WASHINGTON—In its most recent report to Congress, the Medicare Payment Advisory Commission found that the use of services by similar beneficiaries varies substantially from the highest- to the lowest-use areas of the country.
Variation is especially high for post-acute sector services, such as home health, the Jan. 5 report found. "Nonetheless, areas that are high use in one sector (such as inpatient, ambulatory, and post-acute) tend to be high use overall, and all three sectors contribute to overall variation."
At its extremes, the report highlighted a twofold difference between the metropolitan statistical areas with the greatest service use—Miami and McAllen, Texas—and the areas with the least use—nonmetropolitan Hawaii and LaCrosse, Wis.
While many factors drive service use, such as differences in physician practice patterns and care decisions and differences in beneficiaries’ predilection for seeking care, the report said, “service use among areas could differ for more idiosyncratic reasons as well.”
Pointing to DME as an example, the report said spending per capita in Miami-Dade County was $2,043 in 2006—about 10 times as high as in neighboring Collier County, five times as high as in Broward County and nearly eight times the national average. While DME spending had decreased significantly in Miami-Dade by 2008, the report said, “it was still well above spending in the surrounding counties and almost three times the national average.”
Over the same time, per capita spending on home health in the area doubled, increasing from $2,591 in 2006 to $5,318 by 2008. (It increased in neighboring counties as well.) “Variation at the level found in Miami-Dade cannot be explained by simple differences in practice patterns, prices, or health status. Rather, it is likely evidence of fraud, as is suggested by many OIG reports on the topic,” the report said.
The report noted that it’s also possible the home health spending increases show the migration of health care fraud.
The report was intended only to inform policymakers about the nature of regional variation in service use, its authors pointed out. However, they concluded, “Extremely high levels of service use in certain areas may be driven by overuse and, possibly, fraud and abuse. Additional policy measures may have to be taken in those areas beyond those used to address variation in general.”
MedPAC is an independent commission that advises lawmakers on Medicare policy, including payments to fee-for-service providers.
Read the full report, titled “Regional Variation in Medicare Service Use,” at http://medpac.gov/documents/Jan11_RegionalVariation_report.pdf.