A DATA BOOK 

Health Care Spending 

and the 

Medicare Program 

J UNE 2013

A DATA BOOK 

Health Care Spending 

and the 

Medicare Program 

J UNE 2013

iii 

Introduction 

The MedPAC Data Book provides information on national health care and Medicare spending as 

well as Medicare beneficiary demographics, dual-eligible beneficiaries, quality of care in the 

Medicare program, and Medicare beneficiary and other payer liability. It also examines provider 

settings—such as hospitals and post-acute care—and presents data on Medicare spending, 

beneficiaries’ access to care in the setting (measured by the number of beneficiaries using the 

service, number of providers, volume of services, length of stay, or through direct surveys), and 

the sector’s Medicare profit margins, if applicable. In addition, it covers the Medicare Advantage 

program and prescription drug coverage for Medicare beneficiaries, including Part D. 

MedPAC began producing its annual Data Book at the suggestion of congressional staff. Some 

of the information it contains is derived from MedPAC’s March and June reports to the 

Congress; other information presented is unique to the Data Book. The information is presented 

through tables and figures with brief discussions. Website links to MedPAC publications and 

other websites are included on a “Web links” page at the end of each section. 

We produce a limited number of printed copies of this report. It is, however, available through 

the MedPAC website: www.medpac.gov. 

Notes on data 

Several charts in this Data Book use data from the Medicare Current Beneficiary Survey 

(MCBS). We use the MCBS to compare beneficiary groups with different characteristics. The 

MCBS is a survey, so expenditure amounts that we show may not match actual Medicare 

expenditure amounts from CMS’s program offices or the Office of the Actuary. 

Changes in aggregate spending among the fee-for-service sectors presented in this Data Book 

reflect changes in Medicare enrollment between the traditional fee-for-service program and 

Medicare Advantage. Increased enrollment in Medicare Advantage may be a significant factor in 

instances in which Medicare spending in a given sector has leveled off or even declined. In these 

instances, fee-for-service spending per capita may present a more complete picture of spending 

changes. 

v 

Table of contents 

Introduction ..............................................................................................................................iii

Sections 

1 National health care and Medicare spending .............................................................. 1 

1-1 Aggregate Medicare spending among FFS beneficiaries, by sector, 2002–2012 ..................................... 3

1-2 Per capita Medicare spending among FFS beneficiaries, by sector, 2002–2012 ......................................... 4

1-3 Medicare made up over one-fifth of spending on personal health care in 2011 .......................................... 5

1-4 Medicare’s share of spending on personal health care varies by type of service, 2011 ............................... 6

1-5 Health care spending has grown more rapidly than GDP, with public financing making up 

nearly half of all funding .................................................................................................................................. 7

1-6 Trustees project Medicare spending to increase as a share of GDP .............................................................. 8

1-7 Changes in spending per enrollee, Medicare and private health insurance .................................................. 9

1-8 Trustees project Medicare spending to grow at an annual average rate of 7.1 percent over 

the next 10 years; CBO projects an annual rate of 6.5 percent ................................................................... 10

1-9 Medicare spending is concentrated in certain services and has shifted over time ..................................... 11

1-10 FFS program spending is highly concentrated in a small group of beneficiaries, 2009 ........................... 12

1-11 Medicare HI trust fund is projected to be insolvent in 2026 under trustees’ 

intermediate assumptions .............................................................................................................................. 13

1-12 Medicare faces serious challenges with long-term financing ..................................................................... 14

1-13 Average monthly SMI premiums and cost sharing are projected to grow faster than the 

average monthly Social Security benefit ...................................................................................................... 15

1-14 Medicare HI and SMI benefits and cost sharing per FFS beneficiary in 2011 ......................................... 16

Web links ................................................................................................................................................. 17

2 Medicare beneficiary demographics........................................................................... 19 

2-1 Aged beneficiaries account for the greatest share of the Medicare population and 

program spending, 2009 ................................................................................................................................ 21

2-2 Medicare enrollment and spending by age group, 2009 ............................................................................. 22

2-3 Beneficiaries who report being in poor health account for a disproportionate share of 

Medicare spending, 2009 ....................................................................................................................... 23

2-4 Enrollment in the Medicare program is projected to grow rapidly in the next 20 years .......................... 24

2-5 Characteristics of the Medicare population, 2009 ....................................................................................... 25

 Web links ................................................................................................................................................ 26

3 Dual-eligible beneficiaries............................................................................................ 27 

3-1 Dual-eligible beneficiaries account for a disproportionate share of Medicare spending, 2009 ............... 29

3-2 Dual-eligible beneficiaries are more likely than non-dual-eligible beneficiaries to be under 

age 65 and disabled, 2009 ............................................................................................................................. 30
vi 

3-3 Dual-eligible beneficiaries are more likely than non-dual-eligible beneficiaries to report 

poorer health status, 2009 .............................................................................................................................. 31

3-4 Demographic differences between dual-eligible beneficiaries and non-dual-eligible 

beneficiaries, 2009 ......................................................................................................................................... 32

3-5 Differences in Medicare spending and service use rate between dual-eligible beneficiaries 

and non-dual-eligible beneficiaries, 2009 .................................................................................................... 33

3-6 Both Medicare and total spending are concentrated among dual-eligible beneficiaries, 2009 ................ 34

 

 Web links ...................................................................................................................................... 35

4 Quality of care in the Medicare program................................................................... 37 

4-1 In-hospital and 30-day postdischarge mortality rates improved from 2008 to 2011 ................................ 39

4-2 Most hospital inpatient patient safety indicators improved or were stable from 2008 to 2011 ................ 40

4-3 Risk-adjusted SNF quality measures show little improvement over 10 years .......................................... 41

4-4 Risk-adjusted home health quality measures held steady or improved from 2004 through 2012 .......... 42

4-5 Dialysis quality of care: Some measures show progress, others need improvement, 2004–2011 ........... 43

4-6 Medicare Advantage quality measures show improvement between 2011 and 2012 for local PPOs .... 44

 Web links ................................................................................................................................................. 46

5 Medicare beneficiary and other payer financial liability ......................................... 49 

5-1 Sources of supplemental coverage among noninstitutionalized Medicare beneficiaries, 2009 ............... 51

5-2 Sources of supplemental coverage among noninstitutionalized Medicare beneficiaries, by 

beneficiaries’ characteristics, 2009 ............................................................................................................... 52

5-3 Total spending on health care services for noninstitutionalized FFS Medicare beneficiaries, 

by source of payment, 2009 .......................................................................................................................... 53

5-4 Per capita total spending on health care services among noninstitutionalized FFS 

beneficiaries, by source of payment, 2009 ................................................................................................... 54

5-5 Variation in and composition of total spending among noninstitutionalized FFS beneficiaries, 

by type of supplemental coverage, 2009 ...................................................................................................... 55

5-6 Out-of-pocket spending for premiums and health services per beneficiary, 

by insurance and health status, 2009 ............................................................................................................ 56

Web links ...................................................................................................................................... 57

6 Acute inpatient services ............................................................................................... 59 

Short–term hospitals 

6-1 Annual changes in number of acute care hospitals participating in the 

Medicare program, 2000–2011 .................................................................................................................... 61

6-2 Percent change in hospital employment, by occupation, 2008–2011 ........................................................ 62

6-3 Growth in Medicare’s FFS payments for hospital inpatient and outpatient services, 1999–2011 ....... 63

6-4 Proportion of Medicare acute care hospital inpatient discharges by hospital group, 2011 ....................... 64

6-5 Major diagnostic categories with highest volume, fiscal year 2011 .......................................................... 65

6-6 Cumulative change in total all-payer admissions and total outpatient visits, 1999–2011 ........................ 66
vii 

6-7 Cumulative change in Medicare outpatient services and inpatient discharges per 

FFS beneficiary, 2005–2011 ......................................................................................................................... 67

6-8 Cumulative change in Medicare inpatient medical and surgical discharges per FFS 

beneficiary, 2005–2011 ................................................................................................................................. 68

6-9 Trends in Medicare inpatient and non-Medicare inpatient length of stay, 2005–2011 ............................ 69

6-10 Share of inpatient admissions preceded by emergency department visit by location, 2005–2011 .......... 70

6-11 Share of Medicare Part A beneficiaries with at least one hospitalization, 2005–2011 ............................. 71

6-12 Number of Medicare outpatient observation visits and inpatient claims preceded by observation 

care per 1,000 beneficiaries increased from 2006 to 2011.......................................................................... 72

6-13 Hospital occupancy rates, 2005–2011 .......................................................................................................... 73

6-14 Medicare inpatient payments, by source and hospital group, 2011 ........................................................... 74

6-15 Medicare acute inpatient PPS margin, 2002–2011 ..................................................................................... 75

6-16 Medicare acute inpatient PPS margin, by urban and rural location, 2002–2011 ...................................... 76

6-17 Overall Medicare margin, 2002–2011 ......................................................................................................... 77

6-18 Overall Medicare margin, by urban and rural location, 2002–2011 .......................................................... 78

6-19 Medicare hospital outpatient, inpatient, and overall Medicare margins, 2002–2011 ............................... 79

6-20 Hospital total all-payer margin, 2002–2011 ................................................................................................ 80

6-21 Hospital total all-payer margin, by urban and rural location, 2002–2011 ................................................. 81

6-22 Hospital total all-payer margin, by teaching status, 2002–2011 ................................................................. 82

6-23 Medicare margins by teaching and disproportionate share status, 2011 .................................................... 83

6-24 Financial pressure leads to lower costs ........................................................................................................ 84 

6-25 Change in Medicare hospital inpatient costs per discharge and private payer payment-to-cost 

ratio, 1987−2011 ............................................................................................................................................ 85

6-26 Markup of hospital charges above costs for Medicare services, 2002−2011 ............................................ 86 

6-27 Number of critical access hospitals, 1999–2013 ......................................................................................... 87

Inpatient psychiatric facilities

6-28 Medicare payments to inpatient psychiatric facilities, 2002–2012 ............................................................ 88

6-29 Number of inpatient psychiatric facility cases increased in 2010 .............................................................. 89

6-30 Inpatient psychiatric facilities, 2004–2010 .................................................................................................. 90

6-31 One diagnosis accounted for almost three-quarters of IPF cases in 2010 ................................................. 91

6-32 Characteristics of IPF users, 2010 ................................................................................................................ 92

 Web links ................................................................................................................................................. 93

7 Ambulatory care .......................................................................................................... 95 

Physicians

7-1 Medicare spending per FFS beneficiary on physician fee-schedule services, 2002–2012 ...................... 97

7-2 Volume growth has raised physician spending more than input prices and 

payment updates, 2000–2012 ....................................................................................................................... 98

7-3 Most beneficiaries report that they can always or usually get timely care, 2012 ...................................... 99

7-4 Medicare beneficiaries report better ability to get timely appointments with physicians, 

compared with privately insured individuals, 2009–2012 ........................................................................100

7-5 Medicare and privately insured patients who are looking for a new physician report more difficulty 

finding one in primary care, 2009–2012 .................................................................................................... 101

7-6 Access to physician care is better for Medicare beneficiaries compared with privately insured 

individuals, but minorities in both groups report problems slightly more frequently, 2012 .................. 102
viii 

7-7 Differences in access to new physicians are most apparent among minority Medicare 

and privately insured patients who are looking for a new specialist, 2012 .............................................. 103

7-8 Growth in volume of physician fee-schedule services per beneficiary, 2000–2011 ............................... 104

7-9 Changes in physicians’ professional liability insurance premiums, 2005–2012 ..................................... 105

Hospital outpatient services 

7-10 Spending on hospital outpatient services covered under the outpatient PPS, 2002–2012 ..................... 106

7-11 Most hospitals provide outpatient services ................................................................................................ 107

7-12 Payments and volume of services under the Medicare hospital outpatient PPS, by type 

of service, 2011 ............................................................................................................................................ 108

7-13 Hospital outpatient services with the highest Medicare expenditures, 2011 ........................................... 109

7-14 Medicare coinsurance rates, by type of hospital outpatient service, 2011 ............................................... 110

7-15 Effects of hold-harmless and SCH transfer payments on hospitals’ 

outpatient revenue, 2009–2011 ................................................................................................................... 111

7-16 Number of observation hours has increased, 2006–2011 ......................................................................... 112

Ambulatory surgical centers

7-17 Number of Medicare-certified ASCs increased by 25 percent, 2005–2012 ............................................ 113

Imaging services

7-18 Medicare spending for imaging services under the fee schedule for physicians and other health 

professionals, by type of service, 2011 ...................................................................................................... 114

7-19 Rapid growth in the number of CT and MRI scans per 1,000 beneficiaries, 2000–2010 ............ 115

 Web links .............................................................................................................................................. 116

8 Post-acute care ........................................................................................................... 119 

8-1 Number of post-acute care providers increased or remained stable in 2012 ........................................... 121

8-2 Home health care and skilled nursing facilities have fueled growth in Medicare’s 

post-acute care expenditures ....................................................................................................................... 122

Skilled nursing facilities

8-3 A growing share of fee-for-service Medicare stays and payments go to freestanding 

skilled nursing facilities and for-profit facilities ........................................................................................ 123

8-4 SNF volume remained essentially unchanged between 2010 and 2011 .................................................. 124

8-5 Freestanding SNF Medicare margins have increased steadily since 2005 .............................................. 125

8-6 Comparison of beneficiaries who do and do not use skilled nursing facilities, 2010 ............................. 126

8-7 Comparison of users of skilled nursing facilities: Dual-eligible users and other users, 2011 ............... 127

Home health services

8-8 Spending on home health care, 1997–2012 ............................................................................................... 128

8-9 Provision of home health care changed after the prospective payment system started .......................... 129

8-10 Trends in provision of home health care .................................................................................................... 130

8-11 Medicare margins for freestanding home health agencies ........................................................................ 131

Inpatient rehabilitation facilities

8-12 Most common types of inpatient rehabilitation facility cases, 2012 ........................................................ 132

8-13 Volume of IRF FFS patients increased in 2011 ........................................................................................ 133
ix 

8-14 Overall IRFs’ payments per case have risen faster than costs since implementation of the 

PPS in 2002 .................................................................................................................................................. 134

8-15 Inpatient rehabilitation facilities’ Medicare margin by type, 2002–2011 ............................................... 135 

Long-term care hospitals

8-16 The top 25 MS–LTC–DRGs made up three-fifths of LTCH discharges in 2011 .................................. 136

8-17 LTCH spending per FFS beneficiary continues to rise ............................................................................. 137

8-18 LTCHs’ per case payments continue to increase more than costs ........................................................... 138

8-19 LTCHs’ aggregate Medicare margin rose in 2011 .................................................................................... 139

8-20 LTCHs in the top quartile of Medicare margins in 2011 had much lower costs .................................... 140

 Web links .............................................................................................................................................. 141

9 Medicare Advantage.................................................................................................. 143 

9-1 MA plans available to virtually all Medicare beneficiaries ............................................................ 145

9-2 Access to zero-premium plans with MA drug coverage, 2007–2013 ............................................. 146

9-3 Enrollment in MA plans, 1994–2013 .............................................................................................. 147

9-4 Changes in enrollment vary among major plan types ..................................................................... 148

9-5 MA and cost plan enrollment by state and type of plan, 2013 ........................................................ 149

9-6 MA plan benchmarks, bids, and Medicare program payments relative to FFS spending, 2013 ....... 150

9-7 Enrollment in employer group MA plans, 2006–2013 ................................................................... 151

9-8 Number of special needs plan enrollees, 2007–2013 ...................................................................... 152

9-9 Number of SNPs and SNP enrollment rose from 2012 to 2013 ..................................................... 153 

9-10 Twenty most common condition categories among MA beneficiaries, defined in 

the CMS–HCC model, 2011 ............................................................................................................ 154

9-11 Medicare private plan enrollment patterns by age and Medicare–Medicaid dual-eligible 

status, January 2011 ......................................................................................................................... 155

9-12 Distribution of MA plans and enrollment by CMS overall star ratings, February 2013 ................ 156

 Web links .............................................................................................................................................. 158

10 Prescription drugs ...................................................................................................... 159 

10-1 Medicare spending for Part B drugs administered in physicians’ offices or furnished by suppliers ..... 161

10-2 Top 10 Part B drugs administered in physicians’ offices or furnished by suppliers, 

by share of expenditures, 2011 ................................................................................................................... 162

10-3 In 2011, almost 90 percent of Medicare beneficiaries were enrolled in Part D plans or had 

other sources of creditable drug coverage .................................................................................................. 163

10-4 Parameters of the defined standard benefit increase over time ................................................................. 165

10-5 Characteristics of Medicare PDPs .............................................................................................................. 166

10-6 Characteristics of MA–PDs ........................................................................................................................ 167

10-7 Average Part D premiums ........................................................................................................................... 168

10-8 Number of PDPs qualifying as premium-free to LIS enrollees remained stable in 2013 ...................... 169

10-9 In 2013, most Part D enrollees are in plans that charge higher copayments for nonpreferred 

brand-name drugs ........................................................................................................................................ 170

10-10 In 2013, use of utilization management tools continues to increase for both PDPs and MA–PDs ....... 171

10-11 Characteristics of Part D enrollees, 2011 ................................................................................................... 172
x 

10-12 Part D enrollment trends, 2006–2011 ........................................................................................................ 173

10-13 Part D enrollment by region, 2011 ............................................................................................................. 174

10-14 The majority of Part D spending is incurred by fewer than half of all Part D enrollees, 2011 .............. 176

10-15 Characteristics of Part D enrollees, by spending levels, 2011 .................................................................. 177

10-16 Part D spending and utilization per enrollee, 2011 .................................................................................... 178

10-17 Part D spending varies across regions even after controlling for prices and health status, 2011 ........... 179

