willing to pay for Medicare-covered benefits. The
MMA eliminated the explicit inverse relationship between cost sharing for basic Medicare
benefits and a premium for basic Medicare benefits. Enrollee cost sharing under Part C is now
only constrained by the actuarial value of cost sharing under original Medicare. However, also
beginning in 2006, the Secretary has expanded authority to negotiate or reject a bid from a
managed care organization in order to ensure that the bid reasonably reflects the plan’s revenue
requirements. Part D cost sharing includes a deductible, co-payments, and catastrophic limits on
out-of-pocket spending.7

4In 2008, for each spell of illness, a beneficiary deductible is $1,024 to cover day 1 through 60 in a hospital. The daily
coinsurance charge is $256 for each day from 61 through 90. After 90 days in the hospital, a beneficiary may draw
down 60 lifetime reserve days with a daily coinsurance of $512 in 2008. In 2009, a beneficiary deductible is $1,068 for
day 1 through 60 in the hospital. The daily coinsurance charge is $267 for each day from 61 through 90. The
coinsurance for the 60 lifetime reserve days is $534 per day.
5 The Part B premium will remain at the 2008 level for 2009. Generally, Part B premiums are set to cover 25% of the
costs of the Part B program. Although the Part B program costs are expected to increase for 2009, Part B contingency
reserves were drawn down in order to hold the premiums at the 2008 level. However, beneficiaries subject to income-
adjusted premiums will see an increase in their 2009 Part B premium because 2009 is the first year such enrollees will
pay the full amount of the income-related premium. The Part B deductible, which is indexed to the annual percentage
increase in the Part B actuarial rate for aged beneficiaries, will remain the same in 2009.
6 Through 2005, managed care plans had the option to charge a premium for basic part A and B Medicare benefits only
if the value of cost sharing for basic benefits was reduced by the same amount. If a plan chose to offer supplemental
benefits not covered under original Medicare, the plan could charge a supplemental premium equal to the actuarial
value of supplemental benefits; the value of the supplemental premium was not constrained by cost-sharing levels for
basic Medicare benefits. All beneficiaries in Part C and original Medicare are required to pay a Part B premium, unless
the Part C plan pays-down the value of the Part B premium as part of a supplemental benefit.
7 For a description of Part D cost sharing, see CRS Report RL34280, Medicare Part D Prescription Drug Benefit: A
Primer, by Jennifer O’Sullivan.
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For most services, there are rules on amounts beneficiaries may be billed over and above
Medicare’s recognized payment amounts. Under Part A, providers agree to accept Medicare’s
payment as payment in full and cannot bill beneficiaries amounts in excess of the coinsurance and
deductibles. Under Part B, most providers and practitioners are subject to limits on amounts they
can bill beneficiaries for covered services. For example, physicians and some other practitioners
may choose whether or not to accept assignment on a claim. When a physician accepts
assignment, Medicare pays the physician 80% of the approved fee schedule amount. The
physician can only bill the beneficiary the 20% coinsurance plus any unmet deductible. When a
physician agrees to accept assignment of all Medicare claims in a given year, the physician is
referred to as a participating physician. Physicians who do not agree to accept assignment on all
Medicare claims in a given year are referred to as nonparticipating physicians. Nonparticipating
physicians may or may not accept assignment for a given service. If they do not, they may charge
beneficiaries more than the fee schedule amount on nonassigned claims; for physicians, these
balance billing charges are subject to certain limits.
For some providers such as nurse practitioners, physician assistants, and clinical laboratories,
assignment is mandatory; these providers can only bill the beneficiary the 20% coinsurance and
any unmet deductible. For other Part B services, such as durable medical equipment, assignment
is optional; providers may bill beneficiaries for amounts above Medicare’s recognized payment
level and may do so without limit.
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Because of its rapid growth, both in terms of aggregate dollars and as a share of the federal
budget, the Medicare program has been a major focus of deficit reduction legislation considered
by Congress in recent years. With a few exceptions, reductions in program spending have been
achieved largely through reductions in payments to providers, primarily hospitals and physicians
that together represent about half of total program payments. Most recently, Medicare’s payments
to managed care organizations were subject to congressional scrutiny. Regardless of which
provider payments may be targeted, past reductions stemmed, but did not eliminate, year-to-year
payment increases or overall program growth.
The Balanced Budget Act of 1997 (BBA 97, P.L. 105-33) achieved significant savings to the
Medicare program by slowing the rate of growth in payments to providers and by enacting
structural changes to the program. A number of health care provider groups stated that actual
Medicare benefit payment reductions resulting from BBA 97 were larger than were intended,
leading to facility closings and other limits on beneficiary access to care. In November 1999,
Congress passed a package of funding increases to mitigate the impact of some BBA 97
provisions on providers. This measure, the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999 (BBRA), is part of a larger measure known as the Consolidated
Appropriations Act for 2000 (P.L. 106-113). Further adjustments were made by the Medicare,
Medicaid, and SCHIP Benefits Improvement and Protection Act (BIPA), part of the larger
Consolidated Appropriations Act, 2001 (P.L. 106-554). In addition to increasing Medicare
payment rates, the subsequent legislation mandated the development or refinement of PPSs for
different Medicare covered services. The Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (P.L. 108-173, or MMA) contained a major benefit expansion in
adding prescription drug coverage; Congress included a number of provisions that affected
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payments to providers and changed administrative and contracting procedures. Further
modifications were made to Medicare payments in the Deficit Reduction Act of 2005 (P.L. 109-
171, DRA); the Tax Relief and Health Care Act of 2006 (P.L. 109-432, TRHCA); the Medicare,
Medicaid, and SCHIP Extension Act of 2007 (P.L. 110-173, MMSEA); and the Medicare
Improvements for Patients and Providers Act of 2008 (P.L. 110-275, MIPPA).
This report provides a guide to Medicare payment rules by type of benefit. It includes a summary
of current payment policies and basic rules for updating payment amounts. It is updated to reflect
the most recent legislative changes to the program and payment updates available through
October 2008. Certain payment updates are not available until January; this report will be updated
when that information is available.
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Provider/service
General payment policy
General update policy
Recent update
Operating PPS for
Medicare pays acute care hospitals using a
After accounting for certain budget neutrality
For FY2008, hospitals that submitted the
inpatient services
prospectively determined payment for each
adjustments, IPPS payment rates are increased
required quality data receive the full MB
provided by acute
discharge. A hospital’s payment for its operating annually by an update factor that is determined, increase of 3.3%. The national standardized
hospitals (Operating
costs is calculated using a national standardized in part, by the projected increase in the hospital amount for these hospitals is $4,990.60.
IPPS)
amount adjusted by a wage index associated
market basket (MB) index. This is a fixed price
Hospitals that did not submit the quality data
with the area where the hospital is located or
index that measures the change in the price of
receive a reduced update of 1.3%. The national
where it has been reclassified. Payment also
goods and services purchased by hospitals to
standardized amount for these hospitals is
depends on the relative resource use associated create one unit of output. The update for
$4,893.97. For FY2009, hospitals that
with the diagnosis related group (DRG) to
operating IPPS is established by statute. Under
submitted the required quality data receive the
which the patient is assigned. A new Medicare
DRA, hospitals that do not submit required
full MB increase of 3.6%. The national
Severity DRG (MS-DRG) patient classification
quality data in FY2007 and each subsequent year standardized amount for these hospitals is
system is being phased in starting in FY2008.
will have the applicable MB percentage reduced $5,128.41. Hospitals that did not submit the
Medicare pays additional amounts for cases with by two percentage points. Any MB reduction
quality data receive a reduced update of 1.6%.
extraordinary costs (outliers); indirect medical
does not apply when computing the
The national standardized amount for these
education (IME) (see below); and for hospitals
hospitals is $5,029.40.
serving a disproportionate share (DSH) of low-
applicable percentage increase in subsequent
income patients (see below). IME and DSH
years. In its FY2008 rule, CMS established

payments are made through adjustments within prospective budget neutrality adjustments of
IPPS so that hospitals receive more money for
-1.2% in FY2008, -1.8% in FY2009 and -1.8% in
each Medicare discharge. Additional payments
FY2010 because of anticipated increases in
may be made for cases that involve qualified
measured severity of illness because of coding
new technologies that have been approved for
changes or documentation improvements
special add-on payments. Hospitals in Hawaii
(coding creep) associated with the new MS-
and Alaska receive a cost-of-living adjustment
DRGs. P.L. 110-90 reduced the adjustment to
(COLA). Certain services are reimbursed
0.6% in FY2008 and 0.9% in FY2009, but permits
outside of IPPS.
offsets to IPPS rate increases in FY2010,
FY2011, and FY2012 to account for coding
creep increases in FY2008 and FY2009 above
these amounts. The law did not address the
scheduled adjustment of an additional 1.8%
decrease in FY2010.
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Provider/service
General payment policy
General update policy
Recent update
Capital IPPS for short- Medicare’s capital IPPS is structured similarly to Updates to the capital IPPS are not established
The capital IPS update for FY2008 is 0.9%.
term general hospitals its operating IPPS for short-term general
in statute. Capital rates are updated annually by Most of this increase is caused by the current
(Capital IPPS)
hospitals. A hospital’s capital payment is based
the Centers for Medicare and Medicaid (CMS)
forecast of the CIPI available when the final rule
on a prospectively determined federal payment according to a framework which considers
was published. In FY2008 CMS eliminated the
rate, depends on the DRG to which the patient changes in the prices associated with capital-
3% payment differential for hospitals in large
is assigned, and is adjusted by a hospital’s
related costs as measured by the capital input
urban areas. After adjustments, the FY2008
geographic adjustment factor (which is
price index (CIPI) and other policy factors,
capital federal rates was $426.14 The capital
calculated from the hospital’s wage index data). including changes in case mix intensity, errors in IPPS update for FY2009 is 0.9%, which reflects
Capital IPPS includes an IME and DSH
previous CIPI forecasts, DRG recalibration, and an estimated increase in the CIPI and a
adjustment (see below). Starting in FY2008, the DRG reclassification. Other adjustments include downward adjustment of 0.5% to account for
IME adjustment will be phased out over a 3-year those that implement budget neutrality with
DRG reclassification and recalibration. After
period. Additional payments are made for
respect to recalibration of DRGs,
applying other adjustments, the FY2009 federal
outliers (cases with significantly higher costs
documentation and coding changes resulting
capital rate is $423.96, a -0.51% change from the
above a certain threshold). Certain hospitals
from the switch to MS-DRGs that do not reflect prior year.
may also qualify for additional payments under
real changes in patient severity of illness, real
an exceptions process. A new hospital is paid
outlier payments, changes in the geographic
85% of its allowable Medicare inpatient hospital adjustment factor, and exception payments.
capital-related costs for its first two years of
operation.

