Background on the Data Sources

1
Background on the Data Sources
Task Force On Physician and Health Professional
Reimbursement September 20, 2007
2
What must be done?

• Examine
• Reimbursement rates and total payments paid to
  health care providers by specialty and region.
• Impact of changes in reimbursements on access,
  health care disparities, and quality of care.
• Impact of competition and market concentration on
  payments to health care providers.
• Provider shortages by specialty and geographic
  area and assess impact on health care access and
  quality.
• Uncompensated care provided by health care
  providers in Maryland and in other states.
• Current reimbursement methods to determine
  whether they reward higher quality of care.
• Methods used by large purchasers of health care
  to assess adequacy and cost of provider networks.
  
• Should health insurance carriers be allowed to
  require health care providers as a condition of
  participation to also be in the provider network
  of another carrier.

3
Data and Caveats about the Sources

• Essential information that exists
• Insurance premiums and total spending levels and
  trends (National Surveys and Office of Insurance
  Commissioner)
• Physician and other health professional supply
  (licensing boards and professional societies)
• Levels and percent change in utilization and
  reimbursement for health professional and other
  services (professional services claims from
  carriers and surveys)
• Information on productivity by providers
  (provider surveys, some national sources)
• Comparability between Maryland and the US data
  sources is variable.

4
Data and Caveats about the Sources

• Some essential information is limited
• Prevalence of conditions by demographic
  characteristics among privately insured
  populations.
• Quality and outcome data is extremely sparse.
• Task Force will need to rely on efforts in
  progress, i.e. work at CMS, some activities
  through National Quality Forum, and Bridges to
  Excellence.

5
Trends in Insurance Premiums and Total Spending

• Why should we look at premiums and total
  spending?
• Increased spending for any health care sector
  (others things being equal) will over time lead
  to higher premiums.
• Health professional spending represents
  approximately 23-30 of total benefit costs.
• Nationally and in Maryland spending on
  professional services has slowed in 2004-2006
  after increases in 2001-2004.
• Some analysts argue that concentration in the
  insurance market leads to higher premiums than
  would otherwise be the case.

6
Sources of Information On Insurance Premiums

• MEPS-IC is a primary source of information on
  insurance premiums in the private sector.
• Annual firm-level survey by AHRQ
• Includes insured and self-insured products
• Information based on what is purchased, premium
  changes include benefit changes
• Does not include self-employed
• Tabulations are released by AHRQ slowly, access
  to firm-level data is limited and additional
  aggregations are difficult.
• Milliman Group Health Insurance Survey and
  KFF/HRET Survey are alternative sources with some
  strengths over MEPS-IC, i.e. more timely, but
  less complete.
• MIA data in conjunction with NAIC is best source
  of information on insurer surpluses and reserves.
  

7
Average Premium for a Private Sector Family HMO
Policy 2000-2005(across all market segments )
Source MEPS-IC, 1996-2005, accessed at
www.meps.ahrq.gov/mepsweb/data_stats/state_tables.
jsp
8
Average Premium for a Private Sector Family PPO
Policy 2000-2005(across all market segments)
Source MEPS-IC, 1996-2005, accessed at
www.meps.ahrq.gov/mepsweb/data_stats/state_tables.
jsp
9
Physician Supply

• Board of Physicians provides data on physician
  and practice characteristics as part of the
  license renewal process.
• AMA Masterfile and Center for Health System
  Change Physician Survey used for comparisons
  with US.
• AMA data shows higher supply than MHCCs active
  practice physician subset (14,200).
• Median age is 49, 64 white, 19 Asian, 12
  black, 68 male, 25 are in primary care, 25 are
  in solo practice, 38 in a single specialty
  group.
• Typical physician participates in 4 networks
  (payer supplied data), and provides 5 hours of
  charity care per month.

10
Significant Supply Variation Among Maryland
CountiesPhysicians per 100,000
11
Information on Non-physician Professionals is
Limited
Characteristics will come from licensing
boards. Information on productivity is sparse
overall and relative to physicians. Little
national comparative information. Maryland
requires that podiatrists receive an equivalent
payment as physicians for the same service.
12
What we know about provider shortages

• Health Resources Planning Administration (HRSA)
  designates health providers shortage areas
• Primary care in parts of Washington and Allegany
  counties
• Mental health in parts of Anne Arundel, Calvert,
  Charles, Garrett, Kent, Queen Annes, St. Marys,
  Talbot counties
• HPSA designation matters -- over 30 federal
  programs use HPSAs to define eligibility or set
  preference levels for payments.
• Historical limited availability of some
  specialists to Medicaid population, recent fee
  increases appear to have increased access.