10-18 Top 15 therapeutic classes of drugs under Part D, by spending and volume, 2011 ............................... 180

10-19 Generic dispensing rate for the top 15 therapeutic classes, by plan type, 2011 ....................................... 181

10-20 Generic dispensing rate for the top 15 therapeutic classes, by LIS status, 2011 ..................................... 182

 Web links .............................................................................................................................................. 183

11 Other services ............................................................................................................. 185

Dialysis

11-1 Number of dialysis facilities is growing and share of for-profit and freestanding dialysis 

providers is increasing .......................................................................................................................... 187

11-2 Medicare spending for outpatient dialysis services furnished by freestanding and hospital-based 

dialysis facilities, 2006 and 2011 ......................................................................................................... 188

11-3 The ESRD population is growing, and most ESRD patients undergo dialysis .................................. 189

11-4 Asian Americans and Hispanics are among the fastest growing segments of the 

ESRD population .................................................................................................................................. 190

11-5 Dialysis facilities’ capacity increased between 2007 and 2012 .......................................................... 191

11-6 Characteristics of Medicare fee-for-service dialysis patients, 2011.................................................... 192

11-7 Aggregate margins vary by type of freestanding dialysis facility, 2010............................................. 193

Hospice

11-8 Medicare hospice use and spending grew substantially from 2000 to 2011 ...................................... 194

11-9 Hospice use increased across beneficiary groups from 2000 to 2011 ................................................ 195

11-10 Number of Medicare-participating hospices has increased due to growth in for-profit hospices ...... 196

11-11 Hospice cases and length of stay, by diagnosis, 2011 ......................................................................... 197

11-12 Growth in length of stay among hospice patients with the longest stays slowed in 2011 ................. 198

11-13 Hospice length of stay among decedents, by beneficiary and hospice characteristics, 2011 ............. 199

11-14 More than half of Medicare hospice spending in 2011 was for patients with stays 

exceeding 180 days .............................................................................................................................. 200

11-15 Hospice aggregate Medicare margins, 2004–2010 ............................................................................. 201

11-16 Medicare margins are higher among hospices with more long stays, 2010 ....................................... 202

11-17 Hospices that exceeded Medicare’s annual payment cap, selected years ........................................... 203

11-18 Length-of-stay and live discharge rates for above- and below-cap hospices, 2010 ........................... 204

11-19 Margins are higher among hospices with a greater share of their patients in 

 nursing facilities, 2010 ........................................................................................................................ 205

Clinical laboratory

11-20 Medicare spending for clinical laboratory services, 2003–2012 ........................................................ 206

 Web links .............................................................................................................................................. 207
 

S E C T I O N 

National health care and 

Medicare spending 

Chart 

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sk

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than 

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Character

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e months they q

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tal coverage

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gram, June 20

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2009. They coul

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to age

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eligible

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report 

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ciaries 

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0 

status 

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ir

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ost time in 2009

edicare Advanta

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excludes benefic

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edPAC analysis 

ficiaries most li

ave income ove

gap is most com

e or ESRD, are

caid coverage i

e due to disab

of supplementa

age 65, have 

poor health. 

and other pay

ources o

oninstitu

eneficiar

Number of

beneficiarie

(thousands

40,197 

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renal disease). B

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age, cost, and he

her categories. M

equal measure w

ural” indicates be

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ayer. Number of 

umbers may not 

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ikely to have e

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income below

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utionaliz

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31%

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32

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31

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ve had coverage 

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e assigned to the

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t A and Part B thr

fers among boldf

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ficiary Survey, C

sored supplem

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tics, 200

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15

32

e supplemental co

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her public sector

reported on the 

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roughout their en

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ost and Use file.

mental coverag

port better tha

der, have incom

cellent or very g

der age 65, ha

rt poor health. 

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Medicare 

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overage categor

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good health. 

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ry that applied fo

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ng FFS bene

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ealth care c

ficiary. The 

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ate sources o

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beneficiary. 

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tal spend

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ce). Private supp

ts include Medica

aring and noncov

tions such as nu

of Medicare Cur

eficiaries livi

ficiaries’ dire

and all privat

51 in 2009. M

osts for FFS

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e Chart 2-1 r

of suppleme

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upplements

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ding on 

tionalize

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vered services bu

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rrent Beneficiary 

ng in the co

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te-sector sou

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beneficiaries

represents a

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sts, an avera

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supplement

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health c

d FFS M

t, 2009 

 employer-spons

of Veterans Affa

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mmunity, th

g as well as 

urces on all 

the largest s

es living in th

ding in this c

s in Medicar

ll Medicare b

ge—primarily

ciaries’ cost

alth care cos

e—primarily 

age of $769

ts

al spending 

ending and the

are serv

edicare 

sored plans and 

airs, and other pu

ntal premiums. A

nd Use file, 2009

e total cost o

expenditure

health care 

ource of pay

he communi

hart differs f

re Advantag

beneficiaries

y employer-s

ts, an averag

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per benefici

M

= $13,751

e Medicare prog

vices for 

benefici

individually purc

ublic coverage. D

Analysis includes

9. 

of health car

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goods and s

yment; it pay

ity, an avera

from the leve

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s. 

sponsored r

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ocket, an ave

—paid 6 perce

iary. 

Medicare

64%

gram, June 20

aries, by

chased coverage

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 only FFS benefi

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are, other pu

services) 

ys 64 percen

age of $8,84

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e living in 

retiree cover

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ent of 

13 53

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. 

s on 

iciaries 

ublicnt of 

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rage 

ciary. 

877 
54 Medica

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nu

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the c

spen

with t

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total s

as tot

bene

the h

spen

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10,0

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40,0

50,0

60,0

70,0

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are beneficiary 

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am

so

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edPAC analysis 

 spending o

ommunity. P

ding averag

the lowest to

ng FFS bene

spending inc

tal spending

ficiaries but 

ighest total s

ding for all b

ficiaries with

39

0

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000

000

000

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and other pay

er capita

mong no

ource of

ce). Analysis exc

ut-of-pocket spe

of Medicare Cur

n health car

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ed $65,642 

otal spending

eficiaries livi

creases, and

g increases. 

pays 75 per

spending. B

beneficiaries

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upplemental p

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a total sp

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nding includes M

rrent Beneficiary 

re services v

pending for t

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ng in the co

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rcent of total

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1,951

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beneficiaries

payers

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pending 

utionalize

nt, 2009

o are not in FFS 

Medicare cost sha

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varies drama

the 10 perce

r capita spen

$391. 

mmunity, M

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l spending fo

’ out-of-pock

percent of to

ding. 

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s ranked by t

on healt

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Medicare and th

aring and noncov

nd Use file, 2009

atically amon

ent of benefic

nding for the

edicare pay

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pays 64 per

or the 10 pe

ket spending

otal spending

9,853

50-75

total spendin

th care s

beneficia

hose living in inst

vered services. 

9. 

ng FFS bene

ciaries with t

e 10 percent

s a larger pe

ing is a sma

rcent of tota

rcent of ben

g covers 14 p

g for the 10 p

21,781

75-90

ng (percentil

services 

aries, by 

titutions such as 

eficiaries livi

the highest t

t of beneficia

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aller percenta

l spending fo

neficiaries wi

percent of to

percent of 

65,64

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ng in 

total 

aries 

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ith 

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Chart 

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rograms not inclu

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ut-of-pocket spen

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evel of total 

nditures by M

h care good

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lemental cov

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care is the la

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sponsore

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have had coverag

ded in the other c

ge. “Public supple

beneficiaries who

were not in both P

nding includes Me

of Medicare Curr

spending (d

Medicare, ot

s and servic

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h no supplem

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ercent higher

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in and co

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edicare cost shar

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defined as be

ther public-s

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verage they h

mental cover

eficiaries wi

r than those 

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gest source 

mployer, Med

e combined—

ap, suppleme

icare-only co

payment. 

197

543

476

198

digap Me

e

Private suppl

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ompositi

tionalize

ntal cove

the supplementa

ories during 2009

ate supplemental

s Medicaid, Depa

Medicare or live i

B throughout their

ring and noncove

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eneficiaries’ 

sector source

FFS benefic

have. Total s

rage than fo

th Medicaid 

with no sup

nt for benefi

of payment 

dicaid, and o

—is the seco

ental covera

overage, be

10,482

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654

2,115

edigap and

employer

lemental P

ending and the

ion of to

d FFS be

erage, 20

al coverage categ

9. “Other public s

l” includes emplo

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in institutions suc

r enrollment in 20

ered services but 

 Use file, 2009. 

 out-of-pock

es, and all p

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spending is 

r those bene

coverage h

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differs. Amo

other public c

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ge and out o

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16,762

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1,768

1,390

Medicaid

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tal spen

eneficiar

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gory that applied f

sector” includes fe

yer-sponsored pl

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ch as nursing hom

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not supplementa

ket spending

private-secto

in the comm

much lower

eficiaries wh

ave the high

coverage in 2

ach supplem

ong those wi

coverage, su

source of pa

of pocket are

out-of-pocke

6,763

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2,251

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coverage

mental Out 

gram, June 20

ding 

ries, by 

for the most time 

ederal and state 

lans and individu

ther public covera

mes. It excludes 

care as a second 

al premiums. 

g as well as 

or sources on

munity varies

r for those 

ho have 

hest level of 

2009. 

mental insura

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100

120

140

160

180

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these three 

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25

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reased subs

to 2007, in p

years due t

program. Pay

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al hospital-b

r almost 16 

roximately 22

$1,242 in 20

135 136

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2006 2007

year

e Medicare prog

nts for h

 1999–20

patient prospectiv

nd units; outpatie

utlays and benef

dvantage enrollee

nd outpatient

ased about 

of 1997 redu

stantially betw

part because

to a large nu

yment growt

s. 

based spend

percent of a

2 percent of

011, up from

140 14

32 35

7 2008 200

gram, June 20

ospital 

011 

ve payment syste

ent services cov

ficiary cost sharin

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umber of 

th began to 

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f total hospita

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em 

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ng. The 

was 

while 

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and 

FFS 

ast 

al 

tely 

146

40

2011
64 Acute i

Chart 

Hospital g

All PPS h

and CAHs

CAHs 

PPS hosp

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 Other u

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at

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hospit

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inpatient servic

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PPS hospitals)

urban 

urban 

PS hospitals) 

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ommunity 

are dependen

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rural >50 beds

us (PPS hosp

y

ary 

ment

g status (PPS 

aching 

aching 

hing 

PS (prospective 

ave populations o

t least 0.25. Othe

eports in the CMS

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edPAC analysis 

11, 3,334 hos

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2010 to 2011

oximately 21 p

al centers (RR

tals (MDHs)) 

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t 90 percent o

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3

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hospitals) 

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of PPS impact f

spitals provide

ded about 400

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percent of PP

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intended to h

scharges (no

of rural hospit

tals provide 8

on of Med

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ber Sh

641 

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334 

414 

321 

093 

920 

123 

384 

194 

92 

127 

941 

825 

568 

267 

747 

320 

m), CAH (critical a

million. Major teac

itals have a ratio

Chart 6-27 for m

PPS hospitals. N

iles and Medicar

ed 10.3 million

0,000 dischar

e to a shift in 

PS hospitals a

ommunity hos

help rural facil

ot shown in ch

tals were CAH

87 percent of 

dicare ac

spital gr

hare of total

100.0%

28.2

71.8

72.4

39.6

32.8

27.6

3.7

11.5

5.8

2.8

3.8

58.2

24.7

17.0

8.0

22.4

69.6

access hospital).

ching hospitals a

 below 0.25. Dat

more information 

Numbers may not

re cost report dat

n discharges 

rges. The num

services from

are covered b

spitals (SCHs

lities that are 

hart). 

Hs, SCHs, MD

all rural disch

cute care

roup, 201

Nu

(thou

. Maryland hospi

are defined by a 

ta are limited to p

about CAHs. Ho

t sum to totals du

ta from CMS. 

under Medica

mber of PPS d

m the inpatien

by three speci

), and small r

not CAHs; th

DHs, or RRCs

harges (not sh

e hospita

11 

Medicare d

umber 

usands) 

10,685 

386 

10,300 

8,916 

4,908 

4,008 

1,384 

378 

574 

199 

47 

186 

7,331 

1,645 

1,323 

1,593 

3,716 

4,991 

tals are excluded

ratio of interns a

providers with co

ospitals in urban,

ue to rounding. 

are’s acute in

discharges co

nt to the outpa

al payment p

rural Medicare

hese facilities 

s in 2011. Co

hown in chart

al inpatie

discharges 

Share of t

100.

3.

96.

86.

47.

38.

 13.

3.

5.

1.

0.

1.

71.

16.

12.

15.

36.

48.

d. Large urban a

nd residents to b

omplete 2011 cos

, rural, tax status

npatient PPS 

ontinued to de

atient setting.

provisions (rur

e-dependent 

account for a

ollectively, the

t). 

ent 

total 

.0% 

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areas 

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and 

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ese 
Chart 

MDC 

number 

 5 

 4 

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 6 

 

 1 

 11 

 18 

 10 

 

 

 

 7 

 

 

 9 

 

 

Note: M

Source: M

• In fisc

disch

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6-5. M

fis

MDC name

Circulatory

Respirator

Musculosk

and conne

Digestive 

Nervous s

Kidney an

Infectious 

Endocrine

metabolic 

disorders 

Hepatobili

and pancr

Skin, subc

tissue, and

Total 

DC (major diagn

edPAC analysis 

cal year 201

harges at hos

ulatory syste

piratory syste

culoskeletal 

A

Major diag

scal yea

e

y system 

ry system 

keletal system

ective tissue 

system 

system 

d urinary trac

and parasitic

e, nutritional, a

diseases and

ary system 

reas 

cutaneous 

d breast

nostic category). 

of MedPAR data

1, 10 major 

spitals paid 

m cases acc

em cases ac

system case

A Data Book: H

gnostic c

ar 2011 

m

ct

c diseases

and 

d

Numbers may no

a from CMS. 

diagnostic c

under the ac

counted for a

ccounted for 

es accounted

Health care spe

categori

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disc

ot sum to totals d

categories a

cute inpatien

about one-q

19 percent 

d for 36 perc

ending and the

es with h

are of all

charges

22%

15

12

11

8

7

6

4

3

3

91

due to rounding.

accounted fo

nt prospectiv

quarter of su

of medical d

cent of surgi

e Medicare prog

highest v

Share of 

medical 

discharges 

21% 

19 

4 

11 

9 

9 

7 

5 

2 

3 

90 

or 91 percent

ve payment 

rgical cases

discharges. 

ical discharg

gram, June 20

volume, 

Share

surg

discha

25

3

36

10

5

4

2

2

4

2

93

t of all 

system. 

s. 

ges. 

13 65

e of 

ical 

arges 

5% 

3 

6

0

5 

4 

2

2 

4 

2 

3
66 Acute i

Chart 

Note: C

ou

Source: Am

• Hosp

servic

• Outpa

millio

• Total

declin

2010

• In 20

35 m

0

5

10

15

20

25

30

35

Percent

inpatient servic

6-6. C

to

umulative chang

utpatient visits at

merican Hospita

pital outpatie

ce use. Tota

atient visits 

on visits. 

 inpatient ad

ned since 20

 to 2011, or 

11, commun

illion inpatie

0.0

2.3

5.3

1999 2000

Tota

Tota

ces

Cumulativ

otal outp

e is the total per

t about 5,000 com

l Association, AH

nt service us

al hospital ou

increased by

dmissions gr

008. Inpatien

over 300,00

nity hospitals

nt admission

4.5

6.5

8.7

12.

0 2001 200

al admissions

al outpatient v

ve chang

patient vi

rcent increase fro

mmunity hospital

HA Hospital Stati

se grew muc

utpatient visi

y nearly 1 pe

rew by over 

nt admission

00 admission

s provided 6

ns. 

5 7.5 8

.3

13.7

1

02 2003 20

visits

ge in tota

sits, 199

om 1999 through

ls. 

stics. 

ch more rap

its increased

ercentage p

10 percent b

ns decreased

ns. 

656 million ou

8.4 8.9

5.4

18.0

004 2005

Fiscal yea

al all-pay

99–2011

h 2011. Data are 

pidly from 19

d about 32 p

oint from 20

between 199

d by nearly 1

utpatient vis

9.3 9.2

21.0 21.8

2006 2007

ar

yer admi

admissions (all 

999 to 2011 t

percent from

010 to 2011, 

99 and 2008

1 percentag

sits and sligh

10.5 9.8

26.0

29.

2008 200

ssions a

payers) to and 

than inpatien

 1999 to 201

or nearly 5 

8 but have 

e point from

htly fewer tha

8

8.6 7

6

31.5 32

09 2010 20

and 

nt 

11. 

m

an 

7.7

2.4

011
Chart 

Note: FF

ho

Source: M

• From

declin

flat, b

• From

perce

• Toge

settin

-10

-5

0

5

10

15

20

25

30

35

Percent

6-7. C

an

20

FS (fee-for-servic

ospitals. 

edPAC analysis 

m 2005 to 20

ned by 8.1 p

but, beginnin

m 2005 to 20

ent. 

ether these tw

ng. 