Disproportionate
Approximately 2,800 hospitals receive the
No specific update. The amount of DSH
CBO estimates DSH spending (in both
share hospital
additional payments for each Medicare discharge spending in any year is open-ended and varies by operating and capital IPPS) at $9.4 billion in
adjustment
based on a formula which incorporates the
number of Medicare discharges as well as the
FY2007 and $9.6 billion in FY2008 in its March
number of patient days provided to low-income type of patient seen in any given hospital.
2008 baseline.
Medicare beneficiaries (those who receive
Supplemental Security Income (SSI)) and

Medicaid recipients. A few urban hospitals,
known as “Pickle Hospitals,” receive DSH
payments under an alternative formula that
considers the proportion of a hospital’s patient
care revenues that are received from state and
local indigent care funds. The percentage add-on
for which a hospital will qualify varies according
to the hospital’s bed size or urban or rural
location. The DSH adjustment for most
categories of hospitals is capped at 12%. Urban
hospitals with more than 100 beds, rural
hospitals with more than 500 beds, Medicare
dependent hospitals (MDHs, see below) and
rural referral centers (RRC, see below) are
exempt from the 12% DSH adjustment cap.
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Provider/service
General payment policy
General update policy
Recent update
Indirect Medical
The indirect medical education adjustment (IME) The IME adjustment is not subject to an annual No specific update. The amount spent on IME
Education (IME)
is one of two types of payments to teaching
update. BBA 97 reduced the IME adjustment in depends in part on the number of Medicare
adjustment
hospitals for graduate medical education (GME) operating IPPS from a 7.7% increase for each
discharges in teaching hospitals in any given
costs (see also direct GME below). Medicare
10% increase in a hospital’s ratio of interns to
year. CBO estimates the IME payments (for
increases both its operating and capital IPPS
beds (IRB), a measure of teaching intensity in
both capital and operating IPPS) to be about
payments to teaching hospitals; different
operating IPPS; by FY2001, the IME adjustment $5.7 billion in FY2007 and $5.9 billion in FY2008
measures of teaching intensity are used in the
was to be 5.5%. However, the scheduled
in its March 2008 baseline.
operating and capital IPPS. For both IPPS
decreases were delayed by subsequent
payments, however, the number of medical
legislation. MMA provides an increased IME
residents who can be counted for the IME
adjustment to 6.0% from April 1, 2004-
adjustment is capped, based on the number of
September 30, 2004; during FY2005 the
medical residents as of December 31, 1996. As adjustment is 5.8%; during FY2006 the
established by BBA 97, teaching hospitals also
adjustment is 5.55%; and during FY2007 the
receive IME payments for their Medicare Part C adjustment is 5.35%; starting FY2008 and
discharges.
subsequently, the adjustment returns to 5.5%.
Direct graduate
Direct GME costs are excluded from IPPS and
In general, direct GME payments are updated by Hospitals below 140% of the national average
medical education
paid outside of the DRG payment on the basis
the increase in the consumer price index for all from FY2004-FY2013 receive an update of CPI-
payments
of updated hospital-specific costs per resident
urban consumers (CPI-U). As established by
U. Hospitals above 140% of the national average
amount (PRA), the number of weighted full-time BBRA and subsequently amended, however, the for that time period will receive no update.
equivalent (FTE) residents, and Medicare’s share update amount that any hospital receives
CBO estimates direct GME payments of $2.8
of total patient days in the hospital (including
depends upon the relationship of its PRA to the billion in FY2007 and $2.8 billion in FY2008 in
those days attributed to Medicare manged care national average PRA. Hospitals with PRAs
its March 2008 baseline.
enrollees). There is a hospital-specific cap on
below the floor (85% of the locality-adjusted,
the number of residents in the hospital for
updated, and weighted national PRA) are raised
direct GME payments. Also, the hospital’s FTE
to the floor amount. Teaching hospitals with
count is based on a three-year rolling average; a PRAs above the ceiling amount (140% of the
specific resident may count as half of a FTE,
national average, adjusted for geographic
depending on the number of years spent as a
location) will receive a lower update than other
resident and the length of the initial training
hospitals (CPI-U minus two percentage points)
associated with the specialty. Certain combined for FY2003-FY2013. Hospitals that have PRAs
primary care residency programs receive special between the floor and ceiling receive the CPI-U.
recognition in this count. Depending upon the
circumstances, direct GME payments can be

made to nonhospital providers.
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Provider/service
General payment policy
General update policy Recent update
Sole Community Hospitals (SCHs)—facilities
An SCH receives the higher of the following
Target amounts for SCHs For FY2008, hospitals that submitted the
located in geographically isolated areas and
payment rates as the basis of reimbursement: the are updated by an
required quality data receive the full MB
deemed to be the sole provider of inpatient
current IPPS base payment rate, or its hospital-
“applicable percentage
increase of 3.5%. Hospitals that did not
acute care hospital services in a geographic area specific per-discharge costs from either FY1982, increase” which is
submit the quality data receive a reduced
based on distance, travel time, severe weather
1987, or 1996, updated to the current year.
specified by statute and is update of 1.5%. For FY2009, hospitals that
conditions, and/or market share as established
Under MIPPA, for cost reporting periods
often comparable to the submitted the required quality data receive
by specific criteria set forth in regulation (42
beginning on or after January 1, 2009, an SCH
IPPS update. (See
the full MB increase of 3.6%. Hospitals that
CFR 412.92).
will be able to elect payment based on its
description for IPPS
did not submit the quality data receive a
FY2006 hospital-specific payment amount per
hospitals).
reduced update of 1.6%
discharge. This amount will be increased by the
annual update starting for discharges on or after
January 1, 2009. An SCH may receive additional
payments if the hospital experiences a decrease
of more than 5% in its total inpatient cases due
to circumstances beyond its control. An SCH
receives special consideration for reclassification
into a different area. Starting for services on
January 1, 2006, CMS increased outpatient
prospective payment system (OPPS) payments to
rural SCHs by an additional 7.1%.
Medicare dependent hospitals (MDHs)—small
BBA 97 reinstated and extended the MDH
Target amounts for
For FY1996 and thereafter, the update for
rural hospitals with a high proportion of patients classification, starting on October 1, 1997, and
MDHs are updated by an MDHs is the same as for all IPPS hospitals.
who are Medicare beneficiaries (have at least
extending to October 1, 2001. The sunset date
“applicable percentage
These updates are also used to increase the
60% of acute inpatient days or discharges
for the MDH classification was subsequently
increase” which is
hospital-specific rate applicable to an MDH.
attributable to Medicare in FY1987 or in two of extended to September 30, 2011 by DRA. Until specified by statute and is For FY2008, hospitals that submitted the
the three most recently audited cost reporting
October 1, 2006, an MDH was paid the federal
often comparable to the required quality data receive the full MB
periods). As specified in regulation (42 CFR
rate plus 50% of the amount that the rate is
IPPS update.
increase of 3.3%. Hospitals that did not
412.108), they cannot be an SCH and must have exceeded by the hospital’s target amount based
submit the quality data receive a reduced
100 or fewer beds.
on either its updated FY1982 or FY1987 cost
update of 1.3%. For FY2009, hospitals that
per discharge. DRA provided that an MDH
submitted the required quality data receive
would be able to elect payments based on using
the full MB increase of 3.6%. Hospitals that
a percentage of its FY2002 hospital-specific cost
did not submit the quality data receive a
starting October 1, 2006. An MDH’s payments
reduced update of 1.6%
would be based on 75% of the adjusted hospital-
specific cost starting for discharges on October
1, 2006. DRA also excluded MDHs from the 12%
DSH adjustment cap for discharges starting
October 1, 2006. An MDH may receive
additional payments if its inpatient cases decline
ȬŞȱ

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Provider/service
General payment policy
General update policy Recent update
more than 5% due to circumstances beyond its
control.
Rural Referral Centers (RRCs)—relatively large RRCs payments are based on the IPPS for short- RRCs receive the
See updates specified for operating and
hospitals, generally in rural areas, that provide a term general hospitals. RRCs are exempt from
operating and capital IPPS capital IPPS for short-term general hospitals.
broad array of services and treat patients from a the 12% DSH adjustment cap. Also, RRCs
updates specified for
wide geographic area as established by specific
receive preferential consideration for
short-term general
criteria set forth in regulation. (42 CFR 412.96). reclassification to a different area.
hospitals.
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Provider/service
General payment policy
General update policy
Recent update
Inpatient Rehabilitation Facilities (IRFs)—
As of January 1, 2002, Medicare’s
Starting in FY2006, the IRF-PPS update is The update for FY2007 was 3.3%. In
freestanding hospitals and hospital-based
payments to a rehabilitation facility are
based on the MB reflecting 2002 cost
2007, IRF-IPPS included a reduction of
distinct part units that treat a percentage of based on a fully implemented IRF-PPS and structures from rehabilitation,
2.6% to account for coding changes, for
patients with a defined set of conditions and 100% of the federal rate which is a fixed
psychiatric, and long-term care hospitals a net increase of 0.6%. After budget
meet certain established conditions of
amount per discharge. This PPS
(RPL-MB). The RLP-MB includes an
neutrality adjustments, the FY2007 IRF
participation. As established by MMSEA,
encompasses both capital and operating
update estimate for capital as well as
federal base rate is $12,981. In the
starting July 1, 2007, the IRF compliance
payments to IRFs, but does not cover the operating costs. MMSEA establishes the FY2008 IRF rule CMS established the
threshold (which determines whether a
costs of approved educational programs, IRF update factor at 0% in FY2008 and
update for FY2008 as 3.2% and the
facility is an IRF or an acute care hospital) is bad debt expenses, or blood clotting
FY2009, starting for discharges on April base federal base rate as $13,451.
set at 60%; comorbidities are included as
factors, which are paid for separately. The 1, 2008.
However, in December 2007, MMSEA
qualifying conditions. To be paid as an IRF,
IRF-PPS payment for any Medicare
established the IRF update factor at 0%
an entity must have 60% of its inpatients
discharge will vary depending on the
in FY2008 and FY2009 starting for
with one of 13 conditions including stroke, patient’s impairment level, functional
discharges on April 1, 2008. The federal
spinal cord injury, brain injury, neurological status, comorbidity conditions, and age.
base rate was set at $12,981 starting
disorder, burns, and certain arthritis related These factors determine which of the 87
April 1, 2008, and will remain that
conditions.
Case Mix Groups (CMGs) is assigned to
amount through FY2009.
the inpatient stay. Within each of these
CMGs, patients are further assigned to
one of four tiers based on any
comorbidities they may have. Five other
CMGs are used for patients discharged
before the fourth day (short stay outliers)
and for those who die in the facility.
Generally, IRF payments are reduced or
increased for certain case level
adjustments, such as early transfers,
short-stay outliers, patients who die
before transfer, and high cost outliers.
Payments also depend upon facility-
Ȭşȱ

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Provider/service
General payment policy
General update policy
Recent update
specific adjustments to accommodate
variations in area wages, percentage of
low income patients (LIP) served by the
hospital (a DSH adjustment), and rural
location (rural IRFs receive increased
payments, about 19% more than urban
IRFs.) Starting in FY2006, an IME
adjustment is included; IRFs in Alaska and
Hawaii do not receive a COLA
adjustment. The IRF-PPS is not required
to be budget neutral; total payments can
neexceed the amount that would have
been paid if this PPS had not been
implemented.
Long-Term Care Hospitals and satellites or Effective October 1, 2002, LTCHs are
The LTCH update is not specified in
There was no increase to the LTCH
onsite providers (LTCHs)—acute general
paid on a discharge basis under a DRG-
statue. CMS has established a policy to
base payment rates for RY2006 or
hospitals that are excluded from IPPS with a based PPS, subject to a five-year
update the LTCH rates based on the
RY2007. The LTCH federal payment
Medicare inpatient average length of stay
transition period. The LTCH-PPS
most recent estimate of the
rate remains $38,086. In RY2008, CMS
(ALOS) greater than 25 days.
encompasses payments for both
rehabilitation, psychiatric, and long-term proposed a 0.71% update which reflects
operating and capital-related costs of
care (RPL) market basket adjusted to
a 3.2% MB increase and a 2.49%
inpatient care but does not cover the
account for improved coding practices.
correction for coding improvements.
costs of approved educational programs, CMS changed the effective date of the
The RY2008 federal payment rate was
bad debt expenses, or blood clotting
annual update from October 1 to July 1 $38,356.45. Under MMSEA, the base
factors which are paid for separately. The of each year, starting July 2003. MMSEA rate for LTCH’s RY2008 was established
LTCH-PPS payment for any Medicare
established a three-year moratorium
as the same as that in RY2007. The
discharge will vary depending on the
period during which the Secretary will
provision would apply to discharges
patient’s assignment into a Medicare
not be able to apply certain payment
starting April 1, 2008 through June 30,
severity- LTC-DRGs, which are based on policies, including payments for short
2008. The RY2009 (from July 1, 2008
reweighted IPPS MS-DRGs. Payments for stay outliers or the one-time adjustment through September 30, 2009) federal
specific patients may be increased or
to LTCH prospective payments to
payment rate is $39,114.36. This
reduced because of case-level
ensure budget neutrality. In the RY2009 increase is based on a MB estimate of
adjustments, such as short stay cases,
final rule, CMS changed the effective
3.5% adjusted by 0.9% to account for
interrupted stay cases, readmitted cases
date of the annual update back to
the increase in case-mix in the prior
from co-located providers and high costs October 1, beginning October 1, 2009.
period that resulted from changes in
outliers. Payments also depend upon
In order to implement the change,
coding practices. The effective increase
facility-specific adjustments such as
RY2009 will be a 15-month rate year,
in the federal payment rate is 2.6%
variations in area wages and include a
from July 1, 2008, through September
COLA for hospitals in Alaska and Hawaii. 30, 2009.