13
Information on Utilization and Reimbursement
(from the Maryland Medical Care Data Base)

• MCDB
• Private insurers claims, encounter data
• Practitioner services (physicians and other
  professionals)
• Prescriptions covered on a drug benefit offered
  by the carrier
• Detailed data on individual services
• Non-HMO plans
• Claims data
• Captures most care (except carve-outs for mental
  health and
• Rx drugs)
• HMO plans
• Mixed fee-for-service claims, capitated
  encounters
• Incomplete data on capitated encounters no
  info, no primary care
• Greater uncertainty in estimated volume, spending

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Uses Related to Task Force Responsibilities

• Examine sources of spending growth
• Prices and quantities of services
• Determine spending growth drivers
• Examine private payers fee levels
• Compare private sector fees to Medicares rates
• Evaluate variations in spending and fee levels by
  geography, type of service, specialty

15
Summary of Analyses, 1999-2005

• Analyses from 1999 2005
• Stable practitioner rates from 1999-2001, 2
  increase per year from 2002-2004.
• Volume of services grew rapidly from 2001-2003,
  slowed in 2003-2004 and decelerated further in
  2004-2005.
• High growth areas followed national patterns --
  imaging, hospital outpatient department (OPD).
• Maryland fees averaged near Medicare level.
• Reimbursement per unit is near Medicare levels,
  but significant variation in fees relative to
  Medicare by type of service, place of service,
  payer market size, and by region of the state.
• Resilience of market, slow emergence of CDHP and
  decline of HMO-POS.

16
Recent Enhancements that will Benefit the Task
Forces Work

• Carriers identify individuals that are enrolled
  for a full year. More accurate per user
  estimates.
• Improved reporting of mental health services.
• Decline of capitation has lead to improved data
  quality.
• Renewed efforts to improve reporting of
  anesthesiology services.
• Improvements will better enable Maryland to
  benchmark spending levels to national results.
• Assigned risk scores to patients using a risk
  adjustment system.

17
Concluding Thoughts

• Enhancements to the MCDB make it possible to take
  a fresh look at many of the issues.
• Data systems are more complete, but are not
  perfect.
• Task Force members and Stakeholders must
  recognize that the imperfect data systems may
  cause reasonable people to reach different
  conclusions.
• Developing solutions may require new approaches
  and compromises, if the Task Force wants to
  resolve some of the persistent reimbursement
  issues of the last 7 years.

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Questions?
19
Ratio of Private Fees Relative to Medicare Fees
in Maryland
Source MedPAC March 2007 report referenced at
http//www.medpac.gov/publications/congressional_r
eports/Mar07_Ch02b.pdf and MHCC Practitioner
Utilization Reports 2001-2005.
20
National Comparisons(2001-2002 Experience)

• Three studies suggest that Maryland is in the
  bottom quartile of private sector in fee levels.
• 1. A MedPAC-sponsored study found that about
  25 of plans have fees that are below the
  Medicare level on average.1
• Results from a Milliman study of HMO plans places
  Maryland rates near the 25th percentile of all
  states, in terms of payment rates by HMO plans.
  Among 22 states with adequate numbers of survey
  responses to allow mean payment levels to be
  estimated, only four states had HMO rates below
  the Medicare level. (California, Arizona,
  Florida, and New Jersey).
• A GAO study found that Baltimore and Washington
  Metro areas ranked at and near the bottom of over
  319 market areas in adjusted prices for physician
  services under PPOs that serve federal employees
  (Florida, NY, CA also low).

See Exhibit 16 page 24, in Dyckman, Z, P Hess,
Survey of Health Plans Concerning Physician Fees
and Payment Methodology (Washington, DC Dyckman
and Associates, June 2003).
21
Annualized Growth in Use of Practitioner
Services per Patient 2002-2004In nominal dollars
MHCC internal analysis of the Medical Care Data
Base.