0.0

2005

Ou

FF

Inp

FF

A

Cumulativ

nd inpat

005–201

ce). Data are for 

of MedPAR and

11, the num

percent. From

ng in 2007, t

11, the num

wo trends su

4.2

0.0

2006

utpatient serv

FS beneficiary

patient discha

FS beneficiary

A Data Book: H

ve chang

ient disc

1 

short-term gene

d hospital outpati

ber of Medic

m 2005 to 20

he volume o

ber of outpa

uggest a shif

10.2

-1.3

2007

ices per

y

arges per

y

Health care spe

ge in Med

charges 

eral and surgical 

ent claims data f

care inpatien

006, inpatien

of discharges

atient service

ft in services

13.7

-2.3

2008

Fiscal year

ending and the

dicare o

per FFS 

hospitals, includ

from CMS. 

nt discharge

nt volume pe

s began to d

es per FFS b

s from the in

18.3

-5.2

2009

e Medicare prog

utpatien

benefici

ding critical acces

es per FFS b

er beneficiar

decline. 

beneficiary in

npatient to th

22.9

-6.8

2010

gram, June 20

t service

iary, 

ss and children’s

beneficiary 

ry was relativ

ncreased 28

he outpatient

28.3

-8.1

2011

13 67

es 

s

vely 

8

t

3
68 Acute i

Chart 

Note: FF

ho

Source: M

• In rec

rapid

declin

perce

• From

perce

disch

year.

-18

-16

-14

-12

-10

-8

-6

-4

-2

0

Percent

inpatient servic

6-8. Cu

an

20

FS (fee-for-servic

ospitals. 

edPAC analysis 

cent years, i

ly than med

ned 3.8 perc

ent per bene

m 2005 to 20

ent, or an av

harges per b

 

2005

M

ces

umulativ

nd surgic

011 

ce). Data are for 

of MedPAR data

npatient sur

ical discharg

cent, compa

eficiary. 

11, inpatient

verage of 3 p

eneficiary de

2006

Medical inpatie

ve chang

cal disch

short-term gene

a from CMS. 

rgical discha

ges. From 20

red with a de

t surgical dis

percent per y

eclined appr

2007

ent discharge

e in Med

harges pe

eral and surgical 

rges shifted

010 to 2011

ecline in me

scharges pe

year. Over th

roximately 7 

2008

Fiscal yea

es

dicare in

er FFS b

hospitals, includ

 away from 

, surgical dis

edical discha

r beneficiary

he same tim

 percent, or 

2009

ar

Surgical inpa

patient m

beneficia

ding critical acces

the inpatien

scharges pe

arges of less

y declined ap

me period inp

an average 

2010

atient discharg

medical 

ary, 2005

ss and children’s

t setting mo

er beneficiary

s than 0.5 

pproximately

patient medic

of 1 percen

-6.5

-16.6

2011

ges

– 

s

re 

y

y 17 

cal 

nt per 

5
Chart 

Note: Le

pr

Source: M

• Avera

non-M

• Avera

days 

rate o

• Avera

days 

0

1

2

3

4

5

6

Inpatient days

6-9. T

in

ength of stay is c

rospective payme

edPAC analysis 

age length o

Medicare inp

age length o

in 2005 to 4

of approxima

age length o

between 20

5.00

3.91

2005

A

rends in

npatient 

calculated from d

ent system. Cha

of Medicare cos

of inpatient s

patients in 20

of inpatient s

4.62 days in 

ately 1.1 per

of stay for all

005 and 201

4.93

3.90

2006

A Data Book: H

 Medicar

length o

ischarges and p

rt excludes critic

st report data from

stay for Medi

011. 

stay for Medi

2011. Medic

rcent during 

 non-Medica

1. 

4.91

3.91

2007

Health care spe

re inpatie

of stay, 2

atient days for m

al access hospita

m CMS. 

care benefic

care benefic

care length o

this period. 

are inpatient

4.89

3.95

2008

Fiscal yea

ending and the

ent and 

005–201

more than 3,000 h

als.

ciaries was n

ciaries fell ne

of stay decli

ts remained 

4.78

3.96

2009

ar

e Medicare prog

non-Med

1 

hospitals covered

nearly 1 day

early 8 perc

ned at an av

nearly unch

4.67

3.93

2010

Medicare b

Non-Medic

gram, June 20

dicare 

d by the acute in

y longer than

ent, from 5.0

verage annu

hanged at 3.

4.62

3.90

0 201

beneficiaries

are inpatients

13 69

npatient 

n for 

00 

ual 

9 

2

0

1

s
70 Acute i

Chart 

Note: 

Source: 

• Acros

depa

appro

admis

result

depa

• The s

consi

perce

depa

urban

admis

both 

56

58

60

62

64

66

68

70

72

74

Percent

inpatient servic

6-10. S

em

IPPS (inpatient 

MedPAC analys

ss all IPPS h

rtment visit i

oximately 7 p

ssions prece

t of an incre

rtment visit a

share of inpa

istently high

ent of inpatie

rtment visit. 

n hospitals w

ssions prece

rural and urb

62.2

61.6

65.1

2005

All IPP

ces

hare of i

mergenc

prospective pay

sis of MedPAR d

hospitals, the

increased fro

percentage 

eded by an e

ase of 280,0

and a decre

atient admis

er for rural h

ent admissio

By contrast

were precede

eded by an e

ban hospital

62.7

62.2

65.4

2006

PS hospitals

inpatient

cy depar

ment system). 

data from CMS. 

e share of in

om 62 perce

points. The 

emergency d

000 inpatient

ase of 40,00

sions preced

hospitals tha

ons provided

, approxima

ed by an em

emergency d

ls. 

63.9

63.5

66.7

2007

Urb

t admiss

rtment vi

npatient adm

ent to 69 per

3 percentag

department v

t admissions

00 inpatient 

ded by an em

an for urban 

 at rural hos

tely 69 perc

mergency de

department v

65.7

65.3

68.5

2008

Fiscal yea

ban IPPS hosp

sions pre

sit by lo

missions prec

rcent from 2

ge point incre

visit betwee

s preceded b

admissions 

mergency d

hospitals. In

spitals were 

ent of inpati

partment vis

visit increas

65.7

65.3

68.5

2009

ar

pitals

eceded b

cation, 2

ceded by an

005 to 2011

ease in the s

en 2010 and 

by an emerg

overall. 

epartment v

n 2011, appr

preceded by

ent admissio

sit. The shar

sed 7 percen

66.5

66.1

69.4

2010

Rural IPPS

by 

2005–201

n emergency

, an increas

share of inpa

2011 was th

gency 

visit is 

roximately 72

y an emerge

ons provided

re of inpatien

ntage points 

69.3

68.9

71.7

2011

S hospitals

11 

y

se of 

atient 

he 

2

ency 

d at 

nt 

for 
Chart 

Note: An

as

Source: M

• The s

hosp

2011

Part A

• A por

incre

status

15

16

17

18

19

20

21

22

23

24

25

Percent

6-11. S

o

nalysis excludes

s critical access h

edPAC analysis 

share of Med

italization in 

, 21.2 perce

A. 

rtion of the d

ase in the nu

s. 

23.5

2005

A

hare of M

ne hosp

Medicare Advan

hospitals and ho

of MedPAR data

dicare benef

a given yea

ent of Medica

decline in be

umber of ca

23.4

2006

A Data Book: H

Medicare

italizatio

ntage claims and

spitals located in

a from CMS. 

ficiaries with

ar declined b

are beneficia

eneficiaries’ u

ses in which

22.9

2007

Health care spe

e Part A 

on, 2005–

d claims for non–

n Maryland. 

h Part A cove

by over 2 per

aries had at 

utilization of 

h beneficiarie

22.6

2008

Fiscal ye

ending and the

benefici

–2011 

–inpatient prospe

erage who h

rcentage po

least one in

f inpatient se

es are serve

21.8

2009

ear

e Medicare prog

aries wit

ective payment sy

had at least o

ints from 20

patient stay 

ervices could

ed in outpatie

21.5

2010

gram, June 20

th at leas

ystem hospitals,

one inpatien

05 to 2011. 

covered und

d reflect the 

ent observat

21.2

0 2011

13 71

st 

such 

nt 

In 

der 

tion 

2

1
72 Acute i

Chart 

Source: Med

• The n

2006

bene

1,000

• The n

nearl

Part A

0

5

10

15

20

25

30

35

40

45

50

Visits or claims per 1,000 beneficiaries

inpatient servic

6-12. N

an

p

dicare hospital co

number of M

 to 2011. Du

ficiary increa

0 beneficiarie

number of M

y 70 percen

A beneficiar

28

10

2006

Outp

Inpat

ces

umber o

nd inpat

er 1,000 

ost reports and M

Medicare out

uring this tim

ased from a

es. 

Medicare inpa

t from 2006 

ies to 17 inp

33

10

2007

atient observ

tient claims pr

of Medica

ient claim

benefici

Medicare outpatie

patient obse

me period, the

pproximately

atient admis

to 2011, jum

patient obser

36

12

200

ation visits pe

receded by o

are outp

ms prece

iaries inc

ent claims data.

ervation visit

e rate of out

y 28 visits pe

ssions prece

mping from 1

rvation case

8 2

Fiscal year

er 1,000 Part 

bservation ca

atient ob

eded by 

creased 

ts increased 

tpatient obse

er 1,000 ben

ded by obse

10 inpatient 

es per benefi

41

13

2009

B beneficiarie

are per 1,000 

bservatio

observa

from 200

nearly 68 p

ervation visit

neficiaries to

ervation care

observation 

iciary. 

44

15

2010

es

Part A benef

on visits

ation car

06 to 201

ercent from 

ts per Part B

o 47 visits pe

e increased 

cases per 1

47

17

2011

ficiaries

re 

11 

B

er 

1,000 
Chart 

Note: Ho

us

pa

Source: M

• In the

but h

perce

• Occu

rates

• Occu

occup

avera

hosp

perce

0

10

20

30

40

50

60

70

80

Occupancy rate (percent)

6-13. H

ospital occupanc

sed, minus nurse

ayment system a

edPAC analysis 

e aggregate,

ave edged d

ent across a

upancy rates

 stood at 65

upancy rates

pancy rate fo

age occupan

ital occupan

ent to over 9

67

48

64

2005

A

Hospital o

cy rates were def

ery bed days use

and critical acces

of Medicare’s H

, hospital oc

down slightly

ll hospitals, 

s are genera

 percent for 

s vary across

or hospitals 

ncy rate of 5

ncy rates var

90 percent in

67

48

64

2006

A Data Book: H

occupan

fined as total bed

ed, over total bed

ss hospitals was

ospital Cost Rep

cupancy rate

y in more rec

their lowest 

lly higher for

urban hosp

s markets an

in Seattle, W

0 percent fo

ry from 30 pe

n Boston, MA

67

48

64

2007

Health care spe

cy rates

d days used (incl

d days available. 

used in this anal

ports. 

es have bee

cent years. I

level in the 

r urban than

itals and 45

nd within ma

WA, was 69 

or hospitals i

ercent to 80 

A. 

67

48

64

2008

Fiscal yea

ending and the

s, 2005–2

luding swing bed

A consistent coh

lysis. 

en relatively 

In 2011, occ

past 7 years

n for rural ho

percent for 

arkets. For e

percent in 2

n Charleston

percent in D

66

47

63

2009

r

e Medicare prog

2011 

d days used) and

hort of approxima

stable over 

cupancy rate

s. 

ospitals. In 20

rural hospita

example, the

2011, compa

n, WV. In ad

Denver, CO,

65

45

62

2010

U

R

A

gram, June 20

d observation be

ately 3,300 prosp

the past dec

es were 62 

011, occupa

als. 

 average 

ared with an 

ddition, indiv

 and from 30

65

45

62

2011

Urban

Rural

All hospitals

13 73

d days 

pective 

cade 

ancy 

vidual 

0
74 Acute i

Chart 

Hospital g

All hospita

Urban 

Rural 

Large urb

Other urb

Rural refe

SCH (fede

SCH (HSP

Medicare 

Other rura

Other rura

Voluntary

Proprietar

Governme

Major teac

Other teac

Nonteach

Note: IM

pa

di

ca

th

*A

in

vo

Fo

wi

Source: M

• Medica

(IPPS)

hospita

care. C

• Specia

throug

This p

• Additio

Patien

add-on

expan

• Outlier

calcula

outlier 

inpatient servic

6-14. M

g

group 

als 

ban 

an 

erral 

eral rate) 

P rate) 

dependent 

al <50 beds 

al >50 beds 

ry 

ent

ching 

ching 

ing 

ME (indirect medic

ayment [rate]). Ch

rect graduate me

ases in 2011. Cha

e HSP or the fed

Additional rural ho

cludes rural addolume add-on, an

or SCHs paid the

ith residency prog

edPAC analysis 

are inpatient pa

) exceeded $11

als. This figure 

Cost-based reim

al payments—w

gh the SCH and

roportion is sim

onal rural hosp

nt Protection an

n policy and cre

ded low-volum

r payments acc

ation (outlier pa

share of 4.8 pe

ces

Medicare 

roup, 20

Base 

80.1% 

79.9 

82.5 

78.5 

81.8 

88.5 

83.5 

74.0 

81.8 

83.6 

88.8 

80.8 

83.2 

73.4 

65.8 

82.2 

86.2 

cal education), D

hart includes all h

edical education p

art excludes critic

eral rate. Rows m

ospital payments 

-on payments suc

nd the low-spendi

e HSP, this catego

grams, low-incom

of claims and im

ayments in 201

12 billion. About

does not reflec

mbursement for

which include IM

d Medicare-dep

milar for urban (2

pital payments i

nd Affordable C

eated a new ad

me add-on amou

counted for 3.9 

ayments as a ra

ercent of IPPS 

inpatien

11 

Percent 

IME

4.9%

5.4

0.7

6.5

3.8

1.1

3.4

0.1

0.0

0.1

0.5

5.2

1.4

7.1

15.9

3.6

0.0

SH (disproportion

hospitals covered

payments. Simula

cal access hospita

may not sum due

are the total paym

ch as the SCH ad

ng county add-on

ory also includes 

me patients, and o

mpact file data fro

1 to hospitals c

t $101 billion (9

ct the $2.9 billio

r CAHs amount

ME, DSH, and o

endent hospita

20.6 percent) a

increased in 20

Care Act of 201

dd-on policy fo

unted to appro

percent of total

atio of outlier pa

payments in fis

nt payme

of total paym

DSH

9.5%

10.0

4.8

10.5

9.4

8.0

7.8

0.0

6.1

6.6

7.1

8.6

11.2

12.1

12.3

9.6

7.8

nate share), SCH

d by Medicare’s a

ated payments re

als. Medicare-de

 to rounding. 

ments made to h

dd-on, the Medica

n mandated by th

the payments th

outlier cases. 

om CMS. 

covered by the a

90 percent) wen

on in payments 

ts to an increas

outlier payment

al programs—ac

and rural hospita

011 due to two 

0. These provi

r hospitals in c

ximately $330 

l inpatient paym

ayments to base

scal year 2011, 

ents, by s

ments

Ad

Outlier

3.9%

4.1

1.3

4.5

3.7

2.2

2.5

0.2

1.1

0.8

1.5

3.8

3.2 

4.7

5.8

3.6

3.0

H (sole communit

acute inpatient pro

eflect 2011 payme

pendent hospital 

hospitals beyond t

are-dependent ho

he Patient Protec

ey received indire

acute inpatient 

nt to urban hos

to critical acces

se of about $30

ts as well as ad

ccount for 20 p

als (18.0 perce

temporary pro

isions expande

counties with lo

million in paym

ments in 2011. T

e payments plu

slightly lower t

source a

dditional rura

hospital*

1.7% 

0.7 

11.2 

0.1 

1.3 

0.3 

2.8 

25.7 

10.9 

8.8 

2.2 

1.7 

1.0 

2.8 

0.2 

1.1 

3.1 

ty hospital), HSP 

ospective payme

ent rules applied 

 category include

the federal base 

ospital add-on, th

ction and Affordab

rectly attributable 

prospective pa

pitals and $11 

ss hospitals (CA

00 million above

dditional payme

ercent of all inp

ent). 

ovisions contain

ed the existing 

ow levels of spe

ments to hospit

The legislativel

us outlier payme

han the annual

and hosp

Tota

l payme

(millio

$112,

100,

11,

58,

42,

3,

1,

4,

1,

1,

80,

16,

15,

25,

40,

46,

(hospital specific

nt system and ex

to actual numbe

es facilities paid a

rate. This catego

he expanded lowble Care Act of 20

to the costs asso

ayment system 

billion went to r

AHs) for inpatie

e the IPPS rate

ents to rural hos

patient paymen

ned within the 

low-volume ho

ending. In 2011

tals. 

y specified 

ents) produces

l goal of 5.1 per

pital 

al 

ents 

ns) 

052 

635 

417 

112 

523 

194 

209 

010 

396 

312 

297 

607 

178 

267 

212 

651 

189 

c

xcludes 

r of 

at either 

ory 

-

010. 

ociated 

rural 

ent 

. 

spitals 

ts. 

ospital 

1, the 

s an 

rcent.
Chart 

Note: PP

on

co

Source: M

• Medi

Medi

alloca

can w

alloca

• Follow

over 

Medi

• Medi

inpat

marg

inpat

-10

-8

-6

-4

-2

0

2

4

6

8

Margin (percent)

6-15. M

PS (prospective 

n Medicare-allow

overed by the ac

edPAC analysis 

care’s acute

care’s inpati

ate overhead

we estimate 

ated (see Ch

wing implem

the next 10 

care payme

care inpatien

ient margins

ins that wer

ient Medicar

6.6

2002 2

A

Medicare 

payment system

wable costs and e

ute care inpatien

of Medicare cos

e inpatient m

ient hospital

d costs acro

Medicare co

hart 6-17). 

mentation of 

years as cos

nts. In 2011

nt margins v

s that were 7

e –18.2 perc

re margins in

2.4

-0.3

2003 200

A Data Book: H

acute in

m). A margin is ca

exclude critical a

nt PPS. Maryland

st report data from

margin reflect

PPS. The in

oss service li

osts without 

the Balance

sts rose fast

, the margin

vary widely. 