No adjustments are made for the
percentage of low income patients served
by the hospital (DSH), rural location, or
IME. The LTCH-PPS is required to be
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Provider/service
General payment policy
General update policy
Recent update
budget neutral; total payments must equal
the amount that would have been paid if
PPS had not been implemented.
Psychiatric hospitals and distinct part
Starting January 1, 2005, Medicare pays
The IPF update is not specified in statue. The update for RY2007 of 4.3% was
units—include those primarily engaged in
for services provided in inpatient
CMS has established a policy to update
applied to a corrected base per diem
providing, by or under the supervision of a psychiatric facilities (IPF) using a per-diem the per diem rates based on the most
amount that was then increased by a
psychiatrist, psychiatric services for the
based PPS. Established with a three-year
recent estimate of the rehabilitation,
wage index budget neutrality factor. The
diagnosis and treatment of people with
transition period, the IPF-PPS
psychiatric, and long-term care market
Federal per diem base rate for RY2007
mental illness.
incorporates patient-level adjustments for basket (RPL-MB) The IPF-PPS payments was $595. The update for RY2008 is
specified DRGs, selected comorbidies,
must be projected to equal the amount 3.2%. The federal base payment is $615
and in certain cases, age of the patient.
of total payments that would have been per day. The update for RY2009 is
Facility-level adjustments for relative
made under the prior payment system.
3.2%. After adjusting for 0.39% stop loss
wages, teaching status and rural location
The initial calculation of the per diem
adjustment and a wage index budget
are also included. IPFs in Hawaii and
payment included a 17.46% reduction to neutrality factor of 1.0010, the federal
Alaska will receive a COLA adjustment.
account for standardization to projected base payment is $637.78 per day.
Medicare per diem payments are higher
TEFRA (the prior payment system)
in the earlier days of the psychiatric stay. payments, a 2% reduction to account for
Also, the per diem payment for the first
outlier payments, a 0.39% reduction to
day of each stay is 12% higher in IPFs with account for the stop-loss provision and a
qualifying (full-service) emergency
2.66% reduction to account for a
departments than in other IPFs. An
behavioral offset (to reflect changing
outlier policy for high-cost cases is
utilization under the new payment
included. Patients who are discharged
system).
from an IPF and return within three days
are considered readmissions of the same
case. IPFs also receive an additional
payment for each eletroconvulsive
therapy treatment furnished to a patient.
Finally, under the stop-loss provision,
during the three-year transition period
ending in 2008, an IPF is guaranteed at
least 70% of the aggregate payments that
would have been made under the prior
payment system.
Children’s and cancer hospitals:
Children’s and cancer hospitals are paid
An update factor for reimbursement of
The update for FY2008 is 3.3%. The
on a reasonable cost basis, subject to
operating costs is established by statute. update for FY2009 is 3.6%.
Children’s hospitals are those engaged in
furnishing services to inpatients who are
TEFRA payment limitations and
Starting in FY2006, the IPPS operating
predominantly individuals under the age of
incentives. Each provider’s
MB increase is used to update the target
18.
reimbursement is subject to a ceiling or
amounts. The amount of increase
Cancer hospitals are generally
recognized by the National Cancer Institute target amount that serves as an upper
received by any specific hospital will
as either a comprehensive or clinical cancer limit on operating costs. Depending upon depend upon the relationship of the
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Provider/service
General payment policy
General update policy
Recent update
research center; are primarily organized for the relationship of the hospital’s actual
hospital’s costs to its target amount.
the treatment of and research on cancer
costs to its target amount, these hospitals There is no specific update for capital
(not as a subunit of another entity); and
may receive relief or bonus payments as
costs.
have at least 50% of their discharges with a well as additional bonus payments for
diagnosis of neoplastic disease. See 42 CFR continuous improvement (i.e., facilities
412.23(f).
whose costs have been consistently less
than their limits may receive additional
money). Newly established hospitals
receive special treatment. Providers that
can demonstrate that there has been a
significant change in services and/or
patients may receive exceptions
payments. The capital costs for these
hospitals are reimbursed on a reasonable
cost basis.
Critical Access Hospitals (CAHs) are
Medicare pays CAHs on the basis of the
No specific update policy.
No specific update policy.
limited-service facilities that are located
reasonable costs of the facility for
more than 35 miles from another hospital
inpatient and outpatient services. CAHs
(15 miles in certain circumstances) or
may elect either a cost-based hospital
designated by the state as a necessary
outpatient service payment or an all-
provider of health care; offer 24-hour
inclusive rate which is equal to a
emergency care; have no more than 25
reasonable cost payment for facility
acute care inpatient beds and have a 96-
services plus 115% of the fee schedule
hour average length of stay. Beds in distinct- payment for professional services.
part skilled nursing facility, psychiatric or
Ambulance services that are owned and
rehabilitation units operated by a CAH do
operated by CAHs are reimbursed on a
not count toward the bed limit.
reasonable cost basis if these ambulance
services are 35 miles from another
ambulance system. MMA provided that
inpatient, outpatient, and swing bed
services provided by CAHs will be paid at
101% of reasonable costs for cost
reporting periods beginning January 1,
2004. Starting July 1, 2009, clinical
diagnostic laboratory services furnished
by a CAH will be paid as outpatient
hospital services at 101% of costs without
regard to whether the individual is
physically present in the CAH, or in a
SNF or a clinic (including a rural health
clinic) that is operated by a CAH at the
ȬŗŘȱ

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Provider/service
General payment policy
General update policy
Recent update
time the specimen is collected.
Śǯȱȱȱ¢ȱǻǼȱȱ
Provider/service General payment policy
General update policy
Recent update
SNF care
SNFs are paid through a prospective payment system (PPS)
The urban and rural federal per diem payment rates are
For FY2008, SNFs
which is composed of a daily (“per-diem”) urban or rural base
increased annually by an update factor that is determined, in
will receive the full
payment amount that is then adjusted for case mix and area
part, by the projected increase in the SNF market basket (MB) MB increase of 3.3%.
wages.
index. This index measures changes in the costs of goods and For FY2009, SNFs
The federal per diem payment is intended to cover all the
services purchased by SNFs. Each year, the update of the
will receive the full
services provided to the beneficiary that day, including room and payment rate also includes, as appropriate, an adjustment to
MB increase of 3.4%.
board, nursing, therapy, and prescription drugs. Some care costs account for the MB forecast error for previous years. Before
are excluded from PPS and paid separately such as physician
FY2008, when the difference between the estimated MB
visits, dialysis and certain high cost prosthetics and orthotics.
update and the actual increase was greater than 0.25
percentage points, payments to SNFs would be updated to
The case-mix adjustment to the base per diem rate adjusts
account for this forecast error. When the difference was less
payments for the treatment and care needs of Medicare
than 0.25 percentage points, no adjustments were made. The
beneficiaries and categorizes individuals into groups called
threshold for adjusting a forecast error was raised, by
resource utilization groups (RUGs). The RUGs system uses
regulation, to 0.5 percentage points for FY2008 and
patient assessments to assign a beneficiary to one of 53
subsequent years.
categories and to determine the payment for the beneficiary’s
care. Patient assessments are done at various times during a
patient’s stay and the RUG category in which a beneficiary is
placed can change with changes in the beneficiary’s condition. In
addition to being adjusted for case-mix, the federal payment is
also adjusted to account for variations in area wages, using the
hospital wage index.
Starting on October 1, 2004, MMA increased payments for AIDS
patients in SNFs by 128%. Unlike other PPSs, the SNF PPS
statute does not provide for an adjustment for extraordinarily
costly cases (an “outlier” adjustment). DRA reduced payments
to SNFs for beneficiary bad debts to 70% for non-duals
(individuals who are not enrolled in both Medicare and
Medicaid). Bad debt payments for dual eligibles (individuals
enrolled in both Medicare and Medicaid) remain at 100%
Ȭŗřȱ

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śǯȱ ȱȱ
Provider/Service General payment policy
General update policy
Recent update
Hospice care
Payments for hospice care contain three
Each of the three components are updated annually.
The FY2008 payment rates are updated by the
separate components that are adjusted
The prospective payment rates are updated by the MB of 3.3%. The national hospice base payment
annually. These components are the
increase in the hospice market basket (MB). Since
rates for care furnished during FY2008 are as
payment rates, the hospice wage index, and FY2003 updates have been at the full hospital MB
follows: routine home care—$135.11 per day;
the cap amount. Limited cost sharing
percentage increase.
continuous home care—$788.55; inpatient respite
applies to outpatient drugs and respite
care—$139.76 per day; and general inpatient
care.
The hospice wage index is updated to reflect
care—$601.02 per day.
Payment rates
updates in the hospital wage index and any changes to
are based on one of four the definition of Metropolitan Statistical Areas (MSAs). The FY2009 payment rates are updated by the
prospectively determined rates which
MB of 3.6%. This update is affected by the BNAF.
correspond to four different levels of care In 1997, a budget neutrality adjustment factor
The net effect is a 2.5% increase. The national
(i.e., routine home care, continuous home (BNAF) was instituted to account for differences in
hospice base payment rates for care furnished
care, inpatient respite care, and general
hospice payments as a result of a change in the data
during FY2009 are as follows: routine home
inpatient care) for each day a beneficiary is source used to adjust for geographic differences in
care—$139.97; continuous home care—$816.94
under the care of the hospice.
labor from the 1983 Bureau of Labor Statistics data to
the hospital wage index. A final rule, published in the
for 24 hours or $34.04 per hour; inpatient respite
The hospice wage index is used to
care—$144.79 per day; and general inpatient
Federal Register on August 8, 2008, will phase out
adjust payment rates to reflect local
BNAF over three years, with a 25% reduction in
care—$622.66 per day.
differences in area wage levels. This index FY2009, an additional 50% reduction (totaling 75%) in The latest hospice cap amount for the cap year
is established using the most current
FY2010, and a final 100%, or elimination, in FY2011.
ending October 31, 2008, is an aggregated
hospital wage data available.
The hospice cap
$22,386.15 per beneficiary. For the year,
amount is increased or decreased
Total payments to a hospice are subject to annually by the same percentage as the medical care
November 1, 2006 through October 31, 2007 it
an aggregate cap that is determined by
expenditure category of the CPI-U.
was an aggregated $21,410.04 per beneficiary.
multiplying the cap amount for a given year
by the number of Medicare beneficiaries
who receive hospice services during the
year. Medicare payments to hospices that
exceed this amount must be returned to
the Medicare program.
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ŗǯȱ¢ȱ
Provider/service General payment policy
General update policy
Recent update
Physicians
Payments for physicians services are made on the The conversion factor is updated each year by As provided in MMSEA, the conversion factor for
ȬŗŚȱ

