Americans living longer; some pay more for outpatient services

life-expectancyTwo new reports again underscore the need for a comprehensive national long-term services and support initiative.

First, the good news: A new National Center for Health Statistics data brief shows that Americans are living longer. Overall life expectancy rose by 0.1 percent from 2011 to 2012, to 78.8 years, and was highest for non-Hispanic whites and non-Hispanic blacks. Women can expect to live an average of 81.2 years, and men an average of 76.4 years, based on the new analysis.

The report also shows significant decreases in age-adjusted death rates for eight of the 10 leading causes of death: heart disease, cancer, chronic lower respiratory diseases, diabetes, stroke, influenza, pneumonia and kidney disease.

Now the bad news – a new report released by the Office of the Inspector General in the Department of Health and Human Services found increased costs associated with critical access hospitals. Medicare beneficiaries paid nearly half of the costs for outpatient services at critical access hospitals – a higher percentage of the costs of coinsurance for services received at these facilities than they would have paid at hospitals using Outpatient Prospective Payment System rates.

Critical access hospitals (CAHs) ensure that rural Medicare beneficiaries have access to hospital services. Reimbursement is at 101 percent of their “reasonable costs,” rather than at the predetermined rates set by the Outpatient Prospective Payment System. Medicare beneficiaries who receive services at CAHs pay coinsurance amounts based on CAH charges; beneficiaries who receive services at acute care hospitals pay coinsurance amounts based on OPPS rates.

OIG used 2009 and 2012 claims data to calculate the percentages and amounts of coinsurance that Medicare beneficiaries paid toward the costs for outpatient services frequently provided at CAHs and compared them with percentages and amounts of coinsurance that beneficiaries would have paid for these same outpatient services at acute-care hospitals. Specific examples are listed in Appendix B of the report.

They found that “because coinsurance amounts were based on [CAH] charges, Medicare beneficiaries paid nearly half the costs for outpatient services at CAHs, or between two and six times the amount in coinsurance that they would have for the same services at acute-care hospitals. This figure was approximately $1.5 billion of the estimated $3.2 billion cost for CAH outpatient service, an increase of 2 percent between 2009 and 2012.

The report recommends that CMS seek legislative authority to modify how coinsurance is calculated for outpatient services received at CAHs. CMS has not yet made a determination about this recommendation.

Journalists can create their own comparisons using the Hospital Compare database (also available as Excel files from AHCJ), and the Research Assistance Database to analyze NCH Claims data and compare costs in their communities.

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