7.2 percent o

cent or lowe

n 2011. 

3 -0.5

4 2005

Health care spe

npatient P

alculated as reve

ccess hospitals. 

d hospitals are ex

m CMS. 

ts payments

npatient mar

ines. Only by

the potentia

ed Budget Ac

ter than the 

n was –4.0 p

In 2011, one

or higher, an

r. Thirty-nine

-2.2

-3

2006 20

Fiscal ye

ending and the

PPS mar

enue minus costs

Medicare acute 

xcluded from this

s and costs f

rgin may be 

y combining

al influence o

ct of 1997, in

3 percent av

ercent, dow

e-quarter of 

nd another o

e percent of

3.6

-4.7

007 2008

ar

e Medicare prog

rgin, 200

s, divided by reve

inpatient margin

s analysis. 

for services c

influenced b

g data for all 

of how overh

npatient mar

verage annu

n from –1.7 

hospitals ha

one-quarter h

f hospitals ha

-2.3

2009

gram, June 20

02–2011

enue. Data are b

n includes service

covered by 

by how hosp

major servic

head costs a

rgins decline

ual increase 

percent in 2

ad Medicare

had inpatien

ad positive 

-1.7

-4

2010 20

13 75

based 

es 

pitals 

ces 

are 

ed 

in 

2010. 

t 

.0

11
76 Acute i

Chart 

Note: PP

on

co

Source: M

• Urba

show

urban

press

slight

• In 20

respe

since

well a

hosp

-10

-8

-6

-4

-2

0

2

4

6

8

10

Margin (percent)

inpatient servic

6-16. M

ru

PS (prospective 

n Medicare-allow

overed by the ac

edPAC analysis 

n hospitals h

wn in chart), b

n hospitals h

sures from m

tly higher tha

11, the marg

ectively. The

e 2002 were 

as growth in 

itals with low

7.2

2

1.6

0.

2002 20

ces

Medicare 

ural loca

payment system

wable costs and e

ute care inpatien

of Medicare cos

historically h

but the gap 

had greater s

managed car

an those for 

gins of rural 

e narrowing a

the result of

the number

w margins fro

2.7

-0.3 .7

0.5

03 2004

acute in

ation, 200

m). A margin is ca

exclude critical a

nt PPS. Maryland

st report data from

had higher M

narrowed in

success in c

re. From 200

urban hosp

and urban h

and subsequ

f payment po

r of critical a

om the PPS

-0.5

0.2

2005

npatient P

02–2011

alculated as reve

ccess hospitals. 

d hospitals are ex

m CMS. 

Medicare inpa

 2002 and 2

controlling co

04 to 2011, r

itals. 

hospitals we

uent reversa

olicies targe

ccess hospi

. 

-2.3

-3

-1.5

-2

2006 20

Fiscal yea

PPS mar

enue minus costs

Medicare acute 

xcluded from this

atient margi

2003. One fa

ost growth, a

rural hospita

ere –0.9 perc

al between th

eted at raisin

tals, which r

3.7

-4.9

2.5 -3.2

007 2008

ar

rgin, by u

s, divided by reve

inpatient margin

s analysis. 

ns than rura

actor in this g

at least partly

als’ inpatient

cent and –4.

hese two gro

ng rural hosp

removed ma

-2.4

-1.6

2009

urban an

enue. Data are b

n includes service

al hospitals (

gap was tha

y in respons

t margins we

4 percent, 

oups of hosp

pital paymen

any rural 

-1.9

-4

0.6

-0

2010 20

Urb

Ru

nd 

based 

es 

not 

t 

se to 

ere 

pitals 

nts as 

4.4

0.9

011

ban

ral
Chart 

Note: A 

ex

in

ed

Source: M

• The o

outpa

servic

follow

• The o

–5.8 

• In 20

anoth

had p

-8

-6

-4

-2

0

2

4

Margin (percent)

6-17. O

margin is calcula

xclude critical acc

patient psychiatr

ducation and bad

edPAC analysis 

overall Medi

atient, skilled

ces, as well 

ws a trend si

overall Medi

percent. 

11, one-qua

her one-quar

positive over

2.2

-

2002 2

A

Overall M

ated as revenue 

cess hospitals. O

ric and rehabilitat

d debts. Maryland

of Medicare cos

care margin

d nursing, ho

as direct gra

milar to that

care margin

arter of hosp

rter had mar

rall Medicare

-1.3

-3.1

2003 2004

A Data Book: H

edicare 

minus costs, div

Overall Medicare

tion unit, skilled n

d hospitals are e

st report data from

 incorporate

ome health c

aduate med

t for the Med

 in 2002 was

itals had ove

rgins of –16.

e margins in

-3.1

4 2005

Health care spe

margin, 

vided by revenue

 margins cover t

nursing facility, a

excluded from thi

m CMS. 

es payments

care, and inp

ical educatio

dicare inpatie

s 2.2 percen

erall Medica

.9 percent or

 2011. 

-4.8

-

2006 2

Fiscal ye

ending and the

2002–20

e. Data are based

the costs and pay

and home health 

is analysis. 

s and costs f

patient psyc

on and bad d

ent margin.

nt. In fiscal y

are margins o

r lower. Abo

-6.1

-7.3

2007 2008

ear

e Medicare prog

011 

d on Medicare-al

yments of acute 

 services, as we

for acute inp

hiatric and r

debts. The o

year 2011, it 

of 3.6 perce

out 34 perce

3

-5.4

8 2009

gram, June 20

llowable costs an

inpatient, outpat

ll as graduate m

patient, 

rehabilitative

overall marg

was 

nt or higher,

nt of hospita

-4.7

-

2010 2

13 77

nd 

tient, 

edical 

e

in 

, and 

als 

-5.8

2011
78 Acute i

Chart 

Note: A 

ex

ou

gr

Source: M

• As w

hosp

have 

• The d

throu

was 2

Medi

hosp

highe

urban

chang

2003

assis

-10

-8

-6

-4

-2

0

2

4

Margin (percent)

inpatient servic

6-18. O

lo

margin is calcula

xclude critical acc

utpatient, inpatie

raduate medical 

edPAC analysis 

ith inpatient 

itals than for

gradually be

difference in

ghout the m

2.7 percent, 

care margin

itals. Howev

er than for ur

n hospitals w

ges made in

 helped to im

st rural hospi

2.7

-1

-2.2

-3

2002 20

ces

Overall M

ocation, 2

ated as revenue 

cess hospitals. O

nt psychiatric an

education and ba

of Medicare cos

margins, ov

r rural hospit

egun to exce

 overall Med

middle of the 

compared w

 for urban ho

ver, since the

rban hospita

was –6.2 per

n the Medica

mprove the r

itals was imp

1.0

-3.0

3.7

-3.2

003 2004

edicare 

2002–20

minus costs, div

Overall Medicare

d rehabilitation u

ad debts. Maryla

st report data from

verall Medica

tals, but sinc

eed those fo

dicare margi

past decade

with –2.2 per

ospitals was

en the overa

als. Most rec

rcent, compa

are Prescript

relative finan

plemented a

-3.1

-2.7

2005

margin, 

11 

vided by revenue

 margins cover t

unit, skilled nursin

and hospitals are

m CMS. 

are margins 

ce 2005 ove

or urban hos

ns between 

e. In 2002, th

rcent for rura

s –3.0 perce

all Medicare 

cently, in 201

ared with –3

tion Drug, Im

ncial position

after 2008. 

-4.9

-6

-4.4

-5

2006 20

Fiscal yea

by urban

e. Data are based

the costs and pay

ng facility, and h

e excluded from t

historically w

erall Medicar

spitals. 

urban and r

he overall m

al hospitals. 

nt, compare

margin for r

11, the overa

3.2 percent fo

mprovement,

n of rural hos

6.2

-7.5

5.2

-6.0

007 2008

ar

n and ru

d on Medicare-al

yments of acute 

ome health serv

this analysis. 

were higher 

re margins fo

rural hospita

margin for urb

 In 2004, the

ed with –3.2 

rural hospita

all Medicare

or rural hosp

, and Moder

spitals. Furth

-5.5

-4.6

2009

ral 

llowable costs an

hospital inpatien

ices, as well as d

for urban 

or rural hosp

als narrowed

ban hospital

e overall 

percent for r

ls has been 

 margin for 

pitals. Policy

rnization Act

her legislatio

-4.9

-6

-2.8 -3

2010 20

Urb

Rur

nd 

nt, 

direct 

pitals 

d

s 

rural 

y

t of 

on to 

6.2

3.2

011

ban

ral
Chart 

Note: A 

An

ou

nu

an

 

Source: M

• Hosp

perce

marg

categ

• Given

consi

servic

we ge

• Inpat

dispr

perce

-20

-15

-10

-5

0

5

10

Margin (percent)

6-19. M

M

margin is calcula

nalysis excludes

utpatient, psychia

ursing facilities a

nalysis. 

edPAC analysis 

pital outpatie

ent, 25 perce

ins of 2.4 pe

gories. 

n hospital ac

idered in the

ces provided

enerally con

tient margins

oportionate 

ent. 

6.6

2.2

-8.3

-

2002 2

A

Medicare 

Medicare 

ated as revenue 

critical access h

atric, and rehabil

nd home health 

of Medicare cos

nt margins v

ent of hospit

ercent or hig

ccounting pr

e context of M

d to Medicar

nsider costs a

s exceed out

share add-o

2.4

-0.3

-1.3

-3.1

-11.5 -10.

2003 2004

A Data Book: H

hospital

margins

minus costs, div

hospitals. Overall

itation services (

services; and gra

st report data from

vary. In 2011

tals had mar

gher. Outpati

ractices, mar

Medicare pa

re beneficiar

and paymen

tpatient mar

on payments

3 -0.4

1 -3.1

8

-9.3

4 2005

Health care spe

l outpatie

s, 2002–2

vided by revenue

l Medicare margi

(not paid under th

aduate medical e

m CMS. 

1, while the a

rgins of –21.

ient margins

rgins for hos

ayments and

ries. Hospita

nts overall. 

rgins due to 

s, which incre

-2.2 -

-4.8 -

-11.8 -1

2006 2

Fiscal ye

ending and the

ent, inpa

2011 

e. Data are based

ins cover the cos

he prospective p

education. Maryl

aggregate o

3 percent or

s also differe

spital outpati

d hospital co

als allocate o

indirect med

eased inpat

-3.6

-4.7

-6.1

-7.3

12.2

-13.7

2007 2008

ear

In

O

O

e Medicare prog

atient, an

d on Medicare-al

sts and payment

payment system)

land hospitals ar

outpatient ma

r lower, and 

ed widely acr

ient services

osts for the fu

overhead to 

dical educati

ient paymen

-2.3

3

-5.4

7

-11.7

8 2009

npatient marg

Overall Medica

Outpatient ma

gram, June 20

nd overa

llowable costs. 

ts of hospital inpa

); hospital-based

re excluded from 

argin was –1

25 percent 

ross hospita

s must be 

ull range of 

all services,

ion and 

nts by rough

-1.7 -4

-4.7 -

-10.5 -1

2010 20

in

are margin

rgin

13 79

all 

atient, 

 skilled 

this 

11.0 

had 

al 

 so 

ly 15 

4.0

5.8

11.0

011
80 Acute i

Chart 

Note: A 

al

an

 *T

Source: M

• The t

paye

inpat

nonp

Medi

includ

• From

total 

syste

inves

2011

perce

• In 20

less t

prosp

while

perce

inpat

marg

0

1

2

3

4

5

6

7

8

9

10

Margin (percent)

inpatient servic

6-20. H

margin is calcula

l payers, plus non

nalysis. 

The significant dro

edPAC analysis 

total hospita

rs⎯reflects 

ient, outpatie

atient reven

care inpatien

de investme

m 2002 to 200

margin decli

em was imple

stment losse

, total margi

ent in 2010. 

11, 72 perce

than the Med

pective paym

e another one

entage point

ient margins

ins. 

3.7

4

2002 20

ces

Hospital t

ated as revenue m

npatient revenue

op in total margin

of Medicare cos

l margin for 

the relations

ent, post-ac

ue, such as 

nt margin an

nt revenue. 

07, total mar

ined to 1.8 p

emented. Th

s for hospita

ns decrease

ent of hospit

dicare inpati

ment system

e-quarter ha

ts compared

s and a 21 p

4.3 4.3

003 2004

total all-p

minus costs, divid

. Analysis exclud

n includes investm

st report data from

all payers⎯

ship of all ho

ute, and non

investment 

nd overall Me

rgins increas

percent, its lo

he 2008 dec

als, which re

ed slightly to

tals had pos

ient or overa

 hospitals ha

ad margins th

 with a 25 pe

ercentage p

4.8

4 2005

payer ma

ded by revenue. T

es critical access

ment losses stem

m CMS. 

⎯Medicare, M

ospital reven

npatient serv

revenue. Ot

edicare mar

sed to the hi

owest level s

cline of the U

esulted in a c

o 5.8 percent

itive total ma

all Medicare 

ad total mar

hat were –0

ercentage p

point interqua

5.4

6

2006 20

Fiscal yea

argin, 20

Total margin inclu

s hospitals. Mary

mming from the de

Medicaid, oth

nues to all ho

vices. The to

ther types of

rgin—are op

ighest level 

since the inp

U.S. stock m

correspondin

t, down from

argins. The t

margin. In 2

rgins that we

.7 percent o

point interqua

artile spread

6.0

1.8

007 2008

ar

*

002–2011

udes all patient c

yland hospitals ar

ecline of the U.S. 

her governm

ospital costs

otal margin a

f margins we

perating marg

in a decade

patient prosp

arket resulte

ng decline in

m the 13-yea

total margin 

2011, one-qu

ere 9.3 perce

or lower, a sp

artile spread

d for overall 

4.3

8 2009

*

1

care services fund

re excluded from

stock market in 2

ment, and pri

s, including 

also includes

e track—

gins that do 

. In 2008, th

pective paym

ed in signific

n total margi

r high of 6.3

varied muc

uarter of 

ent or higher

pread of 10 

d for Medicar

Medicare 

6.3

5

2010 20

*

ded by 

m this 

2008. 

ivate 

s

not 

he 

ment 

cant 

n. In 

3

h 

r, 

re 

5.8

011
Chart 

Note: A 

by

ho

 * S

Source: M

• In 20

In 20

hosp

privat

incre

• In 20

marg

funde

declin

in tur

track—

do no

0

1

2

3

4

5

6

7

8

9

10

Margin (percent)

6-21. H

lo

margin is calcula

y all payers, plus

ospitals are exclu

Significant drop i

edPAC analysis 

10 and 2011

11, total ma

itals. The gr

te payer reim

ase in cost g

08, both rura

ins in the pa

ed by all pay

ne of the U.S

rn resulted in

—Medicare 

ot include inv

3.9

4.

3.6

4.

2002 20

A

Hospital t

ocation, 2

ated as revenue 

s nonpatient reve

uded from this an

in total margin in

of Medicare cos

1, urban hos

rgins were 5

owth in marg

mbursement

growth relati

al and urban

ast 15 years

yers, plus no

S. stock mar

n a correspo

inpatient ma

vestment rev

.2

5.1

.3

4.2

03 2004

A Data Book: H

total all-p

2002–20

minus costs, div

enue such as inve

nalysis. 

cludes investme

st report data from

spitals had h

5.9 percent f

gins in 2009

t rates. The d

ve to the pri

n hospitals e

. Hospitals’ t

onpatient rev

rket resulted

onding declin

argin and ov

venue. 

5.7

4.7

2005

Health care spe

payer ma

11 

vided by revenue

estment revenue

ent losses resultin

m CMS. 

higher total (a

for urban ho

9 and 2010 r

decline in al

or two years

experienced 

total margins

venue, such 

d in significan

ne in total ma

verall Medica

5.9

5.

5.3

6

2006 20

Fiscal yea

ending and the

argin, by

e. Total margin in

es. Analysis exclu

ng from the U.S. 

all-payer) m

spitals and 5

reflects low c

ll-payer marg

s. 

their lowest 

s include all 

as investme

nt investmen

argins. Othe

are margin—

9

2.4

6.0

1.7

007 2008

ar

*

*

e Medicare prog

y urban a

ncludes all patien

udes critical acce

 stock market de

argins than 

5.0 percent f

cost growth 

gins in 2011

t level of tota

 patient care

ent revenue.

nt losses for

er types of m

—are operati

3.7

4.3

2009

*

*

gram, June 20

and rural

nt care services f

ess hospitals. Ma

ecline of 2008. 

rural hospita

for rural 

and increas

 reflects an 

al (all-payer)

e services 

. The 2008 

r hospitals, w

margins we 

ng margins 

5.4

6.4

2010 20

Rur

Urb

13 81

l

funded 

aryland 

als. 

ing 

which 

that 

5.0

5.9

011

ral

ban
82 Acute i

Chart 

Note: M

ho

re

cr

 *S

Source: M

• The t

other

hosp

hosp

• Begin

reach

was i

marg

-2

0

2

4

6

8

10

Margin (percent)

inpatient servic

6-22. H

20

ajor teaching ho

ospitals have a ra

evenue. Total ma

ritical access hos

Significant drop in

edPAC analysis 

total margins

r teaching an

itals stood a

itals at 6.9 p

nning in 200

hing a more 

nterrupted b

in. Since the

4.5 5

4.4 4

1.7

2

2002 20

Non

Oth

Maj

ces

Hospital t

002–201

spitals are define

atio of greater th

argin includes all 

spitals. Maryland

n total margin inc

of Medicare cos

s for major te

nd nonteach

at 4.3 percen

percent and 6

2, major tea

than two-de

by a steep de

en, total mar

5.0

4.7 4.5

5.0

2.9 3.2

003 2004

nteaching

er teaching

or teaching

total all-p

1 

ed by a ratio of in

an 0 and less tha

patient care serv

 hospitals are ex

cludes investmen

st report data from

eaching hos

ing hospitals

nt compared 

6.1 percent,

aching hospit

ecade high in

ecline in the

rgins have re

5.1

5.4

3.7

4 2005

payer ma

nterns and reside

an 0.25. A margi

vices funded by a

xcluded from this

nt losses resultin

m CMS. 

spitals have c

s. In 2011, t

with other te

 respectively

tals’ total (al

n 2007, at 5.

eir investmen

ecovered an

5.3

5

6.2

7

4.6

5.