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Provider/service General payment policy
General update policy
Recent update
basis of a fee schedule. The fee schedule assigns
a formula specified in law. The update
the first six months of 2008 was $38.087, a 0.5%
relative values to services. These relative values
percentage equals the Medicare Economic
increase over the 2007 amount and the anesthesia
reflect physician work (based on time, skill, and
Index (MEI, which measures inflation) subject
conversion factor for the first six months of
intensity involved), practice expenses (including
to an adjustment to match spending under the 2008 was $17.8482. MIPPA extended the 0.5%
the cost of nurses and other staff), and
cumulative sustainable growth rate (SGR)
increase through the end of 2008 and established a
malpractice expenses. The relative values are
system. (The SGR is linked, in part, to changes 1.1% additional increase for 2009.
adjusted for geographic variations in the costs of in the gross domestic product per capita.) The
practicing medicine. These geographically
adjustment sets the conversion factor so that
MIPPA also established a special payment rule when
adjusted relative values are converted into a
projected spending for the year will equal
teaching anesthesiologists that limits the total
dollar payment amount by a conversion factor.
allowed spending by the end of the year. In no Medicare payment amount. In the case of teaching
Assistants-at-surgery services (provided by
case can the conversion factor update be more anesthesiologists involved in a single anesthesia case
physicians) are paid 16% of the fee schedule
than three percentage points above nor more or two concurrent anesthesia cases, the total
amount.
than seven percentage points below the MEI.
payment amount could not exceed 100% of the fee
schedule amount if the anesthesia services were
Anesthesia services are paid under a separate fee Application of the SGR system led to a 5.4%
personally performed by the teaching
schedule (based on base and time units) with a
reduction in the conversion factor in 2002.
anesthesiologist alone. This payment provision
separate conversion factor.
Additional reductions were slated to take
effect in subsequent years. However, P.L. 108-7 would only apply if (1) the teaching anesthesiologist
Medicare payments for professional services
allowed for revisions in previous estimates
was present during all critical or key portions of the
equal 80% of the fee schedule amount; patients
used for the SGR calculation, thereby
anesthesia service or procedure involved, and (2)
are liable for the remaining 20%. (Payments for
permitting an update of 1.6% effective March 1, the teaching anesthesiologist (or another
certain mental health services equal 50% of the
2003. MMA provided that the update to the
anesthesiologist with whom the teaching
fee schedule amounts; patients are liable for the
conversion factor for 2004 and 2005 could not anesthesiologist had entered into an arrangement)
other 50%). Assignment is optional; balance
be less than 1.5%. DRA froze the 2006 rate at was immediately available to furnish anesthesia
billing limits apply on non-assigned claims.
the 2005 level, TRHCA froze the 2007 rate at services during the entire procedure.
the 2006 level; and MMSEA provided that the
Several additional changes were incorporated in the
level for the first six months of 2008 is
both the 2007 and 2008 fee schedules (including
increased by 0.5%. MIPPA extended this 0.5%
modifying the relative values for a number of
increase through the end of 2008.
services and the continuing phase-in of a revision in
the way practice expenses are calculated). As a
result, 2008 payments for some services will
decrease, while payments for other services will
increase from the 2007 amount.
Řǯȱ¢ȱȱ
Provider/service
General payment policy
General update policy
Recent update
(a) Physician Assistants Separate payments are made for physician assistant See physician fee schedule.
See physician fee schedule.
(PA) services, when provided under the supervision
of a physician, but only if no facility or other
provider charge is paid. Payment is made to the
Ȭŗśȱ

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Provider/service
General payment policy
General update policy
Recent update
employer (such as a physician). The PA may be in an
independent contractor relationship with the
employer.
The recognized payment amount equals 85% of the
physician fee schedule amount (or, for assistant-at-
surgery services, 85% of the amount that would be
paid to a physician serving as an assistant-at-
surgery). Medicare payments equal 80% of this
amount; patients are liable for the remaining 20%.
Assignment is mandatory for PA services.
(b) Nurse
Separate payments are made for NP or CNS
See physician fee schedule.
See physician fee schedule.
Practitioners (NPs)
services, provided in collaboration with a physician,
and Clinical Nurse
but only if no other facility or other provider charge
Specialists (CNSs)
is paid.
The recognized payment amount equals 85% of the
physician fee schedule amount (or, for assistant-at-
surgery services, 85% of the amount that would be
paid to a physician serving as an assistant-at-
surgery). Medicare payments equal 80% of this
amount; patients are liable for the remaining 20%.
Assignment is mandatory.
(c) Nurse midwives
The recognized payment amount for certified nurse See physician fee schedule.
See physician fee schedule.
midwife services equals 65% of the physician fee
schedule amount. Nurse midwives can be paid
directly. Medicare payments equal 80% of this
amount; patients are liable for the remaining 20%.
Assignment is mandatory.
(d) Certified
CRNAs are paid under the same fee schedule used See physician fee schedule.
The MIPPA provision establishing the special
Registered Nurse
for anesthesiologists. Payments furnished by an
rule for anesthesia teaching programs as
Anesthetists (CRNAs) anesthesia care team composed of an
mentioned above also requires the Secretary
anesthesiologist and a CRNA are capped at 100% of
of HHS to make “appropriate adjustments” to
the amount that would be paid if the
payments for anesthesia services for CRNAs,
anesthesiologist was practicing alone. The payments
including maintaining the existing payment
are evenly split between each practitioner. CRNAs
differences between teaching anesthesiologists
can be paid directly. Assignment is mandatory for
and teaching certified registered nurse
services provided by CRNAs. Regular Part B cost
anesthetists.
sharing applies.
(e) Clinical
The recognized payment amount for services
See physician fee schedule.
See physician fee schedule.
Psychologists and
provided by a clinical social worker is equal to 75%
ȬŗŜȱ

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Provider/service
General payment policy
General update policy
Recent update
Clinical Social
of the physician fee schedule amount.
Workers
Services in connection with the treatment of
mental, psychoneurotic, and personality disorders of
a patient who is not a hospital inpatient are subject
to the mental health services limitation. In these
cases Medicare pays 50% of incurred expenses and
the patient is liable for the remaining 50%.
Otherwise, regular Part B cost sharing applies.
Assignment is mandatory for services provided by
clinical psychologists and clinical social workers.
(f) Outpatient physical Payments are made under the physician fee
Updates in fee schedule payments are
See physician fee schedule.
or occupational
schedule.
dependent on the update applicable under the
therapy services
Medicare coverage for outpatient therapy services, physician fee schedule. The $1,500 limits were
including physical therapy, speech-language
to be increased by the increase in the MEI
pathology services, and occupational therapy have
beginning in 2002; however, application of the
limits or “caps.” To accommodate patients with
limits was suspended until September 1, 2003.
therapy needs that exceed the cap, Congress
At that time the limits were $1,590. MMA
created an exceptions process that allows for
suspended the application of the limits
specific diagnoses and procedures to receive
beginning December 8, 2003-December 31,
Medicare coverage even after a beneficiary has met 2005. The limits were restored January 1,
the therapy cap for the year.
2006. The 2006 limits were $1,740; the 2007
limits were $1,780, and the 2008 limits are
In 1999, an annual $1,500 per beneficiary limit
$1,810. DRA required the Secretary to
applied to all outpatient physical therapy services
establish an exceptions process for 2006 for
(including speech-language pathology services),
certain medically necessary services. TRHCA
except for those furnished by a hospital outpatient
extended the exceptions process through
department. A separate $1,500 limit applied to all
2007; MMSEA extended the process an
outpatient occupational therapy services except for additional six months. MIPPA extends the
those furnished by hospital outpatient departments. exceptions process through December 31,
Therapy services furnished as incident to physicians 2009.
professional services were included in these limits.
The $1,500 limits were to apply each year.
However, no limits applied from 2000-2005, except
for a brief period in 2003. The limits were restored
in 2006; however, an exceptions process applies in
2006, 2007, and the first six months of 2008.
Regular Part B cost sharing applies. Assignment is
optional for services provided by therapists in
independent practice; balance billing limits apply for
non-assigned claims. Assignment is mandatory for
Ȭŗŝȱ

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Provider/service
General payment policy
General update policy
Recent update
other therapy services.
řǯȱȱȱ¢ȱȱ
Provider/service General payment policy
General update policy
Recent update
Clinical diagnostic
Clinical lab services are paid on the basis of
Generally, the Secretary of HHS is
The fee schedules were updated by 1.1% in 2003. Per
laboratory services area-wide fee schedules. The fee schedule
required to adjust the payment amounts MMA, no update was made for 2004, 2005, 2006, 2007,
amounts are periodically updated. There is a
annually by the percentage change in the or 2008.
ceiling on payment amounts equal to 74% of
CPI, together with such other
the median of all fee schedules for the test.
adjustments as the Secretary deems
The annual clinical laboratory test fee schedule update
Assignment is mandatory. No cost sharing is
appropriate. Updates were eliminated for adjustment for 2009-2013 will be the percentage increase
imposed.
1998 through 2002. MMA eliminated
or decrease in the CPI for all urban consumers minus 0.5
percentage points. MIPPA repealed the Medicare
MMA mandated a demonstration project using updates for 2004-2008.
Competitive Bidding Demonstration Project for Clinical
competitive bidding for clinical laboratory
Laboratory Services.
services to determine whether competitive
bidding could be used to provide quality
MIPAA clarified the payment for clinical laboratory services
laboratory services at prices below current
in CAHs. Beginning July 1, 2009, clinical diagnostic
Medicare payment rates. The first payments
laboratory services furnished by a CAH will be reimbursed
under the demonstration were to be made
as outpatient hospital services at 101% of costs without
July 1, 2008.
regard to whether the individual who receives the service
is physically present in the CAH, or in a skilled nursing
home or a clinic (including a rural health clinic) that is
operated by a CAH at the time the specimen is collected.
Śǯȱȱȱ
Provider/service
General payment policy
General update policy Recent update
Pap smears; pelvic
Medicare covers screening pap smears and screening pelvic exams once every two years; See clinical laboratory fee See clinical laboratory fee
exams
annual coverage is authorized for women at high risk. Payment is based on the clinical
schedule. A national
schedule. Minimum
diagnostic laboratory fee schedule. Assignment is mandatory. No cost sharing is imposed. minimum payment
payment for pap smears in
amount applies for pap
2008 is $14.76 (the same
smears.
as 2007).
Screening mammograms Coverage is authorized for an annual screening mammogram. Payment is made under the See physician fee
See physician fee schedule.
physician fee schedule. The deductible is waived; regular Part B coinsurance applies.
schedule.
Assignment is optional. Balance billing limits apply on non-assigned claims.
Colorectal screening
Coverage is provided for the following procedures for the early detection of colon
See physician fee
See physician fee schedule
cancer: (1) screening fecal occult blood tests (for persons over 50, no more than
schedule and laboratory and laboratory fee
ȬŗŞȱ

