Medicare Laboratory Payment Policy Now and in the Future (2000) / Chapter Skim
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Appendix B: Medicare Clinical Laboratory Payments: The National Limitation Amount and Its Relationship to Payment Amounts
Appendix B: Medicare Clinical Laboratory Payments: The National Limitation Amount and Its Relationship to Payment Amounts
Pages 177-183
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From page 177... ...
were set at the NLA.~ This suggests that there is effectively a national fee schedule, where relative service payments are determined by the relationship between median charges in 1984 across the camers, coupled with gap-filled and crosswalked values for codes established since then.2 Analysis of 2000 payment rates reveals that the high prevalence of the NLA in determining payments suppresses the variation in payment amounts across carriers. More than 16 percent of updated base amounts are at least 25 percent less than the median base amount, while more than 21 percent exceed the iThe 2000 fee schedules were downloaded from the Health Care Financing Administration's (HCFA)
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From page 178... ...
The NLAis based on an unweighted median of regional fee schedule amounts. As a result, it is not the median value of actual payments for each service since service volumes vary across regions.
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From page 179... ...
179 to to to Cal Cal Ct C)
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From page 180... ...
which are not at the NLA in Region 1, account for relatively more spending than volume. In this example, total spending is about 99.4 percent of what it would be if all services were paid at the NLA.3 In the case of actual Medicare payments, the simple fact that 84 percent of carrier payment amounts are set at Medicare's NLA does not provide a very accurate estimate of how close current payments are to an NLA-based fee schedule.
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From page 181... ...
The distribution of fee-for-service Medicare 4The appropriateness of using beneficiary counts to summarize payment amounts across carriers was explored through analysis of a subset of services for which credible total volume data were available. For these services, an average payment amount can be calculated by dividing total spending by total service volumes.
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From page 182... ...
Total charge data are available for the 100 codes that accounted for the largest majority of Medicare outpatient lab spending in 1998.5 Combined, these codes accounted for more than 83 percent of spending, so an analysis of them should be fairly suggestive.6 For these top codes, the unweighted service-level NLA ratio across the 56 fee schedules is about 0.98 (compared to about 0.96 for all codes) , suggesting that among high-cost or high-volume services, the fee schedule amount is closer to the NLA than for other services.
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From page 183... ...
More accurate estimates could be calculated easily from data on total spending for all codes or, better still, service volumes for each code in each region. The present estimates, however, provide fairly strong evidence that Medicare's present payment policy is, in effect, an NLA-based fee schedule.
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