2006 20

Fiscal yea

argin, by

ents to beds of 0

in is calculated a

all payers, plus n

s analysis. 

ng from the U.S. 

consistently 

he total mar

eaching hos

y. 

ll-payer) ma

.4 percent. H

nt revenues,

nd remain ab

5.8

2.9

7.0

2.5

.4

-0.4

007 2008

ar

*

y teachin

0.25 or greater, w

as revenue minus

nonpatient reven

stock market dec

 been lower 

rgin for majo

spitals and n

rgins steadil

However, in 

 resulting in 

bove their hi

4.8

5.1

2.7

8 2009

*

*

*

ng status

while other teach

s costs, divided b

nue. Analysis exc

cline of 2008. 

than those 

or teaching 

nonteaching 

ly increased

2008, this tr

a negative t

storic averag

6.5 6

7.2 6

5.1

4

2010 20

s, 

ing 

by 

cludes 

for 

d, 

rend 

total 

ge. 

6.1

6.9

4.3

011
Chart 

Hospital g

All hospita

Major teac

Other teac

Nonteach

Both IME 

IME only 

DSH only

Neither IM

Note: IM

M

Source: M

• Majo

2011

receiv

• Hosp

2011

below

perce

• The p

teach

the p

(all-p

6-23. M

sh

group 

als 

ching 

ching 

ing 

and DSH 

ME nor DSH 

ME (indirect medi

aryland hospitals

edPAC analysis 

r teaching h

. Their bette

ved from the

pitals that rec

, the Medica

w those of m

entage point

pattern of Me

hing hospital

attern for tot

ayer) margin

A

Medicare 

hare stat

Sha

hos

10

1

2

7

2

5

1

ical education), D

s are excluded fr

of 2011 Medicar

ospitals had

er financial p

e IME and D

ceived neithe

are inpatient

major teachin

ts lower. 

edicare inpa

ls have high

tal margins b

ns than othe

A Data Book: H

margins

tus, 2011

are of

spitals

00%

10 

21 

70 

26 

4 

54 

16 

DSH (disproporti

rom this analysis

re cost report da

d the highest

performance 

DSH adjustm

er IME nor D

margins of 

ng hospitals, 

atient and ov

er Medicare

by teaching 

er hospitals (

Health care spe

s by teac

1

Share of 

Medicare

inpatient

payments

100% 

27

31

42

53

5

34

8

onate share). Nu

s. 

ta from CMS. 

t Medicare in

was largely 

ents on the 

DSH paymen

these hospit

and overall 

verall Medica

e margins tha

status—maj

(see Chart 6

ending and the

ching and

M

in

m

–

–

umbers may not 

npatient and

y due to the a

inpatient pa

nts had the l

tals were ab

Medicare m

are margins 

an other hos

jor teaching 

6-22). 

e Medicare prog

d dispro

Medicare 

npatient

margin 

–4.0% 

4.3

–4.8

–8.8

0.7

–13.6

–5.9

–20.5

sum to totals du

d overall Med

additional pa

ayment rates

lowest Medi

bout 25 perc

margins were

by teaching

spitals—is th

hospitals ha

gram, June 20

oportiona

Overal

Medicar

margin

–5.8%

–2.4

–5.4

–8.3

–3.2

–12.3

–6.3

–16.0

e to rounding. 

dicare margi

ayments the

s. 

care margin

entage poin

e nearly 14 

g status—ma

he opposite o

ave lower to

13 83

ate 

l 

re 

n

%

ins in 

y 

ns. In 

ts 

ajor 

of 

tal 
84 Acute i

Chart 

 

Number o

Financial

Non-Medi

 (private

Standardi

(as a shar

 For-prof

 Nonpro

 For-prof

Annual gr

discharge

Overall 20

Patient c

Total hosp

Medicare 

Medicaid 

Medicare 

 

Note: St

ef

co

M

ye

a 

pe

th

Source: M

• Highe

Hosp

be un

inpatient servic

6-24. F

of hospitals 

l characteris

icare margin 

e, Medicaid, u

zed cost per 

re of the natio

fit and nonpro

fit hospital 

fit hospital 

rowth in cost p

e, 2008–2011 

011 Medicare

haracteristic

pital discharg

share of inpa

share of inpa

case-mix ind

tandardized cost

ffect of teaching a

omplete cost repo

edicare profit ma

ear from 2006 to 

median non-Med

ercent per year fr

at fit into neither

edPAC analysis 

er financial p

pitals with low

nder financia

ces

inancial 

tics, 2011 (m

uninsured) 

discharge 

onal median) 

ofit hospitals 

per 

e margin (med

cs (medians) 

es in 2011 

atient days 

atient days 

ex

ts are adjusted fo

and low-income 

orts on file with C

argin of 1 percen

2010 if the hosp

dicare profit marg

rom 2006 to 201

r the high- nor the

of Medicare cos

pressure ten

wer volume, 

al pressure. 

pressur

High

(non

ma

medians) 

dians)

4

or hospital case m

Medicare patien

CMS by October 

nt or less from 20

pital’s Medicare p

gin greater than 

0 if the hospital’s

e low-pressure c

st report and claim

nds to lead to

lower case 

re leads t

Level of 

h pressure

n-Medicare

rgin ≤ 1%)

684

–2.8%

92

92

92

3%

4%

,438

44%

11

1.32

mix, wage index,

ts on hospital co

2012. High-pres

006 to 2010 and w

profits had been z

5 percent from 2

s Medicare profit

ategories. 

ms files from CM

o lower cost 

mix, and hig

to lower 

financial pres

Me

pre

3

7,3

1

, outliers, transfe

osts. The sample

ssure hospitals a

with a net worth 

zero. Low-press

2006 to 2010 and

ts had been zero

MS. 

growth and 

gher Medica

costs 

ssure, 2006–2

edium

ssure

389

3.8%

96

96

95

2%

-3%

398

41%

10

.43

er cases, interest

e includes all hos

are defined as tho

that grew by les

ure hospitals are

d a net worth tha

o. Medium-pressu

 lower costs

aid charges a

2010 

Low pres

(non-Med

margin > 

1,567

12.4

104

105

99

3

 -10

7,177

43

10

1.48

t expense, and th

spitals that had 

ose with a media

s than 1 percent

e defined as thos

at grew by more t

ure hospitals are

s per dischar

are more like

ssure 

icare 

5%) 

7

4% 

4

5

9

3% 

0% 

7

3% 

0

8

he 

an nont per 

se with 

than 1 

e those 

rge. 

ely to 
Chart 

Note: Da

se

M

in

Source: M

sy

• Change

financia

• During 

chart a

costs p

Medica

• As hea

the priv

percen

• As pres

growth 

private 

• Since 2

genera

future y

growth 

private 

1.

-2

0

2

4

6

8

10

12

19

Percent change in cost per discharge

6-25. C

d

19

ata are for comm

ervices. Imputed 

edicare and Med

cludes self-pay p

edPAC analysis 

ystem and Ameri

es in Medicare c

al pressure from 

the first period, 

s a steep increas

per discharge ros

are’s market bask

alth maintenance 

vate payer paym

t per year, which

ssure from privat

exceeded growt

payer payment2008, cost growth

al slowing of the e

years and enactm

down to the leve

insurers’ prices 

9.2

8.6

.20

1.22

1.28

987 1989 1

Ch

Pa

Pa

A

Change in

ischarge

987−201

munity hospitals (

values were use

dicaid managed 

patients. 

of Medicare Cos

can Hospital Ass

costs per discharg

private payers o

1987–1992, priva

se in the paymen

se 8.3 percent pe

ket index. 

organizations an

ent-to-cost ratio 

h was more than 

te payers waned

th in the market b

to-cost ratio (pro

h has slowed dow

economy, which 

ment of laws rest

el of input price in

has resulted in in

5.3

0.8

1.32

1.24

1991 1993

hange in Medicar

ayment-to-cost ra

ayment-to-cost ra

A Data Book: H

n Medica

e and pri

1 

(including critical

ed for missing da

care patients fro

st Report files fro

sociation Annual

ge suggest that h

over four distinct

ate payers’ paym

nt-to-cost ratio). T

er year during the

nd other private 

dropped substan

2 percentage po

 after 1999, the p

basket by 2 perc

ofit margins) slow

wn to between 2

has reduced inp

training Medicare

nflation. The com

ncreases in the p

-1.2

1.

4

1.22

1.1

1995 1997

Fi

re acute inpatien

atio (all private pa

atio (third-party p

Health care spe

are hosp

vate pay

 access hospital

ata (about one-th

m the private pa

om CMS and CM

 Survey of Hosp

hospitals have re

periods between

ments rose much

This result sugge

ese years, more 

insurers exerted 

ntially. The rate o

oints below the a

private payer pay

centage points a 

wed, and in 2008

2 percent and 3 p

put price inflation

e and Medicaid p

mbination of lowe

profit margins on

1

2.4

8

16 1.16

1

1999 2001

iscal year

t costs per disch

ayers excluding M

payers only; exclu

ending and the

pital inpa

yer paym

s and Maryland 

hird of observatio

yment-to-cost ra

MS’s rules for the

itals. 

esponded to the 

n 1987 and 2011

h faster than the c

ests minimal pre

than 3 percentag

 more pressure d

of cost growth plu

average increase

yment-to-cost ra

year. Between 2

 cost growth mor

percent per year.

. In addition, unc

prices may be ind

er annual cost gr

n privately insure

8.1

5.6

.19

1.29

2003 2005

harge

Medicare and M

udes self-pay pa

e Medicare prog

tient cos

ment-to-c

hospitals) and co

ons). Data for 200

atio. The private p

e acute inpatient 

incentives posed

. 

cost of treating p

essure from priva

ge points a year 

during the secon

ummeted to an a

e in the market ba

atio rose sharply, 

2005 and 2008, t

re closely match

. This decline is p

certainty about ec

ducing hospitals 

rowth and continu

ed patients. 

5.1

5.5

2.9

1.30

1.27

1.34

1.40

5 2007 200

edicaid managed

atients)

gram, June 20

sts per

cost ratio

over all hospital 

06–2010 exclude

payment-to-cost 

prospective paym

d by the rise and

patients (seen in 

ate payers. Medic

above the increa

nd period, 1993–

average of only 0

asket. 

and hospital cos

he growth in the 

ed the market ba

partially due to th

conomic growth 

to restrain their 

ued increases in

9

2.0

2.8

4

1.36 1.37

0

1.46 1.47

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1.45

1.50

09 2011

d care)

13 85

o, 

e

ratio 

ment 

d fall of 

the 

care 

ase in 

1999, 

0.8 

st 

asket. 

he 

in 

cost Payment-to-cost ratio
86 Acute i

Chart 

Note: An

ca

(c

Source: Am

• The a

to 22

billion

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few p

patie

costs

struct

charg

outlie

an at

exces

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2011

• The m

for ei

2011

0

50

100

150

200

250

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inpatient servic

6-26. 

nalysis includes 

alculated as the 

charges/costs – 1

merican Hospita

average mar

9 percent in

n). 

d growth in c

patients pay 

nts, who ma

s) may reflec

ture their pa

ges in 2002 

er payments

ttempt to cur

ssive increa

markup of ch

) than for ru

markup of ch

ther nonprof

). 

139

2002 2

ces

Markup 

Medicare

all community h

amount of charg

1). 

al Association An

rkup of hosp

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charges may

full charges

ay pay full ch

ct hospitals’ a

ayments as a

and 2003 m

. Toward the

rb hospitals’ 

ses in charg

harges over 

ral hospitals

harges over 

fit hospitals 

157

167

2003 200

of hospi

e service

hospitals (includi

ges over the amo

nnual Survey of 

pitals’ charge

pital charges

y have little i

. However, c

harges. More

attempts to 

a discount of

ay have res

e end of fisca

opportunity 

ges. 

costs is gen

s (165 perce

costs is high

(208 percen

7

176

4 2005

tal charg

es, 2002–

ing critical acces

ount of costs, m

Hospitals. 

es above cos

s ($579 billio

impact on ho

charge grow

e rapid grow

maximize re

ff charges). 

ulted from s

al year 2003

to increase 

nerally highe

nt in 2011).

her for for-pr

nt in 2011) or

181

2006 2

Fiscal ye

ges abov

–2011

ss hospitals and

minus the amount

sts rose from

on) are now o

ospital finan

wth may sign

wth in charge

evenue from 

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some hospita

3, Medicare 

their outlier 

er for urban h

rofit hospital

r governmen

185

193

2007 200

ear

ve costs 

 hospitals in Ma

t that charges eq

m about 139

over three ti

cial perform

nificantly affe

es (relative to

private pay

ally large incr

als manipula

revised its o

payments th

hospitals (23

ls (333 perc

nt hospitals 

3

207

08 2009

for 

aryland). Markup

qual costs 

9 percent in 2

mes costs ($

mance becau

ect uninsured

o growth in 

ers (who oft

reases in 

ating Medica

outlier policy 

hrough 

39 percent in

ent in 2011)

(157 percen

218

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ps are 

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$176 

se 

d

ten 

are 

in 

n

) than 

nt in 

229

2011
Chart 

Source: 

• The n

since

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chang

for co

for in

post-

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15 m

requi

no lo

they a

conve

of CA

20

40

60

80

1,00

1,20

1,40

Number of critical access hospitals

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number of cr

e leveled off 

ncrease in C

ges that ma

ost-based re

patient serv

acute servic

re 2006, a h

iles by seco

rement by d

nger waive t

are grandfat

erted, most w

AHs to rema

41

13

0

0

0

0

0

0

0

0

1999 200

A

umber o

Rural Hospital Fle

ritical access

at approxim

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eimbursemen

ices, outpati

ces in swing 

ospital could

ndary road f

declaring the

the distance

thered into t

would not m

in fairly cons

39

341

563

00 2001 200

A Data Book: H

of critica

exibility Program

s hospitals (

ately 1,300 

een 1999 and

on to CAH s

nt. Currently

ient services

beds. 

d convert to 

from the nea

e hospital a “

e requiremen

he program.

meet the dista

stant going f

3

722

875

02 2003 2004

Health care spe

l access

 and CMS. 

CAHs) grew

facilities. 

d 2006 is pa

status easier

y, CAHs are 

s (including l

CAH status 

arest hospita

necessary p

nt. While mo

. Among sm

ance require

forward, abs

5

1,055

1,280

4 2005 2006

Calendar

ending and the

s hospita

w rapidly from

artly due to a

r and expand

paid their M

laboratory a

if: (1) it was

al, or (2) the 

provider.” Sta

st existing C

all rural hos

ement. There

sent any add

0 1,283 1,291

6 2007 2008

r year

e Medicare prog

als, 1999–

m 1999 to 20

a series of le

ded the serv

Medicare cos

nd therapy s

s 35 miles by

state waive

arting in 200

CAHs fail the

pitals that ha

efore, we ex

ditional statu

1 1,302 1,306

8 2009 2010

gram, June 20

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vices that qu

sts plus 1 pe

services), an

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06, states co

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tory change

1,324 1,329

2011 2012

13 87

ualify 

rcent 

nd 

ad or 

ce 

ould 

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es. 

1,328

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88 Acute i

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• The i

new p

• Medi

estim

• Inpat

the a

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Dollars (in billions)

inpatient servic

6-28. M

20

MS, Office of the

npatient psy

payment sys

care program

mated 3 perc

tient psychia

cute care in

3.5 3

2002 2

ces

Medicare 

002–201

e Actuary. 

ychiatric faci

stem was ph

m spending 

ent per year

atric care furn

patient pros

3.5

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003 2004

paymen

2 

lity prospect

hased in ove

for beneficia

r between 20

nished in sc

pective paym

4.0 4

2005 2

nts to inp

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002 and 201

atter beds in

ment system

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patient ps

nt system sta

ear period. 

n inpatient p

12. 

n acute care

m is not inclu

4.0 4

2008 2

ear

sychiatr

arted Januar

sychiatric fa

e hospitals a

uded in this c

4.1

4.3

2009 2010

ric faciliti

ry 1, 2005. T

acilities grew

nd paid und

chart. 

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2011 2

ies, 

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w an 

er 

4.7

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Chart 

Cases 

Cases per 1

 beneficiarie

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 beneficiary

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Payment pe

Length of st

Note: FF

Sc

Ad

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• In the

FFS 

the n

6-29. N

in

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es 

per FFS 

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er day 

tay (in days) 

FS (fee-for-servic

catter bed cases

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e first years 

beneficiary f

umber of ca

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umber o

ncreased

 

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474,417 4

13.1 

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ce). Numbers of 

s and spending a

of Medicare Pro

of the inpatie

fell, on avera

ases per FFS

A Data Book: H

of inpatie

d in 2010

2007

456,045 44

12.8

$106.2 $

$8,315 $

$698

13.0

cases and patie

re excluded, as a

ovider Analysis a

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age, 2.5 perc

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Health care spe

ent psych

0

2008 2

42,759 43

12.5

$109.1 $

$8,742 $

$728

13.1

nts reflect Medic

are cases and sp

nd Review data f

tric facility (IP

cent per yea

y increased 2

ending and the

hiatric fa

2009 2

1,276 447

12.1

110.3 $1

9,080 $9

$763 $

13.1

care FFS utilizatio

pending for bene

from CMS. 