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Provider/service
General payment policy
General update policy Recent update
annually); (2) screening flexible sigmoidoscopy (for persons over 50, no more than once
fee schedule.
schedule.
every four years and 10 years after a screening colonoscopy for those not at high risk for
colon cancer); (3) screening flexible colonoscopy for high-risk individuals (limited to one
every two years) and for those not at high risk, every 10 years or four years after a
screening sigmoidoscopy; and (4) barium enemas (as an alternative to either a screening
flexible sigmoidoscopy or screening colonoscopy in accordance with the same screening
parameters established for those tests).
Payments are based on rates paid for the same procedure when done for a diagnostic
purpose. Fecal occult blood tests are paid under the laboratory fee schedule; other tests
are paid under physician fee schedule. If a sigmoidoscopy or colonoscopy results in a
biopsy or removal of a lesion, it would be classified and paid as the procedure with such
biopsy or removal, rather than as a diagnostic test. Assignment is mandatory for fecal
occult blood tests and no cost sharing applies. Assignment is optional for sigmoidoscopies
and colonoscopies. DRA specified that the Part B deductible does not apply for
screenings, effective January 1, 2007. Balance billing limits apply on non-assigned claims.
Prostate cancer
Medicare covers an annual prostate cancer screening test. Payment is made under the
See physician fee
See physician fee schedule.
screening
physician fee schedule.
schedule.
Glaucoma screening
Medicare covers an annual glaucoma screening for persons with diabetes, persons with a See physician fee
See physician fee schedule.
family history of glaucoma, African-Americans age 50 and over, and Hispanic Americans
schedule.
age 65 and over. Payment is made under the physician fee schedule.
Diabetes outpatient self- Medicare covers services furnished by a certified provider. Payment is made under the
See physician fee
See physician fee schedule.
management training
physician fee schedule.
schedule.
Medical nutrition
Coverage is authorized for certain individuals with diabetes or renal disease. Payment
See physician fee
See physician fee schedule.
therapy services
equals 85% of the amount established under the physician fee schedule for the service if it schedule.
had been furnished by a physician.
Bone mass
Bone mass measurements are covered for certain high-risk individuals. Payments are
See physician fee
See physician fee schedule.
measurements
made under the physician fee schedule. In general, services are covered if they are
schedule.
provided no more frequently than once every two years.
Ultrasound screenings
Ultrasound screenings for abdominal aortic aneurysms are covered for individuals who:
See physician fee
See physician fee schedule.
for abdominal aortic
(1) receive a referral for such screening during the initial preventive services exam; (2)
schedule.
aneurysms
have not had such a screening paid for by Medicare; and (3) have a family history of
abdominal aortic aneurysm or manifest certain risk factors.
Ȭŗşȱ

ȱ
śǯȱȱ
Provider/Service General payment policy
General update policy
Recent update
Telehealth services Medicare pays for services furnished via a telecommunications system by a physician or
See physician fee schedule. The
See physician fee
practitioner, notwithstanding the fact that the individual providing the service is not at the facility fee equals the amount
schedule. The 2008
same location as the beneficiary. Payment is equal to the amount that would be paid under established for the preceding
facility fee is $23.35
the physician fee schedule if the service had been furnished without a telecommunications year, increased by the percentage (compared to $22.94 in
system. A facility fee is paid to the originating site (the site where the beneficiary is when
increase in the MEI.
2007).
the service is provided).
ŜǯȱȱȱȱǻǼȱ
Provider/service General payment policy
General update policy
Recent update
Durable Medical
Except in designated DMEPOS Competitive Bidding Areas, In general, fee schedule
The update for 2003 was 1.1%. As required by MMA,
Equipment (DME)
DME is paid on the basis of a fee schedule. Items are
amounts are updated
there were no updates for 2004, 2005, 2006, 2007, and
classified into five groups for purposes of determining the
annually by the CPI-U.
2008.
fee schedules and making payments: (1) inexpensive or
other routinely purchased equipment (defined as items
Updates were eliminated
To pay for the delay in the competitive acquisition
costing less than $150 or which are purchased at least 75% for 1998-2000; payments
program, MIPPA reduced the fee schedule update for 2009
of the times); (2) items requiring frequent and substantial
were increased by the CPI- by 9.5% for all items, services and accessories included in
servicing; (3) customized items; (4) oxygen and oxygen
U for 2001; and payments
round 1 of the competitive bidding program. For 2010
equipment; and (5) other items referred to as capped
were frozen for 2002. MMA through 2013, the fee schedule update will be the increase
rental items. In general, fee schedule rates are established
eliminated the updates for
in the CPI for all items and services outside of competitive
locally and are subject to national limits. The national limits 2004-2008.
bidding areas. For 2014, the update will be the CPI plus 2
have floors and ceilings. The floor is equal to 85% of the
percentage points for items and services that (1) had
weighted average of all local payment amounts and the
received the 9.5% reduction in 2009, (2) had not received a
ceiling is equal to 100% of the weighted average of all local
payment adjustment by the Secretary, and (3) were outside
payment amounts. Assignment is optional. Balance billing
of competitive bidding areas. For all other items, the
limits do not apply on non-assigned claims. Regular Part B
update in 2014 will be the CPI.
cost sharing applies. MMA required the Secretary begin a
The 10 items subject to a 9.5% reduction in all areas in
program of competitive acquisition for DME, prosthetics
2009 include oxygen supplies and equipment; standard
and orthotics. Competitive acquisition was to begin in 10
power wheelchairs, scooters and related accessories;
metropolitan statistical areas (MSAs) in 2007, expanding to
complex rehabilitative power wheelchairs and related
80 MSAs in 2008, and additional areas in 2009. The
accessories; mail-order diabetic supplies; enteral nutrients,
Secretary was authorized to phase-in competitive
equipment, and supplies; continuous positive airway
acquisition among the highest cost and highest volume
pressure (CPAP) devices and Respiratory Assist Devices
items and services or those items and services that the
(RADs) and related supplies; hospital beds and related
Secretary determined have the largest savings potential.
accessories; negative pressure wound therapy pumps and
The first round of bids were submitted on September 25,
related supplies and accessories; walkers and related
2007, and the program began on July 1, 2008. However,
accessories; and support surfaces, including group 2
MIPPA stopped the program, terminated all contracts with
ȬŘŖȱ

ȱ
Provider/service General payment policy
General update policy
Recent update
suppliers and required the Secretary to rebid the first
mattresses and overlays.
round in 2009. Expansion of the program was delayed by
two years until 2011.
ŝǯȱȱȱȱ
Provider/service General payment policy
General update
Recent update
policy
Prosthetics and
Except in designated DMEPOS competitive bidding areas as described above,
Fee schedule amounts
The update for 2003 was 1.1%. As required
orthotics
prosthetics and orthotics are paid on the basis of a fee schedule. These rates
are updated annually by by MMA, there were no updates for 2004,
are established regionally and are subject to national limits which have floors
the CPI-U. MMA
2005 and 2006. The update for 2007 was
and ceilings. The floor is equal to 90% of the weighted average of all regional
eliminated the updates
4.3%. The update for 2008 is 2.7%
payment amounts and the ceiling is equal to 120% of the weighted average of
for 2004-2006.
all regional payment amounts. Assignment is optional; balance billing limits do
No prosthetics or orthotics were included
not apply on non-assigned claims. Regular Part B cost sharing applies. MIPPA
in the first round of the DMEPOS
delayed implementation of the competitive acquisition program.
competitive acquisition program. Therefore,
the reduction in the fee schedule update, as
described above, does not affect prosthetics
or orthotics.
Şǯȱȱȱ
Provider/service General payment policy
General update Recent update
policy
Surgical Dressings Surgical dressings are paid on the basis of a fee schedule. Payment levels are computed using
See durable medical The update for 2003 was 1.1%.
the same methodology as the durable medical equipment fee schedule (see above). Assignment equipment fee
There was no update for 2004,
is optional; balance billing limits do not apply to non-assigned claims. Regular Part B cost
schedule.
2005, 2006, 2007, and 2008.
sharing applies.
şǯȱȱȱȱȱǻǼȱ
Provider/service General payment policy
General
Recent update
update
policy
Parenteral and
Except in designated DMEPOS competitive bidding areas as
Fee schedule
The 2008 rate increased by the CPI-U, is 2.7% (compared to
Enteral Nutrition
described above, parenteral and enteral nutrients, equipment, and amounts are
4.3% in 2007).
(PEN)
supplies are paid on the basis of the PEN fee schedule. Prior to
updated
ȬŘŗȱ

ȱ
Provider/service General payment policy
General
Recent update
update
policy
2002, PEN was paid on a reasonable charge basis (see below under annually by the
Miscellaneous Items and Services). The fee schedule amounts are
CPI-U.
To pay for the delay in the competitive acquisition program,
based on payment amounts made on a national basis to PEN
MIPPA reduced the fee schedule update for 2009 by 9.5% for all
suppliers under the reasonable charge system. Assignment is

items, services and accessories included in round 1 of the
optional; balance billing limits do not apply on non-assigned claims.
competitive bidding program. For 2010 through 2013, the fee
Regular Part B cost sharing applies. MIPPA delayed implementation
schedule update will be the increase in the CPI for all items and
of the competitive acquisition program.
services outside of competitive bidding areas. For 2014, the
update will be the CPI plus 2 percentage points for items and
services that (1) had received the 9.5% reduction in 2009, (2)
had not received a payment adjustment by the Secretary, and
(3) were outside of competitive bidding areas. For all other
items, the update in 2014 will be the CPI.
Enteral nutrients, equipment and supplies were included in the
first round of the program and are therefore subject to the
9.5% reduction in 2009.
ŗŖǯȱȱȱȱȱ
Provider/service General payment policy
General update policy
Recent update
Miscellaneous
Miscellaneous items and services here refers to those services still
Payments for reasonable charge items are calculated
The update to the
services
paid on a reasonable charge basis. Included are such items as splints, annually. Carriers determine a supplier’s customary
inflation-indexed
casts, home dialysis supplies and equipment, therapeutic shoes,
charge level. Prevailing charges may not be higher than
charge for 2007 is
certain intraocular lenses, blood products, and transfusion
75% of the customary charges made for similar items and 4.3%. The update to
medicine. These charges may not exceed any of the following fee
services in the locality during the 12-month period of July the inflation-indexed
screens: (1) the supplier’s customary charge for the item, (2) the
1- June 30 of the previous calendar year. The inflation-
charge for 2008 is
prevailing charge for the item in the locality, (3) the charges made
indexed charge is updated by the CPI-U.
2.7%.
to the carrier’s policyholders or subscribers for comparable items,
(4) the inflation-indexed charge. Assignment is optional; balance

billing limits do not apply on non-assigned claims. Regular Part B
cost sharing applies.
ŗŗǯȱ¢ȱȱȱǻǼȱ
Provider/service General Payment policy
General update policy
Recent update
Ambulatory
Starting January 1, 2008, Medicare will pay for surgery-
MMA eliminated the payment update for FY2005 under Beginning in CY2010, the ASC
Surgical Centers
related facility services provided in an ASC using a
the prior payment system, changed the update cycle to conversion factor will be updated
payment system based on the hospital outpatient
a calendar year from a fiscal year, and eliminated the
annually using the consumer price
ȬŘŘȱ

ȱ
Provider/service General Payment policy
General update policy
Recent update
(ASCs)
prospective payment system (OPPS). The new payment updates for calendar years 2006-2009. MMA also
index for all urban consumers
system will be implemented over a four-year transition established that a revised payment system for surgical
(CPI-U). In CY2008, the ASC
period. The ASC payment system uses the same
services furnished in an ASC will be implemented on or conversion factor was established
payment groups (APCs) as the OPPS. Many of the ASC after January 1, 2006, and not later than January 1, 2008. at 65% of the OPPS conversion
relative weights procedures will be the same as in
Total payments under the new system should be equal
factor or $41.401
OPPS. Certain services will be eligible for separate
to the total projected payments under the old system.
payments. The relative weights will be multiplied by a
As established by the TRHCA, starting in CY2009, the
conversion factor (average payment amount) to get a
annual increase for ASCs that do not submit required
payment for a specific procedure. The ASC conversion quality data may be the required update minus 2
factor is based on a percentage of the OPPS conversion percentage points. The reduction for not submitting
factor set to ensure budget neutrality between the old quality data would apply for the applicable year only,
ASC payment system and the new one. CMS uses
and not for subsequent years.
different methods to set payments for new office-based
procedures, separately payable radiology services,
separately payable drugs and device intensive services.
ŗŘǯȱ ȱȱȱ
Provider/service General payment policy
General update policy
Recent update
Hospital Outpatient Under HOPD-PPS, which was implemented in August
The conversion factor is updated on a calendar year For CY2007, the IPPS MB was
Departments
2000, the unit of payment is the individual service or
schedule. These annual updates are based on the
3.4%. This increase was adjusted by
(HOPDs)
procedure as assigned to one of about 570 ambulatory
hospital IPPS MB. As established by TRHCA, starting the required wage index and pass-
payment classifications (APCs). To the extent possible,
in CY2009, the update for hospitals that do not
through budget- neutrality factors,
integral services and items are bundled within each APC, submit required quality data will be the MB minus 2 including one to account for the
specified new technologies are assigned to new
percentage points. The reduction for not submitting rural SCH payment adjustment. The
technology APCs until clinical and cost data is available
quality data would apply for the applicable year, and final CY2007 conversion factor was
to permit assignment into a clinical APC. Medicare’s
would not be taken into account in subsequent
$61.468.
payment for HOPD services is calculated by multiplying
years.
the relative weight associated with an APC by a
For CY2008, the IPPS MB was
conversion factor. For most APCs, 60% of the
3.3%. This increase was adjusted by
conversion factor is geographically adjusted by the IPPS
the required wage index and pass-
wage index. Except for new technology APCs, each APC
through budget-neutrality factors,
has a relative weight that is based on the median cost of
including one to account for the
services in that APC. Certain APCs with significant
rural SCH payment adjustment. The
fluctuations in their relative weights will have the
final CY2008 conversion factor was
calculated change dampened. The HOPD-PPS also
$63.694.
includes budget-neutral pass-through payments for new

technology and budget-neutral outlier payments. Cancer
and children’s hospitals have a permanent hold harmless
protection from the HOPD-PPS. HOPDs in rural
ȬŘřȱ

ȱ
Provider/service General payment policy
General update policy
Recent update
hospitals with 100 or fewer beds (that are not SCHs)
will receive at least 95% of the payment it would have
received under the prior payment system during
CY2006. The percentage will be reduced to 90% during
2007 and 85% during 2008 and 2009. Starting for
services on January 1, 2006, rural SCHs will receive a
7.1% payment increase. SCHs with not more than 100
beds will receive 85% of the payment difference for
covered HOPD services furnished on or after January 1,
2009, and before January 1, 2010.
Over time, under Medicare’s prior payment system,
beneficiaries’ share of total outpatient payments grew to
50%. HOPD-PPS slowly reduces the beneficiary’s
copayment for these services. Copayments will be frozen
at 20% of the national median charge for the service in
1996, updated to 1999. Over time, as PPS amounts rise,
the frozen beneficiary copayments will decline as a share
of the total payment until the beneficiary share is 20% of
the Medicare fee schedule amount. A beneficiary
copayment amount for a procedure is limited to the
inpatient deductible amount established for that year.
Balance billing is prohibited.
ŗřǯȱȱ ȱȱȱ¢ȱȱ ȱȱǻ Ǽȱȱ
Provider/service
General payment policy
General update policy
Recent update
Rural Health Clinics (RHCs) RHCs and FQHCs are paid on the basis of an all-inclusive rate for each
Payment limits are updated on For CY2007, the RHC upper
and Federally Qualified
beneficiary visit for covered services. An interim payment is made to the
January 1 of each year by the
payment limit was $74.29, the
Health Center (FQHCs)
RHC or FQHC based on estimates of allowable costs and number of visits; a Medicare economic index
urban FQHC limit was
services
reconciliation is made at the end of the year based on actual costs and visits. (MEI) which measures inflation $115.33,and the rural FQHC
Per-visit payment limits are established for all RHCs (other than those in
for certain medical services.
limit was $99.17.
hospitals with fewer than 50 beds) and FHQCs. Assignment is mandatory; no
deductible applies for FHQC services.
For CY2008, the RHC upper
payment limit is $75.63, the
urban FQHC limit is $117.41,
and the rural FQHC limit is
$100.96.
ȬŘŚȱ

ȱ
ŗŚǯȱȱȱȱ¢ȱǻǼȱ
Provider/service
General payment policy
General update policy
Recent update
Comprehensive Outpatient CORFs provide (by or under the supervision of physicians) outpatient diagnostic, See physician fee schedule
See physician fee schedule
Rehabilitation Facility
therapeutic and restorative services. Payments for services are made on the basis and outpatient physical and
and outpatient physical and
(CORF)
of the physician fee schedule. Therapy services are subject to the therapy limits
occupational therapy
occupational therapy
(described above for physical and occupational therapy providers).
services.
services.
ŗśǯȱȱȱȦȱȱȱȱȱ¢Ȃȱȱ
Provider/service
General payment policy
General update policy
Recent
update
Drugs/vaccines. Medicare covers outpatient drugs
Drug products, except for pneumococcal, influenza, and The ASP is updated quarterly by the Secretary. No
and biologicals under the Part B program that are
hepatitis B vaccines, those associated with certain renal Payments under the ASP method may be
specific
authorized by statute, including those: (1) that are
dialysis services, blood products and clotting factors
lowered by the Secretary if the ASP exceeds
provision.
covered if they are usually not self-administered and and radiopharmaceuticals, are paid using the average
the widely available market price or average
are provided incident to a physician’s services; (2)
sales price (ASP) methodology. Alternatively, payment
manufacturer price by a specified percentage
those that are necessary for the effective use of
may be made through the competitive acquisition
(5% in 2006 to present, as determined by the
covered DME; (3) certain self-administered oral
program. Medicare’s payment under the ASP
Secretary). In such cases, the payment would
cancer and anti-nausea drugs (those with injectable
methodology equals 106% of the applicable price for a
equal the lesser of the widely available market
equivalents); (4) erythropoietin (used to treat
multiple source drug or single source drug subject to
price or 103% of the average manufacturer
anemia); (5) immunosuppressive drugs after covered beneficiary deductible and coinsurance amounts.
price. Several OIG reports found that the
Medicare organ transplants; (6) hemophilia clotting
Regular Part B cost sharing applies, except for
percentage was exceeded for some drugs and
factors; and (7) vaccines for influenza, pneumonia,
pneumococcal and influenza virus vaccines.
the Secretary has chosen not to exercise the
and hepatitis B.
option of lowering the payment rate for these
drugs.
ŗŜǯȱȱ
Provider/service General payment policy
General update policy
Recent
update
Blood
Medicare pays the reasonable cost for pints of blood, starting with the fourth pint, There is no specific update for the reimbursement of
No
and blood components that are provided to a hospital outpatient as part of other Part B blood costs. The outpatient facility is paid 100%
specific
services. (Blood that is received in an IPPS hospital is bundled in the DRG
of its reasonable costs as reported on its cost-reports.
update.
payment.) For IPPS-excluded hospitals, Medicare pays allowable costs for blood.
See the section on IPPS hospitals for updates for blood
Beneficiary pays for first three pints of blood in a year, after which regular Part B
included as part of these hospitals.
cost sharing applies.
ȬŘśȱ

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ŗŝǯȱȱ £ȱȱȱȱȱȱȱȱ
Provider/service
General payment policy
General update Recent update
policy
Partial hospitalization
Medicare provides Part B hospital outpatient care payments for “partial hospitalization” mental
See physician fee
See physician fee
services connected to
health care. The services are covered only if the individual would otherwise require inpatient
schedule and
schedule and
treatment of mental illness
psychiatric care. Services must be provided under a program which is hospital-based or hospital-
hospital outpatient hospital outpatient
affiliated and must be a distinct and organized intensive ambulatory treatment service offering less services.
services.
than 24-hour daily care. The program may also be covered when provided in a community mental
health center. Payment for professional services is made under the physician fee schedule. Other
services are paid under the hospital outpatient prospective payment system. Regular Part B cost
sharing applies; balance billing is prohibited.
ŗŞǯȱȱȱ
Provider/service General payment policy
General
Recent update
update policy
Ambulance
Ambulance services are paid on the basis of a national fee schedule, which The fee schedule The update for 2008 is 2.7% (compared to 4.3% in
services
is being phased-in. The fee schedule establishes seven categories of ground amounts are
2007). Other provisions may change the applicable rate.
ambulance services and two categories of air ambulance services. The
updated each
MIPPA increases payments for ground ambulance
ground ambulance categories are: basic life support (BLS), both emergency year by the CPI- transports originating in rural areas or rural census tracts
and nonemergency; advanced life support Level 1 (ALS1), both emergency U.
by 3% and the payments for such transports originating in
and nonemergency; advanced life support Level 2 (ALS2); speciality care
other areas by 2% for the period July 1, 2008-December
transport (SCT); and paramedic ALS intercept (PI). The air ambulance
31, 2009.
categories are: fixed wing air ambulance (FW) and rotary wing air
ambulance (RW).
The national fee schedule is fully phased-in for air ambulance services. For
ground ambulance services, payments through 2009 are equal to the
greater of the national fee schedule or a blend of the national and regional
fee schedule amounts. The portion of the blend based on national rates is
80% for 2007-2009. In 2010 and subsequently, the payments in all areas
will be based on the national fee schedule amount.
The payment for a service equals a base rate for the level of service plus
payment for mileage. Geographic adjustments are made to a portion of
the base rate. For the period July 1, 2004 to December 31, 2009, mileage
payments are increased by 22.6% for ground ambulance services
originating in rural, low population density areas. There is a 25% bonus on
the mileage rate for trips of 51 miles and more from July 2004-December
2008. MIPPA specifies that any area designated as rural for the purposes
of making payments for air ambulance services on December 31, 2006,
ȬŘŜȱ