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ar. Between 

2.4 percent.

e Medicare prog

acility ca

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 cha

010 2006–

7,897 –3

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115.6 1

9,288 4

$782 4

13.0 0

on of services fu

eficiaries enrolled

e number of

2009 and 2

gram, June 20

ases 

rage Ave

nual ann

ange cha

–2009 2009

3.1% 3

2.5 2

1.7 4

4.4 2

4.1 2

0.2 –0

urnished in IPFs. 

d in Medicare 

f IPF cases 

010, howeve

13 89

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nual 

ange 

–2010 

3.9% 

2.4 

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2.5 

0.7 

per 

er, 
90 Acute i

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Type of IPF

 

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Urban 

Rural 

Freestandin

Hospital-ba

Nonprofit 

For profit 

Governmen

Note: IP

sy

M

 

Source: M

• In 20

inpat

filing 

time, 

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numb

perce

inpatient servic

6-30. In

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ng 

ased units 

nt

PF (inpatient psyc

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edicare cost rep

edPAC analysis 

10, 441 free

ient-level ca

Medicare co

the number

owing share 

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ces

npatient 

TEFRA 

2004 2

1,657 1

1,278 1

378 

352 

1,305 1

 

949 

327 

381 

chiatric facility), T

gan a three-year 

orts in the given 

of Medicare cos

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are to Medica

ost reports h

r of freestand

of Medicare

ofit IPFs has

for for-profit

psychiat

2005 2006

,645 1,645

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360 373

366 395

,279 1,250

917 903

347 348

381 394

TEFRA (Tax Equ

phase-in of the I

fiscal year. 

st report files from

Fs and 1,14

are beneficia

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ding IPFs ha

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s fallen 2.8 p

t IPFs. 

tric facili

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6 2007

5 1,652

1 1,265

3 386

5 412

0 1,240

 

3 879

8 364

4 409

uity and Fiscal Re

IPF PPS on Janu

m CMS. 

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aries. Since 

, on average

as grown, on

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percent per y

ities, 200

PPS

2008

1,631

1,255

373

419

1,212

862

357

412

esponsibility Act 

uary 1, 2005. Nu

ased psychi

2004, the nu

e, about 2 pe

n average, a

 in for-profit 

year, on ave

04–2010 

2009 20

1,610 1,5

1,226 1,1

383 3

432 4

1,178 1,1

836 8

374 3

400 3

t of 1982), PPS (

umbers are facilit

iatric units p

umber of ps

ercent per y

almost 4 perc

facilities. Si

erage, comp

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an

cha

010 2004

581 –0

94 –1

385 0

441 3

40 –2

801 –2

383 2

397 0

prospective paym

ties that submitte

provided 

sychiatric uni

year. At the s

cent per yea

nce 2004, th

ared with a 2

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nual 

ange 

4–2010 

0.8% 

1.1 

0.3 

3.8 

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ment 

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its 

same 

ar. 

he 

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MS–DRG

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Note: IP

co

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in 20

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Nonpsychi

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PF (inpatient psyc

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care patient

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A

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except depres

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ug use—left A

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A (against medic

of Medicare Pro

s in IPFs are

ntly occurrin

hosis. In 201

ases, was de

A Data Book: H

nosis ac

ses in 20

system disord

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dependency, 

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dependency w

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pmental disord

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AMA

dependency w

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RGs 

MS–DRG (Medic

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10, the next 

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010 

ders without M

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no rehabilitat

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care severity–dia

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nd Review data f

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d for almo

MCC

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C

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bilitation, with 

llness

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from CMS. 

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MCC 

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MCC 

group), MCC (ma

chiatric MS–

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gram, June 20

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0.

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13 91

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7 
92 Acute i

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at lea

inpatient servic

6-32. C

ristic 

ligibility status

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nly 

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American 

c 

PF (inpatient psyc

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ut 28 percent

during the ye

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ajority of ben

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chiatric facility), E

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mon in older

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th of the yea

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sability. The

neficiary. 

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r patients, wh

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e beneficiari

ar. 

f IPF use

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total IPF 

41.4%

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0.1

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Ambulatory care

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Imaging services 

Chart 

Note: FF

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ag

Source: 20

• Phys

physi

diagn

physi

pract

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From

perce

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Part B

• Per c

spen

bene

20

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60

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1,80

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2,20

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Spending per beneficiary (dollars)

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fee

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disabled” exclude

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titioners, chir

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ent. 

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ding for age

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ing on physi

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d beneficiar

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d

abled

A Data Book: H

spending

ule servi

Medicare spendi

who qualify for M

aged category.

he Boards of Tru

professional

uding office v

ervices furni

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and physical

y for physici

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cian fee-sch

ver this time 

bled benefic

ries. In 2012

mpared with 

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Health care spe

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ng only and do n

edicare because

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ded by other

l therapists).

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per FFS ben

hedule servic

period. 

iaries (unde

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$2,247 for a

01

1

1,453

2006

ending and the

S benefi

02–2012

not include benef

e they have enddicare trust funds

 broad range

cal procedure

health care s

r health prof

.

edule service

neficiary on t

ces is one of

r age 65) is 

e, per capita

aged benefic

1,905

1,548

2008

e Medicare prog

iciary on

ficiary coinsuran

-stage renal dise

s. 

e of services

es, and a va

settings. In a

fessionals (e

es has increa

these servic

f several con

lower than p

a spending f

ciaries. 

2,040

1,755

2010

gram, June 20

n physici

ce. The category

ase. All beneficia

s in the Med

ariety of 

addition to 

e.g., nurse 

ased annual

ces grew 60

ntributions to

per capita 

for disabled 

2,247

5

1,9

2012

13 97

an 

y

aries 

dicare 

lly. 

o

938
98 Ambula

Chart 

Note: M

Source: 20

• From

by 72

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and t

incre

• Grow

spen

to inc

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0

10

20

30

40

50

60

70

80

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7-2. V

th

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013 Trustees' rep

m 2000 to 20

2 percent. 

spending gr

the MEI. Phy

ased 27 per

wth in the vol

ding than pa

crease physi

0.0

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2000 2001

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han inpu

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port and Office o

12, Medicare

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ming negative

ms began to

.7 -2.8 -3.

08 200

nding and the M

rofessio

5–2012

bility Physician P

3 percent of 

ow a cyclical

y high invest

aracterized b

2 and 2004 (

e in 2007 an

o rise slowly 

.2 -4.0 -3.

09 201

Medicare progr

nal liabi

Premium Survey. 

total payme

l pattern, alt

tment return

by declining 

(data not sho

nd remaining

in the secon

6

-2.1

-1.

10 201

ram, June 2013

lity 

nts under th

ernating 

s for insurer

investment 

own), premiu

g negative 

nd quarter o

2 -1.0

-0.2

11 201

3 105

he 

rs 

um 

of 

2

1.2

2
106 Ambu

Chart 

Note: PP

no

pa

 *E

Source: C

• Overa

unde

reach

avera

• In 200

includ

unde

spend

perce

• Bene

abou

0

5

10

15

20

25

30

35

40

45

50

Dollars (in billions)

ulatory care

7-10. S

u

PS (prospective 

ot include service

aid on a cost bas

Estimate. 

MS, Office of the

all spending

r the outpati

hing $43.5 b

aging 11.8 p

01, the first f

ding $12.1 bi

r the outpatie

ding; $9.5 bil

ent of total M

eficiary cost s

t 23 percent

12.3 1

8.0

2002 2

Benefi

Progra

pending

nder the

payment system

es paid on separ

sis (e.g., corneal 

e Actuary. 

g by Medicar

ient PPS fro

illion. The O

ercent per y

ull year of the

llion by the p

ent PPS is ex

llion beneficia

edicare spen

sharing unde

t in 2011. Ch

14.3 16.4

7.7

8.1

2003 2004

iciary cost sha

am payments

g on hosp

e outpatie

m). Spending amo

rate fee schedule

tissue acquisitio

re and benef

m calendar 

Office of the A

year from 20

e outpatient

program and 

xpected to ris

ary copayme

nding by the 

er the outpa

hart 7-14 pro

19.1 2

8.3

2005 2

aring

pital outp

ent PPS,

ounts are for serv

es (e.g., ambulan

n and flu vaccine

ficiaries on h

year 2002 to

Actuary proj

12 to 2014.

PPS, spendi

$8.0 billion i

se to $43.5 b

ents). The ou

program in 2

atient PPS is

ovides more 

20.3 21.9

7.8 8.0

2006 2007

patient s

, 2002–2

vices covered by

nce services and

es) or payments 

hospital outp

o 2012 incre

ects continu

ing under the

n beneficiary

billion in 2012

utpatient PPS

2012. 

s generally h

detail on co

23.6 2

7.8

2008 2

services 

012

y the Medicare o

d durable medica

for clinical labor

patient servic

eased by 112

ued growth in

e PPS was $

y cost sharin

2 ($34.1 billio

S accounted 

igher than fo

oinsurance. 

26.1 27.9

8.0

8.4

2009 2010

covered

outpatient PPS. T

al equipment) or t

ratory services. 

ces covered

2 percent, 

n total spend

$20.1 billion, 

g. Spending 

on program 

for about 6 

or other sect

31.3 3

9.1

2011 20

d

They do 

those 

d

ding, 

tors, 

34.1

9.5

012*
Chart 

Year 

2002 

2004 

2006 

2008 

2010 

2012 

Note: N/

ch

de

20

sh

al

Source: M

• The n

paym

the n

on a 

slowe

• The p

offeri

perce

2011

share

comp

7-11. M

Hospita

4,210

3,882

3,651

3,607

3,518

3,483

/A (not applicable

hart changed the

efinition makes it

012 but question

hort-term hospita

cohol/drug hosp

edicare Provider

number of ho

ment system 

umber of ho

cost basis. S

ed. 

percent of ho

ng outpatien

ent offering e

, CMS chan

e of hospitals

parable to pr

A 

Most hosp

als 

0

2

1

7

8

3

e). We list emerg

e variable for iden

t appear that the 

whether such a 

als and excludes 

itals. 

r of Services files

ospitals that

(PPS) sharp

ospitals conv

Since 2006, 

ospitals prov

nt surgery st

emergency s

ged the vari

s offering em

rior years. 

Data Book: He

pitals pr

Outpatient

services

94%

94

94

94

95

95

gency services fr

ntifying hospitals

percentage of h

large increase a

long-term, Chris

s from CMS. 

t furnish serv

ply declined

verting to crit

the decline 

viding outpat

teadily increa

services has

able on the 

mergency se

ealth care spen

rovide ou

Perc

Ou

s

rom 2002 throug

’ provision of em

ospitals providin

actually occurred

stian Science, ps

vices under 

from 2002 t

tical access 

in the numb

tient service

ased from 2

s remained f

Provider of 

ervices, so th

nding and the M

utpatient

cent offering

utpatient

surgery

84%

86

86

87

90

91

h 2010 as N/A b

mergency service

g emergency se

. This chart inclu

ychiatric, rehabil

Medicare’s o

through 2006

hospital sta

ber of outpat

es remained

002 through

fairly stable, 

Services file

he 2012 num

Medicare progr

t service

Emer

serv

N/A

N/A

N/A

N/A

N/A

93

because the data

s. We believe th

rvices increased

udes services pro

litation, children’s

outpatient p

6, largely du

atus, which a

tient PPS ho

stable and t

h 2012. We a

but we are n

e we use to c

mber is not p

ram, June 2013

es 

rgency 

vices 

A

A

A

A

A

3

a source we used

is change in vari

d sharply from 20

ovided or arrange

s, critical access

rospective 

ue to growth 

allows payme

ospitals has 

the percent 

also believe 

not certain. 

calculate the

precisely 

3 107

d in this 

iable 

010 to 

ed by 

s, and 

in 

ent 

the 

In 

e
108 Ambu

Chart 

Note: PP

in

im

dr

su

Source: M

• Hosp

emer

ambu

• The p

proce

• Proce

the g

servic

• In 20

Imagi

16%

Evaluation &

management

14%

ulatory care

7-12. 

Payme

PS (prospective 

clude hold-harm

maging, and tests

rugs and separat

um to 100 percen

edPAC analysis 

pitals provide

rgency and c

ulatory surge

payments fo

edures acco

edures (e.g.

reatest shar

ces (16 perc

11, separate

ng

%

&

t

Separately 

paid 

drugs/blood 

products

13%

Payme

Medica

service

ents

payment system

less payments to

s, according to th

tely paid drugs a

nt due to roundin

of the 5 percent

e many diffe

clinic visits, i

ery. 

r services a

unt for 52 pe

, endoscopie

re of paymen

cent) and ev

ely paid drug

Tests

4%

Pass

d

ents and

are hosp

e, 2011

m). Payments incl

o rural hospitals. 

he Berenson–Egg

nd blood produc

ng. 

 standard analyt

rent types of

maging and

re distributed

ercent of pay

es, surgeries

nts for servic

aluation and

gs and blood

s-through 

drugs

1%

Procedures

52%

 volume 

pital outp

lude both progra

Services are gro

gers Type of Ser

cts are classified 

ic file of outpatie

f services in

 other diagn

d differently 

yments but o

s, skin and m

ces (52 perc

d manageme

d products a

s

Separately p

drugs/blood

products

38%

of servi

patient P

am spending and

ouped into evalu

rvice classificatio

by their paymen

ent claims for 201

n their outpat

nostic service

than volume

only 19 perc

musculoskel

cent) in 2011

ent services 

accounted fo

Evaluation & 

management

17%

aid 

d

ces und

PPS, by ty

Volume

d beneficiary cost

uation and manag

on developed by 

nt status indicator

11. 

tient departm

es, laborato

e. For exam

cent of volum

letal procedu

1, followed b

(14 percent

or 13 percent

Tes

11%

er the 

ype of 

t sharing but do n

gement, procedu

CMS. Pass-thro

r. Percentages m

ments, includ

ry tests, and

mple, in 2011

me. 

ures) accoun

by imaging 

t). 

t of payment

sts

%

Pass-throu

drugs

2%

Proced

19

Imaging

14%

not 

ures, 

ugh 

may not 

ding 

d

, 

nt for 

ts. 

gh 

dures

%
Chart 

APC title 

Total 

All emerg

All clinic v

Diagnostic

Cataract p

Level I pla

Insertion o

Level II ex

Lower gas

Computed

Transcath

IMRT trea

Coronary 

Level II ca

Insertion/r

Level II ec

Transcath

Level I up

Level II la

CT and C

Level III n

Level III c

Computed

MRI and m

MRI and m

 without 

Insertion/r

 pacema

Average A

Note: AP

(c

ra

vis

 *D

Source: M

• Altho

expe

paym

7-13. H

M

ency visits 

visits 

c cardiac cath

procedures w

ain film excep

of cardioverte

xtended asse

strointestinal 

d tomography

heter placeme

atment deliver

or noncorona

ardiac imagin

replacement/

chocardiogram

heter placeme

pper gastrointe

paroscopy 

CTA with contr

nerve injection

cystourethrosc

d tomography

magnetic reso

magnetic reso

contrast follo

replacement/c

aker 

APC 

PC (ambulatory 

computed tomogr

ate for “All emerg

sits” is a weighte

Did not appear on

edPAC analysis 

ough the outp

nditures are

ment rates, o

A 

Hospital o

Medicare 

heterization 

with IOL insert

pt teeth 

er–defibrillator

ssment & ma

endoscopy 

y without cont

ent of intracor

ry 

ary angioplas

g 

repair of card

m without con

ent of intravas

estinal proced

rast composit

ns 

copy and othe

y with contras

onance angio

onance angio

owed by contr

conversion of

payment classific

raphy), CTA (com

ency visits” is a w

ed average of pay

n the list for 2010

of 5 percent ana

patient prosp

 concentrate

r both. 

Data Book: He

outpatien

expendi

t

r

anagement co

trast

ronary drug-e

ty and percut

dioverter–defib

ntrast

scular shunts

dures

te 

er genitourina

st* 

ography witho

ography 

rast

f permanent d

cation), IOL (intra

mputed tomograp

weighted averag

yment rates from

0. 

alytic files of outp

pective paym

ed in a hand

ealth care spen

nt servic

itures, 20

omposite

eluting stents

taneous valvu

brillator leads

ary procedure

out contrast m

dual chamber

aocular lens), IM

phy angiography

ge of payment rat

m 5 APCs. 

patient claims for

ment system

ful of catego

nding and the M

ces with 

011 

Share

payme

44

6

5

3

2

2

2

2

2

2

2

2

uloplasty 1

1

s 1

1

1

1

1

1

1

es 1

1

material 1

1

r 1

MRT (intensity-mo

y), MRI (magnetic

tes from 10 APC

r calendar year 2

m covers thou

ories that ha

Medicare progr

the high

e of Vol

ents (thous

4% 

6 11,5

5 20,1

3 4

2 5

2 16,3

2

2 1,0

2 1,1

2 3,2

2

2 1,3

1

7

 1,3

9

1

6

9

2

6

 1,1

6

3

odulated radiatio

c resonance ima

Cs, and the paym

2011. 

usands of se

ave high volu

ram, June 2013

hest 

ume Pay

sands) r

589 $

110 

486 2

514 1

323 

31 23

022 

116 

235 

87 7

315 

179 3

748 

21 26

359 

64 8

946 

139 3

691 

952 

275 1

645 

116 

645 

37 9

374 

on therapy), CT 

aging). The paym

ment rate for “All c

ervices, 

ume, high 

3 109

yment 

rate 

$188 

73 

2,726 

1,691 

45 

3,405 

714 

643 

195 

7,279 

438 

3,780 

760 

6,830 

402 

8,025 

612 

3,295 

629 

523 

1,814 

300 

343 

534 

9,484 

157 

ment 

clinic 
110 Ambu

Chart 

Note: Se

Be

bl

Source: M

• Befor

coins

while

than 

• In ad

Cons

• The c

relativ

and m

• In 20

0

5

10

15

20

25

30

35

E

Coinsurance rate (in percent)

ulatory care

7-14. M

o

ervices were gro

erenson–Eggers

ood products are

edPAC analysis 

re CMS beg

surance paym

e Medicare p

costs, coins

opting the o

sequently, be

coinsurance 

vely high rat

managemen

11, the aver

21

Evaluation and

management

Medicare 

utpatien

ouped into catego

s Type of Service

e classified by th

of the 5 percent

an using the

ments for ho

payments we

urance repre

utpatient PP

eneficiaries’ 

rate differs 

tes of coinsu

nt services, h

rage coinsur

28

d Imaging

coinsura

t service

ories of evaluatio

e classification de

eir payment stat

 standard analyt

e outpatient 

ospital outpa

ere based on

esented a la

PS, the Cong

share of tot

for each ser

urance—28 

have coinsur

rance rate w

23

Proced

Ty

ance rat

e, 2011 

on and managem

eveloped by CMS

us indicators. 

ic files of outpati

prospective 

atient service

n hospital co

arge share o

gress froze t

al payments

rvice. Some 

percent in 2

rance rates o

was about 23

ures T

ype of servic

es, by ty

ment, imaging, pr

S. Pass-through 

ent claims for 20

payment sy

es were base

osts. As hosp

of total paym

the dollar am

s will decline

services, su

011. Other s

of 21 percen

3 percent.