ȱ
Provider/service General payment policy
General
Recent update
update policy
will be treated as rural for the purpose of making air ambulance payments
during the period July 1, 2008-December 31, 2009.
Regular Part B cost sharing applies. Assignment is mandatory.
ȱȱȱȱ
ŗǯȱ ȱ ȱ
Provider/service General payment policy
General update policy
Recent update
Home health
Home health agencies (HHAs) are paid under a
The base payment amount, or national standardized 60-
For CY2008, HHAs that submit
services
prospective payment system that began in FY2001.
day episode rate, is increased annually by an update
the required quality data using
Payment is based on 60-day episodes of care for
factor that is determined, in part, by the projected
OASIS received a HH MB update
beneficiaries, subject to several adjustments, with
increase in the HH market basket (MB) index. This index of 3.0%. For HHAs that failed to
unlimited episodes of care in a year. The payment covers measures changes in the costs of goods and services
submit the required quality data,
skilled nursing, therapy, medical social services, aide
purchased by HHAs.
the HH MB update was reduced
visits, medical supplies, and others. Durable medical
by 2 percentage points to 1.0%.
equipment is not included in the home health (HH) PPS. DRA specified that HHAs that submit the data for
The base payment amount is adjusted for: (1) differences purposes of measuring health care quality, as specified by For FY2009, the HH MB update
in area wages using the hospital wage index; (2)
the Secretary would receive a full MB increase; while
has not yet been published by
differences in the care needs of patients (case mix) using HHAs that do not submit such data would receive an
CMS.
“home health resource groups” (HHRGs); (3) outlier
update equivalent to the MB update minus 2 percentage The base payment amount, or
visits (for the extraordinarily costly patients); (4) a
points. This requirement was applicable for CY 2007 and national standardized 60-day
significant change in a beneficiary’s condition (SCIC); (5) each subsequent year.
episode payment rate, will be
a partial episode for when a beneficiary transfers from
In CY 2008, refinements to the Medicare HH PPS
reduced by 2.75 percent for first
one HHA to another during a 60-day episode; (6) budget included a reduction in the national standardized 60-day three years (2008, 2009, and
neutrality; and (7) a low utilization payment adjustment
episode payment rate for 4 years to account for changes 2010) and a 2.71 percent
(LUPA) for beneficiaries who receive four or fewer
in case mix that are not related to home health patients’ reduction in the fourth year, 2011.
visits. There is no difference between urban and rural
actual clinical conditions; changes to the case-mix model
base payment amounts.
to account differently for comorbidities and the differing
The HHRG applicable to a beneficiary is determined
health characteristics of longer-stay patients; changes to
following an assessment of the patient’s condition and
the way the PPS accounts for the impact of rehabilitation
care needs using the Outcome and Assessment
services on resource use to reduce the impact of
Information Set (OASIS). After the assessment, a
financial incentives on the delivery of therapy visits; and
beneficiary is categorized in one of 80 HHRGs that
an increased payment for LUPA episodes that occur as
reflect the beneficiary’s clinical severity, functional status, the only episode or the first episode during a period of
and service requirements.
HH to account for front-loading of costs; among other
ȬŘŝȱ

ȱ
Provider/service General payment policy
General update policy
Recent update
HHAs are paid 60% of the case-mix and wage-adjusted
changes.
payment after submitting a request for anticipated
payment (RAP). The RAP may be submitted at the
beginning of a beneficiary’s care once the HHA has
received verbal orders from the beneficiary’s physician
and the assessment is completed. The remaining
payment is made when the beneficiary’s care is
completed or the 60-day episode ends.
ŘǯȱȬȱȱȱ
Provider/service General payment policy
General update policy
Recent update
End-stage renal
Dialysis services are offered in three outpatient
MMA provided for an update to the composite
For CY2008, only the drug add-on adjustment
disease
settings: hospital-based facilities, independent
rate beginning January 1, 2005. Since April 1,
of the composite rate was
facilities, and the patient’s home. There are two
2005 the composite rate has been case-mixed
methods for payment. Under Method I, facilities
adjusted, budget neutrally. The Secretary was
increased, by 0.5 percent. As a result, the drug
are paid a prospectively set amount, known as the required to update the basic wage-adjusted case- add-on adjustment to the composite rate
composite rate, for each dialysis session,
mix payment amounts annually beginning with
payment increased from 14.9.% to 15.5%.
regardless of whether services are provided at the 2006, but only for that portion of the case-mix
Additionally, the wage data was updated,
facility or in the patient’s home. The composite
adjusted system that is represented by the add-
implementing the third year of the wage index
rate is derived from audited cost data and
on adjustment and not for the portion
transition using a 25/75 blended wage adjusted
adjusted for the national proportion of patients
represented by the composite rate.
composite rate (based 25% on an ESRD facility’s
dialyzing at home versus in a facility, and for area
Metropolitan Statistical area [MSA] designations
wage differences. Beneficiaries electing home
MIPPA changed the payment increases for the
and 75% on its Core Based Statistical area
dialysis may choose not to be associated with a
composite rate in 2009 and 2010.
[CBSA] geographic area designations).
facility and may make independent arrangements
As required by MIPPA, estimated Medicare total The composite rate for dialysis services
with a supplier for equipment, supplies, and
dialysis payments for 2011 will equal 98% of
furnished on or after January 1, 2009, and before
support services. Payment to these suppliers,
payments that would have been made if the
January 1, 2010, will be increased by 1% above
known as Method II, is made on the basis of
bundled payment system had not been
the December 31, 2008 amount. Beginning
reasonable charges, limited to 100% of the median implemented.
January 1, 2010, the composite rate will be
hospital composite rate, except for patients on
increased by 1% above the December 31, 2009
continuous cycling peritoneal dialysis, when the
Beginning in 2012, the Secretary will annually
amount.
limit is 130% of the median hospital composite
increase the bundled payment amounts by an
rate. Assignment is mandatory; regular Part B cost ESRD market basket increase factor appropriate
sharing applies. Kidney transplantation services, to for a bundled payment system for renal dialysis
the extent they are inpatient hospital services, are minus 1 percentage point. For the portion of the
subject to the PPS. However, kidney acquisition
payment based on the old composite rate
costs are paid on a reasonable cost basis.
system, the composite rate will be updated by
the ESRD market basket increase factor minus 1
MMA required the Secretary to establish a basic
percentage point.
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Provider/service General payment policy
General update policy
Recent update
case-mix adjusted prospective payment system for
dialysis services furnished either at a facility or in a Beginning in January 1, 2012, providers of renal
patient’s home, for services furnished beginning
dialysis services and renal dialysis facilities will be
on January 1, 2005. The basic case-mix adjusted
subject to quality incentive requirements and
system has two components: (1) the composite
they will be subject to a reduction of up to 2% if
rate, which covers services, including dialysis; and they do not meet the requirements.
(2) a drug add-on adjustment for the difference
between the payment amounts for separately
billable drugs and biologicals and their acquisition
costs, as determined by Inspector General
Reports.
MIPPA changed payments for dialysis. Beginning
January 1, 2009, the payment rate for dialysis
services will be “site neutral” and in applying the
geographic index to providers of services, the
labor share will be based on the labor share
otherwise applied for renal dialysis facilities.
Adjustments will no longer be made to the
composite rate for hospital-based dialysis facilities
to reflect higher overhead costs.
MIPPA requires the Secretary to implement a
bundled payment system, making a single payment
for Medicare renal dialysis services, beginning
January 1, 2011. The bundled payment will include
items and services which were included in the
composite rate as of December 31, 2010,
erythropoiesis stimulating agents (ESAs) and other
drugs and biologicals paid for separately (before
bundling), and diagnostic laboratory tests among
other items. It will not include vaccines.
Payments will include adjustments for case mix,
high cost outliers (including variations in the
amount of ESAs), and costs in rural, low-volume
facilities (with a minimum payment adjustment of
10% for services furnished between January 1,
2011, and January 1, 2014), among others.
The bundled payments system will be phased-in
equally (and budget neutrally) over four years. It
will be fully implemented by January 1, 2014.
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Provider/service General payment policy
General update policy
Recent update
(a) Medicare
In general, Medicare makes a monthly payment in The MA payments aredetermined annually by the For CY2008, in each county, the MA
advantage contracts advance to participating Medicare Advantage
method described under “General Payment
benchmarks was updated by the national MA
(MA) health plans for each enrolled beneficiary in Policy.”
growth percentage, adjusted for budget
a payment area. In exchange, the plans agree to
neutrality—an increase of 3.5%. For CY2009,
furnish all Medicare-covered items and services
The benchmark for MA plans is updated annually MA benchmarks will be updated by the greater
to each enrollee. For most MA plans, the
by the minimum percentage increase, or in
of either the previous year’s benchmark
actuarial value of basic cost sharing, less any
certain years, 100% of FFS spending in the area
increased by the national MA growth percentage
reduced cost sharing resulting from plan savings, (the rebased amount). The minimum percentage adjusted for budget neutrality—an increase of
may not exceed the actuarial value of cost
increase is the greater of (1) a 2% increase over 3.6%, or 100% FFS spending.
sharing under original Medicare.
the prior year’s benchmark, or (2) the prior
year’s benchmark increased by the national MA
Beginning in 2010, MIPPA requires that the value
Congress made substantial changes to the
growth percentage (projected increase in Medicare of indirect medical education be phased-out of all
Medicare+Choice program with the passage of
per capita expenditures). In years when the
benchmarks. The amount phased-out each year
the MMA in 2003. The act created the Medicare Secretary decides to rebase FFS rates, the
will be based on a ratio of (1) a specified
Advantage (MA) program, which replaced the
benchmark for each county is updated by the
percentage (0.60% in the first year), relative to
M+C program and introduced several changes
greater of: (1) a 2% increase over the prior
(2) the proportion of per capita costs in original
designed to increase the availability of private
year’s benchmark, (2) the national MA growth
medicare in the county that IME costs represent.
plans for Medicare beneficiaries. In addition to
percentage, or (3) 100% of FFS spending adjusted The effect of the ratio is to phase-out a higher
the immediate payment increases to plans,
to exclude the value of Medicare direct medical
proportion of IME costs in areas where IME
beginning in 2006 the MA program changed the
education payments (but including the value of
makes up a smaller percentage of per capita
payment structure and introduced regional plans indirect medical education payments). After
spending in original Medicare. After 2010, the
that operate like Preferred Provider
determining the annual update, the Secretary
numerator of the phase-out percentage will be
Organizations. Additionally, beneficiaries had
adjusts the benchmark for the health status of
increased by 0.60 percentage points each year.
access to a drug plan whether they were
enrollees (risk adjustment) and budget neutrality.
enrolled in FFS Medicare or private plan. Finally,