27

Tests Pa

ce

ype of ho

rocedures, and te

drugs and sepa

011. 

ystem (PPS)

ed on hospit

pital charges

ents over tim

mounts for co

e over time. 

uch as imagi

services, suc

nt. 

20

ass-through

drugs

S

ospital 

ests according to

rately paid drugs

, beneficiary

tal charges, 

s grew faste

me. 

oinsurance. 

ing, have 

ch as evalua

20

Separately pai

drugs/blood

products

o the 

s and 

y

er 

ation 

d

23 
Chart 

Hospital gr

All hospita

Urban 

Rural SCH

Rural <10

Other rura

Major teac

Other teac

Nonteach

Note: SC

Source: M

• Medic

Previ

Reco

unde

corrid

would

• Trans

rural 

“hold 

receiv

• Hosp

in rur

hospi

Howe

paym

by re

holdharm

• HoldPPS 

from 

Data 

7.8 p

contin

3.1 p

7-15. E

o

Nu

roup ho

als 

Hs 

00 beds 

al 

ching 

ching 

ing 

CH (sole commu

edPAC analysis 

care implem

ously, Medic

ognizing that 

r the earlier 

dors were de

d have receiv

sitional corrid

hospitals co

harmless.” Q

ved from the

pitals that qua

ral areas and

itals continue

ever, in 2006

ments to rura

ducing paym

harmless pa

less paymen

-harmless pa

payments fo

these policie

from 2010 a

ercent of the

nued to bene

ercent of the

A 

ffects of

n hospit

2009 

p

mber of ho

ospitals and 

3,159 

2,243 

383 

388 

145 

270 

712 

2,177 

unity hospital). Nu

of Medicare Cos

ented the ho

care paid for

some hospit

system, the 

esigned to m

ved under th

dor payment

ntinue to rec

Qualifying ho

e previous sy

alified for ho

d other small

ed to be elig

6, CMS imple

l SCHs by 7.

ments to all o

ayments for S

nts to all SCH

ayments and

or all hospita

es was 7.2 p

and 2011 ind

eir outpatient

efit from hold

eir total outpa

Data Book: He

f hold-ha

tals’ outp

Share of

payments

from

old harmless

SCH transfer

0.3%

–0.4

7.2

2.8

–0.4

–0.3

–0.2

0.8

umbers may not 

st Report files fro

ospital outpa

r hospital out

tals might re

Congress es

ake up part 

he old payme

ts expired for

ceive a speci

ospitals rece

ystem or the 

ld-harmless 

 rural hospita

ible for holdemented a p

.1 percent ab

other hospita

SCHs that ha

Hs in 2010 a

d the SCH tra

ls in 2009. H

ercent for ru

dicate transfe

t revenue in 

d-harmless p

atient payme

ealth care spen

armless a

patient re

2

Number

of

hospitals

3,126

2,231

365

 385

144

269

720

2,136

sum to totals du

om CMS. 

atient prospe

tpatient servi

eceive lower 

stablished tra

of the differe

ent system a

r most hospi

ial category 

eive the grea

actual outpa

payments in

als (100 or fe

-harmless pa

policy (the “S

bove the sta

ls by 0.4 per

ave 100 or fe

and 2011. 

ansfer repres

However, the

ural SCHs an

er and hold-h

2010 and 8.

payments in 

ents in both y

nding and the M

and SCH

evenue, 

010

Share of

payments

from

hold harmles

and SCH trans

0.4%

–0.3

7.8

3.1

–0.2

–0.3

0.0

1.0

ue to rounding. 

ective payme

ices on the b

payments u

ansitional co

ence betwee

and those un

itals at the e

of transitiona

ater of the pa

atient PPS p

n 2004 and 2

ewer beds). 

ayments, but

SCH transfer”

andard rates.

rcent. Finally

ewer beds in

sented 0.3 p

e percentage

nd 2.8 percen

harmless pay

1 percent in 

2010 and 20

years. 

Medicare progr

H transfe

2009–20

Number

ss of 

sfer hospitals

2,842

2,042

335

 337

127

234

659

1,948

ent system (P

basis of hosp

nder the out

orridor paym

en payments 

nder the new

nd of 2003. 

al corridor pa

ayments they

payments. 

2005 include

After 2005, 

t SCHs no lo

”) that increa

. This policy 

y, the Congre

n 2009 and e

percent of tot

e of total outp

nt for small r

yments to ru

2011. Smal

011. These p

ram, June 2013

er payme

011 

2011 

Share o

paymen

r from

hold harm

s and SCH tr

2 0.4

2 –0.3

5 8.1

7 3.1

7 –0.4

4 –0.3

9 0.0

8 1.1

PPS) in 2000

pital costs. 

tpatient PPS

ents. The 

that hospita

w outpatient P

However, so

ayments call

y would have

ed SCHs loca

small rural 

onger qualifie

ased outpatie

is budget ne

ess reestabl

extended hol

tal outpatient

patient paym

rural hospita

ural SCHs we

l rural hospit

payments we

3 111

ents 

of 

nts

mless 

ransfer 

4% 

3

1

1

4

3

0

1

0. 

 than 

als 

PPS. 

ome 

led 

e

ated 

ed. 

ent 

eutral 

ished 

ldt

ments 

ls. 

ere 

tals 

ere 
112 Ambu

Chart 

Source: M

• Hosp

inpat

• Medi

April 

emer

• The n

subst

to co

packa

0

5

10

15

20

25

30

35

40

45

Observation hours (millions)

ulatory care

7-16. N

20

edPAC analysis 

pitals use ob

ient care or 

care began 

1, 2002. Pre

rgency room

number of ob

tantially from

unt the total 

aged observ

23

2006

umber o

006–201

of Limited Data 

servation ca

sent home. 

providing se

eviously, the

m or clinic vis

bservation h

m about 23 m

number of o

vation hours 

27

2007

of observ

1 

Set claims for th

are to determ

eparate paym

e observation

sits that occu

hours (both p

million in 200

observation 

on Medicar

31

200

vation ho

he outpatient pros

mine whethe

ments to hos

n services w

ur with obser

packaged an

06 to 42 milli

hours becau

e claims. 

1

08 2

ours has

spective paymen

r a patient s

spitals for so

were package

rvation care.

nd separatel

ion in 2011. 

use hospital

36

2009

s increas

nt system, 2006–

should be ho

ome observa

ed into the p

.

y paid) has 

Before 2006

s were not r

39

2010

sed, 

–2011. 

ospitalized fo

ation service

payments for

increased 

6, it was diff

required to re

42

2011

or 

es on 

r the 

icult 

eport 
Chart 

Medicare p

 

Number of

 New cen

 Exiting ce

 

Net percen

of centers f

 

Percent of 

 For profit

 Nonprofit

 Urban 

 Rural 

Note: AS

fa

to

Source: M

• ASCs

stay. 

cover

• Total

from 

year 

paym

• The n

2005

certif

facilit

• The r

subst

pays 

the s

7-17. N

25

payments (billio

centers 

ters 

enters 

nt growth in num

from previous y

all centers tha

t

t

SC (ambulatory s

cility services. P

 rounding. 

edPAC analysis 

s are entities

To receive p

rage, which 

 Medicare p

2005 throug

during this p

ments per be

number of M

 through 201

ied facilities 

ties. 

relatively slo

tantial revisi

for ambulat

ignificant gro

A 

umber o

5 percen

ons of dollars) 

mber 

year 

t are: 

surgical center). 

ayments for 201

of Provider of Se

s that furnish

payments fro

specify mini

ayments for

gh 2012. Pay

period. Betw

neficiary gre

Medicare-cer

12. Each yea

entered the

ow growth in 

on of the AS

ory surgical 

owth in hosp

Data Book: He

of Medica

nt, 2005–

2005 2

$2.7

4,298 4

353

60

6.6%

96

4

91

9

Medicare payme

2 are preliminary

ervices files from

h only outpa

om Medicare

imum facility

r ASC servic

yments per f

ween 2011 an

ew by 3.6 pe

rtified ASCs 

ar from 2005

e market, wh

the number

SC payment 

services in 

pital employm

ealth care spen

are-certif

–2012 

2006 2007

$2.8 $2.9

4,530 4,798

324 345

92 77

5.4% 5.9

96 96

4 4

91 91

9 9

ents include prog

y and subject to c

m CMS, 2012. Pa

tient surgica

e, ASCs mu

y standards.

ces increase

fee-for-servi

nd 2012, tota

ercent. 

grew at an a

5 through 20

ile an avera

r of ASCs in 

system in 2

hospital outp

ment of phys

nding and the M

fied ASC

 2008

9 $3.1

8 5,001 

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S E C T I O N 

Post-acute care

Skilled nursing facilities 

Home health services 

Inpatient rehabilitation facilities 

Long-term care hospitals 

A Data Book: Health care spending and the Medicare program, June 2013 121

Chart 8-1. Number of post-acute care providers increased or 

remained stable in 2012 

 Average 

 annual 

 percent 

 change Percent 

 2004– change 

 2004 2005 2006 2007 2008 2009 2010 2011 2012 2011 2011–2012 

Home health 

 agencies 7,804 8,314 8,955 9,404 10,040 10,961 11,654 12,026 12,225 6.4% 1.7% 

 

Inpatient 

 rehabilitation 

 facilities 1,221 1,235 1,225 1,202 1,202 1,196 1,179 1,165 1,166 –0.7 0.1 

 

 

Long-term 

 care hospitals 353 388 392 402 496 427 438 437 437 3.6 0.0 

Skilled nursing 

 facilities 14,981 15,026 15,017 15,047 15,024 15,062 15,076 15,120 15,139 0.1 0.1 

Note: The skilled nursing facility count does not include swing beds. 

Source: MedPAC analysis of data from the Provider of Services files from CMS. 

• The number of home health agencies has increased substantially since 2004. The number 

of agencies increased by 199 in 2012. The growth in new agencies is concentrated in a few 

areas of the country. 

• In spite of a moratorium on new long-term care hospitals (LTCHs) beginning in October 

2007, the number of these facilities continued to grow through 2010. The number of LTCHs 

remained constant from 2011 to 2012. 

• The total number of skilled nursing facilities has increased slightly since 2004, and the mix 

of facilities continues to shift from hospital-based to freestanding facilities. In 2012, hospitalbased facilities made up 5 percent of all facilities, down from 10 percent in 2003. 
122 Post-acute care

Chart 8-2. Home health care and skilled nursing facilities have 

fueled growth in Medicare’s post-acute care 

expenditures 

26.7

32.8 34.3

37.7

42.1 43.5

48.5

51.7

55.6

58.0

61.9 62.1

12.1

14.8 15.0 16.7

18.6 19.6

22.4 24.1 25.7 27.1

31.3 30.4

8.0 9.6 10.1 10.8 12.6 13.0

15.4 16.9

18.8 19.4 18.4 18.6

4.5

5.8 6.2 6.5 6.4 6.3 6.1 5.9 6.0 6.1 6.6 7.0

2.0 2.6 3.0 3.7 4.4 4.6 4.7 4.8 5.1 5.4 5.6 6.0

0

10

20

30

40

50

60

70

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Dollars (in billions)

All post-acute care

Skilled nursing facilities

Home health agencies

Inpatient rehabilitation hospitals

Long-term care hospitals

Note: These numbers are program spending only and do not include beneficiary copayments. 

Source: CMS Office of the Actuary. 

• Increases in fee-for-service (FFS) spending on post-acute care have slowed in part due to 

expanded enrollment in managed care, whose spending is not included in this chart. 

• FFS spending on inpatient rehabilitation hospitals declined from 2005 through 2008, 

reflecting policies intended to ensure that patients who do not need this intensity of services 

are treated in less intensive settings. However, spending on inpatient rehabilitation hospitals 

has increased since 2009. 

• FFS spending on skilled nursing facilities increased sharply in 2011, reflecting CMS’s 

adjustment for the implementation of the new case-mix groups (resource utilization groups, 

version IV) beginning October 2010. Once CMS established that the adjustment it made 

was too large, it lowered the adjustment and spending dropped in 2012. 
A Data Book: Health care spending and the Medicare program, June 2013 123

Chart 8-3. A growing share of fee-for-service Medicare stays 

and payments go to freestanding skilled nursing 

facilities and for-profit facilities 

 Facilities Medicare-covered stays Medicare payments 

Type of SNF 2006 2011 2006 2011 2006 2011 

All SNFs 100% 100% 100% 100% 100% 100% 

Freestanding 92 95 89 93 94 97 

Hospital based 8 5 11 7 6 3 

Urban 67 71 79 81 81 84 

Rural 33 29 21 19 19 16 

For profit 68 70 67 72 73 76 

Nonprofit 26 25 29 25 24 21 

Government 5 5 4 3 3 3 

Note: SNF (skilled nursing facility). Totals may not sum to 100 percent due to rounding or missing information about facility 

characteristics. 

Source: MedPAC analysis of the Provider of Services and Medicare Provider Analysis and Review files, 2006 and 2011. 

• Freestanding SNFs made up 95 percent of facilities in 2011. 

• Freestanding SNFs treated 93 percent of Medicare-covered stays and accounted for 97 

percent of Medicare payments in 2011. 

• For-profit facilities made up 70 percent of facilities in 2011. Between 2006 and 2011, their 

share of Medicare-covered stays increased 5 percentage points (from 67 percent to 72 

percent) and their share of payments increased 3 percentage points. 

• Urban SNFs’ share of facilities, Medicare-covered stays, and payments increased between 

2006 and 2011. 
124 Post-acute care

Chart 8-4. SNF volume remained essentially unchanged 

between 2010 and 2011 

 Change 

 2006 2008 2010 2011 2010–2011 

 

Volume per 1,000 fee-for-service 

 beneficiaries 

Covered admissions 72 73 71.5 71.2 –0.3% 

Covered days 1,892 1,977 1,938 1,935 –0.2 

Covered days per admission 26.3 27.0 27.1 27.2 0.4 

Note: SNF (skilled nursing facility). Data include 50 states and the District of Columbia. 

Source: Calendar year data from CMS, Office of Information Services 

• Between 2010 and 2011, Medicare-covered admissions and days remained essentially 

unchanged, after declining slightly from 2008. Despite the modest declines, the covered 

days and covered days per admission were higher than in 2006. 
A Data Book: Health care spending and the Medicare program, June 2013 125

 Chart 8-5. Freestanding SNF Medicare margins have increased 

steadily since 2005 

Type of SNF 2005 2006 2007 2008 2009 2010 2011a

All 13.1% 13.3% 14.7% 16.6% 18.0% 18.5% 22% to 24% 

Urban 12.6 13.1 14.5 16.3 17.9 18.5 N/A 

Rural 15.2 14.3 15.5 18.0 18.7 18.4 N/A 

For profit 15.2 15.7 17.2 19.1 20.2 20.7 N/A 

Nonprofit 4.5 3.5 4.1 6.9 9.6 9.5 N/A 

Governmentb N/A N/A N/A N/A N/A N/A N/A 

Note: SNF (skilled nursing facility), N/A (not applicable). a Medicare margin for 2011 is estimated because Medicare cost reports were not available. The range is based on 

assumptions about days, revenues, and costs. 

b

 Government-owned providers operate in a different context from other providers, so their margins are not necessarily 

comparable. 

Source: MedPAC analysis of freestanding SNF cost reports. 

• We estimate the 2011 Medicare margin to be between 22 percent and 24 percent. Medicare 

cost reports were not available to calculate Medicare margins for 2011. 

• Although aggregate Medicare margins for freestanding SNFs have varied over the past 7 

years, they have exceeded 10 percent every year since 2001 (early years not shown). 

• Aggregate Medicare margins increased from 2009 to 2010 due to costs per day growing 

slower than payments per day. The growth in payments reflected the increased share of 

days classified into the highest paying resource utilization groups. 