beginning in 2010 a limited number of geographic Beginning in 2004 and at a minimum every third
areas will be selected to examine enhanced
year, the Secretary is required to rebase FFS
competition between local MA plans and
payment rates. Rebasing is updating FFS rates to
competition between private plans and FFS
reflect recent growth in county health care costs.
Medicare.
The Secretary did not rebase in 2008, so the
benchmark amount for each county in 2008 is
In 2006, the Secretary began determining MA
the prior year’s rate increased by the national
plan payments by comparing plan bids to a
MA growth percentage (which was larger than a
benchmark. A plan’s bid is its estimated revenue
2% increase). In 2009, the Secretary will rebase
requirement of providing Part A and B Medicare benchmarks, which means that the benchmark
services to beneficiaries (including cost of
for each county will be the greater of either a
services, administration, and profit). A
minimum percent increase, or the rebased
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Provider/service General payment policy
General update policy
Recent update
benchmark is the maximum amount the federal
amount.
government is willing to pay a plan for providing
these required benefits. If a plan’s bid is less than The update to the benchmark for regional plans
the benchmark, its payment is equal to its bid
has both a statutory increase and a competitive
plus a rebate of 75% of the difference between
increase. The statutory component is similar to
its bid and the benchmark. The remaining 25% of the update for other MA plans and the
the difference is retained by the federal
competitive component is based on a weighted
government. (For regional plans described below, average of plan bids.
half of the 25% difference is added to a
DRA made additional changes to the calculation
stabilization fund for regional plans.) If a plan’s
of the benchmark. Beginning in 2007,
bid is greater than the benchmark, its payment is benchmarks continue to be updated by the
equal to the benchmark amount and the plan
minimum percentage increase, or 100% of FFS in
must make up the difference between its bid and certain years. However, the DRA added two
the benchmark by charging a beneficiary
new adjustments to calculating the benchmark:
premium. The Secretary has the authority to
(1) an adjustment to exclude any national
review and negotiate plan bid amounts to ensure adjustment factors for coding intensity, and (2)
that the bid reflects revenue requirements. At
an adjustment to exclude budget neutrality in
least one plan offered by an MA organization
risk adjustment for years 2007 through 2010. For
must be an MA-PD plan, one that offers Part D
purposes of calculating the phase-out of budget
prescription drug coverage. MA organizations
neutrality in risk adjustment, the Secretary is
offering prescription drug coverage receive a
required to conduct a study of the difference
direct subsidy for each enrollee in their MA-PD
between treatment and coding patterns between
plan, equal to the plan’s risk adjusted
MA plans and providers under Parts A and B of
standardized bid amount (reduced by the base
Medicare. The findings are to be incorporated
beneficiary premium). The plans also receive a
into calculations of MA benchmarks in 2008,
reinsurance payment amount for the federal
2009, and 2010. The Secretary has not been able
share of their payment as well as premium and
to make an adjustment for coding intensity as
cost-sharing reimbursements for qualified low-
required as they are continuing to study the
income enrollees.
issue.
Also beginning in 2006, the MA program began
Eliminating budget neutrality for risk adjustment
offering regional plans covering both in- and out- would not occur in any year if it would increase
of-network required Medicare services. To
payments.
encourage regional plan participation in the
program, Congress authorized various financial
incentives. For years 2006 and 2007, Medicare
shared risk with plans whose costs fell above or
below certain statutorily defined risk corridors.
Additional payments were also authorized in
certain circumstances for hospitals that would
not otherwise join a private plan’s network.
Finally, Congress created a stabilization fund to
provide incentives for regional plans to enter
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Provider/service General payment policy
General update policy
Recent update
into and to remain in the MA program. The
stabilization fund was initially set at $10 billion
plus additional amounts equal to a portion of the
savings from the regional plans bidding process. It
was to be available for years 2007 through 2013.
However, several pieces of legislation introduced
after the MMA eliminated the initial $10 billion
and delayed the availability of money added to
the fund from the bidding process. Money from
the stabilization fund will be available in 2014.
A six-year program will begin in 2010 to examine
comparative cost adjustment (CCA) in
designated CCA areas. Payments to MA plans in
CCA areas will, in part, be based on competitive
bids. Also, Part B premiums for individuals
enrolled in traditional Medicare may be adjusted,
either up of down. This program will be phased-
in and there is also a 5% annual limit on the
adjustment, so that the amount of the
adjustment to the beneficiary’s premium for a
year can not exceed 5% of the amount of the
monthly Part B premium, in non-CCA areas.
(b) Cost contracts Medicare pays cost contract health maintenance No specific update. Cost-based HMOs are paid
No specific update.
organizations (HMOs) and competitive medical
100% of their actual costs.
plans (CMPs) the actual costs they incur for
furnishing Medicare-covered services (less the
estimated value of required Medicare cost
sharing), subject to a test of “reasonableness.”
Interim payment is made to the HMO/CMP on a
monthly per capita basis; final payment reconciles
interim payments to actual costs.
Beginning January 1, 2010, cost contracts can not
be extended or renewed in a service area if,
during the entire previous year, the service area
had two or more MA regional plans or two or
more MA local plans offered by different
organizations.
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Provider/service
General payment policy
General update policy
Recent update
Part D drug coverage. Outpatient
Federal payments to plans are linked to
The definition of standard coverage is
In 2009, “standard coverage” has a
prescription drug coverage is provided
“standard coverage.” Qualified Part D plans updated annually based on the
$295 deductible, 25% coinsurance for
through private prescription drug plans (PDPs) are required to offer either “standard
estimated increase in per capita costs
costs between $296 and $2,700. From
or MA prescription drug (MA-PD) plans. The coverage” or alternative coverage, with at for the 12 month period ending the
this point, there is no coverage until
program relies on these private plans to
least actuarially equivalent benefits. For
previous July.
the beneficiary has out-of-pocket
provide coverage and to bear some of the
2009, most plans offer actuarially
costs of $4,350 ($6,153.75 in total
financial risk for drug costs; federal subsidies
equivalent benefits or enhanced coverage
spending); this coverage gap has been
cover the bulk of the risk. Unlike other
rather than the standard package. A
labeled the “doughnut hole.” Once
Medicare services, the benefits can only be
number of plans have reduced or
the beneficiary reaches the
obtained through private plans. While all plans eliminated the deductible. Many plans offer
catastrophic limit, the program pays
have to meet certain minimum requirements, tiered cost sharing under which lower cost
all costs except for nominal cost
there are significant differences among them in sharing applies for generic drugs, higher
sharing.
terms of benefit design, beneficiary premiums cost sharing applies for preferred brand
amounts, drugs included on plan formularies
name drugs, and even higher cost sharing
(i.e. list of covered drugs) and cost sharing
applies for non-preferred brand name
applicable for particular drugs.
drugs. Some plans provide some coverage
in the coverage gap (“doughnut hole”); this
is generally limited to generic drugs.
Federal Subsidy Payments
Federal subsidy payments (including both
Payments to plans are calculated
Federal payments were recalculated
direct payments and reinsurance payments) annually by the method described
for the 2009 plan year.
are made to plans consistent with an
under “General Payment Policy.”
overall subsidy level of 74.5% for basic
coverage. Direct monthly per capita
payments are made to a plan equal to the
plan’s standardized bid amount adjusted for
health status and risk and reduced by the
base beneficiary premium, as adjusted to
reflect the difference between the bid and
the national average bid. Reinsurance
payments, equal to 80% of allowable costs,
are provided for enrollees whose costs
exceed the annual out-of-pocket threshold
($4,350 in 2009).
Beneficiary Premiums
Beneficiary premiums represent on average Beneficiary premiums are calculated
Beneficiary premiums were
25.5% of the cost of the basic benefit. A
annually by the method described
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Provider/service
General payment policy
General update policy
Recent update
base beneficiary premium is calculated
under “General Payment Policy.”
recalculated for the 2009 plan year.
based on the national average monthly bid
amount for basic coverage. This amount is
adjusted, up or down as appropriate, to
reflect differences between the plan’s
standardized bid amount and the national
average monthly bid amount. It is further
increased for any supplemental benefits and
decreased if the individual is entitled to a
low-income subsidy. The premium is the
same for all individuals in a particular plan
(except those entitled to a low income
subsidy).
Risk corridors
The federal government and plans share
In 2006 and 2007, plans were at full
The 2009 risk corridors are modified,
the risk for costs within specified “risk
risk for costs within 2.5% above or
as described under “General Update
corridors.”Risk corridors” are specified
below the target. If costs were
Policy.”
percentages for costs above and below a
between 2.5% and 5% above the target,
target amount; the target amount is defined they were at risk for 25% of spending
as total payments paid to the plan taking
between 2.5% and 5% of the target and
into account the amount paid to the plan
20% of spending above that amount. If
by the government and enrollees.
plans fell below the target, they have to
refund 75% of the savings if costs fall
between 2.5% and 5% below the target
and 80% of any amounts below 5% of
the target. For 2008-2011, risk
corridors are modified. Plans are at full
risk for spending within 5% above or
below the target. They are at risk for
50% of spending between 5% and 10%
of the target and 20% of any spending
exceeding 10% of the target.

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CRS Report RL33712, Medicare: A Primer, by Jennifer O’Sullivan.
CRS Report RL31966, Overview of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, by Jennifer O’Sullivan et al.
CRS Report RL34360, P.L. 110-173: Provisions in the Medicare, Medicaid, and SCHIP
Extension Act of 2007, by Hinda Chaikind et al.
CRS Report RL34592, P.L. 110-275: The Medicare Improvements for Patients and Providers Act
of 2008, by Hinda Chaikind et al.
CRS Report RS20173, Medicare: Financing the Part A Hospital Insurance Program, by Jennifer
O’Sullivan.
CRS Report RS20946, Medicare: History of Part A Trust Fund Insolvency Projections, by
Jennifer O’Sullivan.
CRS Report RL34407, The President’s Proposed Legislative Response to the Medicare Funding
Warning, by Hinda Chaikind et al.
CRS Report RS22796, Medicare Trigger, by Hinda Chaikind and Christopher M. Davis.
CRS Report RL31199, Medicare: Payments to Physicians, by Jennifer O’Sullivan.
CRS Report RS22769, Medicare Clinical Laboratories Competitive Bidding Demonstration, by
Barbara English.
CRS Report RS21731, Medicare: Part B Premium Penalty, by Jennifer O’Sullivan.
CRS Report RL33587, Medicare Secondary Payer - Coordination of Benefits, by Hinda
Chaikind.
CRS Report RL34280, Medicare Part D Prescription Drug Benefit: A Primer, by Jennifer
O’Sullivan.
ȱǰȱ¢ȱȱȱ
Topic
Staff Member
Phone Number
Part A
Hospice Care
Julie Stone
7-1386
Inpatient Hospital Services
Sibyl Tilson
7-7368
Inpatient Rehabilitation Facilities
Sibyl Tilson
7-7368
Medical Devices
Gretchen Jacobson
7-1686
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Topic
Staff Member
Phone Number
Skilled Nursing Facilities
Julie Stone
7-1386
Part B
Ambulatory Surgical Center Services
Sibyl Tilson
7-7368
Durable Medical Equipment
Paulette Morgan
7-7317
Outpatient Hospital Services
Sibyl Tilson
7-7368
Part B Prescription Drugs
Gretchen Jacobson
7-1686
Physicians and Other Part B Providers
Jim Hahn
7-4914
Premiums Jim
Hahn
7-4914
SGR options
Jim Hahn
7-4914
Parts A&B
Beneficiary Issues
Jim Hahn
7-4914
Hinda Chaikind
7-7569
End Stage Renal Disease (ESRD)
Gretchen Jacobson
7-1686
Home Health Services
Julie Stone
7-1386
Part C
Medicare Advantage
Paulette Morgan
7-7317
Part D
Benefits & Premiums
Jim Hahn
7-4914
Gretchen Jacobson
7-1686
Drug Pricing
Jim Hahn
7-4914
Administration
Integrity (fraud, waste, and abuse)
Holly Stockdale
7-9553
Quality Improvement Organizations
Holly Stockdale
7-9553
Other
Medicare Secondary Payer
Hinda Chaikind
7-7569
Medicare Trigger
Hinda Chaikind
7-7569
Medicare HI & SMI Trust Fund Financing
Hinda Chaikind
7-7569
Medigap Hinda
Chaikind
7-7569
Pay for Performance/Value-Based Purchasing
Jim Hahn
7-4914
Price Transparency
Jim Hahn
7-4914
Rural Issues
Sibyl Tilson
7-7368

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Paulette C. Morgan, Coordinator
Hinda Chaikind
Specialist in Health Care Financing
Specialist in Health Care Financing
pcmorgan@crs.loc.gov, 7-7317
hchaikind@crs.loc.gov, 7-7569
Barbara English
Jim Hahn
Information Research Specialist
Analyst in Health Care Financing
benglish@crs.loc.gov, 7-1927
jhahn@crs.loc.gov, 7-4914
Gretchen A. Jacobson
Julie Stone
Analyst in Health Care Financing
Specialist in Health Care Financing
gjacobson@crs.loc.gov, 7-1686
jstone@crs.loc.gov, 7-1386
Sibyl Tilson

Specialist in Health Care Financing
stilson@crs.loc.gov, 7-7368

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