• Examining the distribution of 2010 margins, one-half of freestanding SNFs had margins of 

18.9 percent or more (not shown). One-quarter had Medicare margins at or below 9 percent 

and one-quarter had margins of 26.9 percent or higher. 
126 Post-acute care

Chart 8-6. Comparison of beneficiaries who do and do not use 

skilled nursing facilities, 2010

 Percent of beneficiaries who: 

Characteristic Use SNF services Do not use SNF services

Sex 

Female 59% 54% 

Male 41 46 

Race/ethnicity 

White, non-Hispanic 85 79 

African American 10 9 

Hispanic 2 6 

Other 2 5 

Age (in years) 

<65 8 18 

65–74 20 45 

75–84 34 25 

85+ 39 12 

Self-reported health status 

Excellent or very good 13 43 

Good or fair 68 48 

Poor 19 8 

Limitations in ADLs 

No ADLs 26 69 

1–2 ADLs 25 19 

3–6 ADLs 49 12 

Education 

No high school diploma 32 23 

Completed high school 29 30 

Beyond high school 36 46 

Living arrangement 

In an institution 33 4 

Alone 28 29 

With a spouse 23 49 

Other 15 18 

Eligibility status 

Aged, no ESRD 82 89 

Aged with ESRD 1 3 

Disabled 17 7 

Dual eligible 33 17 

Note: SNF (skilled nursing facility), ADL (activity of daily living), ESRD (end-stage renal disease). Components may not sum to 

100 percent due to rounding. 

Source: MedPAC analysis of Medicare Current Beneficiary Survey 2010 cost and use files. 

• Beneficiaries who use SNF services are older, more frail, and more likely to report poor health 

status compared with other beneficiaries. 

• Beneficiaries who use SNF services are more likely to be disabled and dually eligible for 

Medicare and Medicaid. 
A Data Book: Health care spending and the Medicare program, June 2013 127

Chart 8-7. Comparison of users of skilled nursing facilities: 

Dual-eligible users and other users, 2011 

Characteristic Percent of dualeligible SNF users 

Percent of other 

SNF users 

Race/ethnicity 

White, non-Hispanic 72% 92% 

African American 18 6 

Hispanic 8 1 

Other 3 1 

 

Age (in years) 

<65 19 4 

85+ 28 39 

 

Married 20 39 

 

Falls since admission or prior assessment 23 16 

 

Mental illness 

Alzheimer’s disease 9 5 

Dementia 33 21 

Depression 46 33 

Psychosis 9 3 

Schizophrenia 5 1 

Note: SNF (skilled nursing facility). Components may not sum to 100 percent due to rounding. 

Source: Analysis of patient assessment data for fiscal year 2011. Kramer, A., R. Fish, and M. Min. 2013. Risk-adjusted quality 

measures for skilled nursing facilities in 2011. Report prepared for the Medicare Payment Advisory Commission. 

• Dual-eligible users of SNFs are younger, more likely to be minority, and less likely to be 

married compared with other SNF users. 

• Dual-eligible users of SNFs are more likely to have a mental illness or cognitive impairment 

compared with other SNF users. 
128 Post-acute care

Chart 8-8. Spending on home health care, 1997–2012 

8.4

9.6 10.1

11.4

12.8

14.0

15.6

16.9

18.8 19.2

18.4 18.6

0

5

10

15

20

25

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Dollars (in billions)

Source: MedPAC analysis of CMS Standard Analytic File, 2012. 

• In October 2000, the prospective payment system (PPS) replaced the previous Medicare 

 payment system. At the same time, eligibility for the benefit broadened slightly. 

• Home health care has risen rapidly under PPS. Spending rose by about 10 percent a year 

 between 2001 and 2009, but growth slowed beginning in 2010. 

• Spending dropped by about $800 million in 2011. This decline was attributable to two 

factors: The base rate for home health care declined and Medicare implemented fraud 

safeguards to reduce excessive spending for these services. These changes curbed total 

spending in 2011, even though the number of episodes provided did not change 

significantly. Spending increased slightly in 2012. 
A Data Book: Health care spending and the Medicare program, June 2013 129

Chart 8-9. Provision of home health care changed after the 

prospective payment system started 

 Percent change 

1997 2001 2011 1997–2001 2001–2011

Number of visits (in millions) 258 74 118 –71% 60% 

 

Visit type (percent of total) 

 Home health aide 48% 25% 15% 

 Skilled nursing 41 50 51 

 Therapy 10 24 33 

 Medical social services 1 1 1 

Visits per home health patient 73 33 36 –55 9 

 

Note: The prospective payment system began in October 2000. Totals may not sum to 100 percent due to rounding. 

 

Source: Home health Standard Analytic File; Health Care Financing Review, Medicare and Medicaid Statistical Supplement, 2002. 

• The types and amount of home health care services that beneficiaries receive have 

 changed. In 1997, home health aide services were the most frequently provided visit type, 

 and beneficiaries who used home health care received an average of 73 visits. 

• By 2001, total visits dropped by 72 percent, and average visits per user had dropped to 33. 

 The increase in visits per user between 2001 and 2011 reflects home health users 

 receiving more episodes. The mix of services changed as well, with skilled nursing 

 and therapy visits now accounting for over 80 percent of all services. Since the 

 prospective payment system was implemented, the number of users and episodes has risen 

 rapidly (see Chart 8-10). 
130 Post-acute care

Chart 8-10. Trends in provision of home health care 

 Average annual 

 percent change 

 2002 2006 2011 2002–2010 

 

Number of users (in millions) 2.5 3.2 3.4 3.5% 

 

Percent of beneficiaries who 

 used home health care 7.2% 8.4% 9.5% 3.1 

 

Episodes (in millions) 4.1 5.5 6.9 5.9 

Episodes per home health patient 1.6 1.8 2.0 2.2 

 

Visits per home health episode 18.4 18.4 17.2 -1.5 

Visits per home health patient 31 34 34 1.2 

 

Average payment per episode $2,335 $2,538 $2,691 1.5 

Source: MedPAC analysis of the home health Standard Analytic File. 

• Under the prospective payment system, in effect since 2000, the number of users and the 

 number of episodes have risen significantly. In 2011, 3.4 million beneficiaries used the 

 home health benefit. 

• The number of home health episodes increased rapidly from 2002 to 2011, though growth 

 has slowed in recent years. The number of beneficiaries using home health care has also 

 increased since 2002 but at a lower rate than the growth in episodes. 

• The number of visits per episode decreased in 2002 to 2011. However, this decline was 

offset by an increase in the average number of episodes per patient, which increased from 

1.6 in 2002 to 2.0 in 2011. Beneficiaries received fewer visits in an episode but had more 

60-day episodes of care. As a result, the average number of episodes per home health user 

increased from 31 visits per home health user in 2002 to 34 visits per home health user in 

2011. 
A Data Book: Health care spending and the Medicare program, June 2013 131

Chart 8-11. Medicare margins for freestanding home health 

agencies 

 Percent of 

 agencies 

 2010 2011 2011 

 

All 19.1% 14.8% 100%

Geography 

 Mostly urban 19.1 14.8 86 

 Mostly rural 19.4 15.3 14 

Type of control 

 For profit 20.3 15.7 87

 Nonprofit 15.1 12.2 13

Volume quintile 

First 10.2 6.6 20 

 Second 11.2 8.3 20 

 Third 13.5 10.1 20 

 Fourth 17.7 13.4 20 

 Fifth 22.0 17.4 20

Note: Agencies are characterized as urban or rural based on the residence of the majority of their patients. Agencies with outlier 

payments that exceeded 10 percent of Medicare revenues are excluded from the reported statistics. 

Source: MedPAC analysis of 2010–2011 Cost Report files. 

• In 2011, freestanding home health agencies (HHAs) (about 85 percent of all HHAs) had an 

aggregate margin of 14.8 percent. HHAs that served mostly urban patients in 2011 had an 

aggregate margin of 14.8 percent; those that served mostly rural patients had an aggregate 

margin of 15.3 percent. The 2011 margin is consistent with the historically high margins the 

home health industry has experienced under the prospective payment system. The margin 

from 2001 to 2010 averaged 17.7 percent, indicating that most agencies have been paid 

well in excess of their costs under prospective payment. 

• For-profit agencies in 2011 had an average margin of 15.7 percent, and nonprofit 

 agencies had an average margin of 12.2 percent. 

• Agencies that serve more patients have higher margins. The agencies in the lowest volume 

 quintile in 2011 have an aggregate margin of 6.6 percent, while those in the highest 

 quintile have an aggregate margin of 17.4 percent. 
132 Post-acute care

Chart 8-12. Most common types of inpatient rehabilitation 

facility cases, 2012 

Type of case Share of cases 

Stroke 19.5% 

Fracture of the lower extremity 13.2 

Neurological disorders 11.3 

Major joint replacement 10.1 

Debility 9.9 

Brain injury 7.7 

Other orthopedic 7.5 

Cardiac conditions 5.1 

Spinal cord injury 4.5 

Other 10.9 

Note: Other includes conditions such as amputations, major multiple trauma, and pain syndrome. Numbers may not sum to 100 

percent due to rounding. 

Source: MedPAC analysis of Inpatient Rehabilitation Facility–Patient Assessment Instrument data from CMS (January through 

June of 2012). 

• In 2012, the most frequent diagnosis for Medicare patients in inpatient rehabilitation facilities 

 (IRFs) was stroke, representing close to 20 percent of cases. 

• Major joint replacement cases represented 10 percent of IRF admissions in 2012, down 

 from 24 percent in 2004, when major joint replacement was the most common IRF Medicare 

 case type. 

• The share of cases represented by patients with neurological disorders has been steadily 

 increasing since 2004, while the share of major joint replacement cases has been steadily 

 decreasing. In 2012, the share of neurological disorders exceeded the share of major joint 

 replacement for the first time. 
A Data Book: Health care spending and the Medicare program, June 2013 133

Chart 8-13. Volume of IRF FFS patients increased in 2011 

 Average 

 annual percent Percent 

 change change 

 2004 2009 2010 2011 2004–2010 2010–2011 

Number of IRF cases 495,000 364,000 359,000 371,288 –5.2% 3.3%

 

Unique patients per 10,000 123.0 93.0 91.1 92.7 –4.9 1.8 

 FFS beneficiaries 

Payment per case $13,290 $16,552 $17,085 $17,398 4.3 1.8 

Medicare spending 

 (in billions) $6.58 $6.03 $6.14 $6.46 –1.1 5.2 

Average length of stay 

 (in days) 12.7 13.1 13.1 13.0 0.6 –0.8 

Note: IRF (inpatient rehabilitation facility), FFS (fee-for-service). Numbers of cases reflect Medicare FFS utilization only. 

Source: MedPAC analysis of MedPAR data from CMS. 

• IRF volume is measured by the number of IRF cases and the number of unique patients per 

 10,000 beneficiaries, which controls for changes in FFS enrollment. 

• IRF volume declined from 2004 through 2008, when enforcement of the compliance 

 threshold was renewed. After 2008, the volume decline began to level off after the 

 compliance threshold was permanently lowered to 60 percent. 

• Between 2010 and 2011, the number of cases grew by 3.3 percent. This growth was due to 

 an increase in both the number of unique beneficiaries receiving IRF care and an increase 

 in the number of beneficiaries with more than one IRF stay in a year. 

• While Medicare FFS spending on IRFs declined from 2004 through 2008, total Medicare 

 spending rose 5.2 percent from 2010 to 2011. 
134 Post-acute care

Chart 8-14. Overall IRFs’ payments per case have risen faster 

than costs since implementation of the PPS in 2002 

11.3

22.3

24.9

31.8

40.1

44.9

47.2 47.6

50.5

53.0

0.3

2.6

6.5

17.6

27.3

32.7

37.8 39.3

41.8 43.4

0

10

20

30

40

50

60

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Cumulative percent change

Payment per case

Cost per case

Note: IRF (inpatient rehabilitation facility), PPS (prospective payment system). Costs are not adjusted for changes in case mix. 

Source: MedPAC analysis of cost report data from CMS. 

• Since implementation of the PPS in 2002, overall Medicare payments per case have 

 cumulatively increased faster than costs per case, although in most years from 2004 

 through 2009 costs per case grew faster than payments. 

• Between 2010 and 2011, payments per case increased more than costs per case (2.5 

 percent payment growth compared with 1.6 percent cost growth). 

• These trends in Medicare per case payments and costs are reflected in IRFs’ Medicare 

 margins, shown in Chart 8-15. 
A Data Book: Health care spending and the Medicare program, June 2013 135

Chart 8-15. Inpatient rehabilitation facilities’ Medicare margin 

by type, 2002–2011 

 2002 2004 2006 2008 2009 2010 2011 

All IRFs 10.8% 16.7% 12.4% 9.5% 8.4% 8.7% 9.6% 

 

Hospital based 6.1 12.2 9.6 4.1 0.3 –0.3 –0.8 

Freestanding 18.5 24.7 17.5 18.2 20.3 21.4 22.9 

Urban 11.3 17.0 12.6 9.7 8.6 9.1 10.3 

Rural 5.9 13.9 10.6 7.6 6.3 5.4 5.7 

Nonprofit 6.5 12.8 10.7 5.6 2.3 2.0 2.0 

For profit 18.5 24.4 16.3 16.7 19.0 19.8 21.3 

 

Note: IRF (inpatient rehabilitation facility). 

Source: MedPAC analysis of cost report data from CMS. 

• Medicare margins increased rapidly during the first two years (2002–2004) of the IRF 

 prospective payment system (PPS) across all provider types. Aggregate margins rose from 

 just under 2 percent in 2001 to almost 17 percent in 2004. 

• From 2004 through 2009, margins declined each year, largely due to reductions in patient 

 volume through 2008 (resulting in fewer patients among whom to distribute fixed costs) and 

 a zero update to the base rates for half of 2008 and for all of 2009 that resulted in Medicare 

 payment rates remaining at 2007 levels. Margins rose in 2010 and 2011. 

• Between 2010 and 2011, aggregate margins increased from 8.7 percent to 9.6 percent. 

• Freestanding and for-profit IRFs had substantially higher aggregate Medicare margins than 

 hospital-based and nonprofit IRFs, continuing a trend that began with implementation of 

 the IRF PPS in 2002. 
136 Post-acute care

Chart 8-16. The top 25 MS–LTC–DRGs made up three-fifths of 

LTCH discharges in 2011 

MS-LTC– Change 

DRG Description Discharges Percentage 2008–2011 

207 Respiratory system diagnosis with ventilator support 96+ hours 16,101 11.5% 7.4% 

189 Pulmonary edema and respiratory failure 13,042 9.3 49.1 

871 Septicemia or severe sepsis without ventilator support 96+ hours 

 with MCC 8,453 6.0 30.4 

177 Respiratory infections & inflammations with MCC 4,997 3.6 15.1 

592 Skin ulcers with MCC 3,425 2.5 –14.5 

208 Respiratory system diagnosis with ventilator support <96 hours 3,029 2.2 21.8 

949 Aftercare with CC/MCC 3,004 2.1 –19.9 

190 Chronic obstructive pulmonary disease with MCC 2,769 2.0 8.2 

193 Simple pneumonia and pleurisy with MCC 2,573 1.8 –4.6 

539 Osteomyelitis with MCC 2,541 1.8 33.5 

573 Skin graft and/or debridement for skin ulcer or cellulitis with MCC 2,101 1.5 9.9 

314 Other circulatory system diagnosis with MCC 2,039 1.5 37.2 

919 Complications of treatment with MCC 2,033 1.5 22.5 

862 Postoperative and post-traumatic infections with MCC 2,008 1.4 20.1 

166 Other respiratory system OR procedures with MCC 1,988 1.4 17.4 

682 Renal failure with MCC 1,987 1.4 14.3 

 4 Tracheostomy with ventilator support 96+ hours or primary 1,887 1.4 33.5 

 diagnosis except face, mouth, and neck without major OR 

559 Aftercare, musculoskeletal system, and connective tissue with MCC 1,808 1.3 –7.0 

870 Septicemia or severe sepsis with ventilator support 96+ hours 1,774 1.3 64.6 

291 Heart failure and shock with MCC 1,713 1.2 1.5 

593 Skin ulcers with CC 1,615 1.2 –37.6 

178 Respiratory infections and inflammations with CC 1,591 1.1 –19.0 

603 Cellulitis without MCC 1,539 1.1 9.9 

602 Cellulitis with MCC 1,451 1.0 27.5 

560 Aftercare, musculoskeletal system, and connective tissue with CC 1,369 1.0 –17.3 

 

 Top 25 MS–LTC–DRGs 86,837 62.0 12.8 

 

 Total 139,741 100.0 6.8

Note: MS–LTC–DRG (Medicare severity–long-term care–diagnosis related group), LTCH (long-term care hospital), MCC (major 

complication or comorbidity), CC (complication or comorbidity), OR (operating room). MS–LTC–DRGs are the case-mix 

system for LTCHs. Columns may not sum due to rounding. 

Source: MedPAC analysis of Medicare Provider Analysis and Review data from CMS. 

 

• Cases in LTCHs are concentrated in a relatively small number of MS–LTC–DRGs. In 2011, 

 the top 25 MS–LTC–DRGs accounted for more than 60 percent of all cases. 

• The most frequent diagnosis in LTCHs in 2011 was respiratory system diagnosis with 

 ventilator support for more than 96 hours. Nine of the top 25 diagnoses, representing 34 

 percent of all cases, were respiratory conditions. 
A Data Book: Health care spending and the Medicare program, June 2013 137

Chart 8-17. LTCH spending per FFS beneficiary continues 

to rise 

Average annual change 

 2004− 2005– 2010−

 2004 2005 2006 2007 2008 2009 2010 2011 2005 2010 2011 

Cases 121,955 134,003 130,164 129,202 130,869 131,446 134,683 139,715 9.9% 0.1% 3.7% 

 

Cases per 10,000 33.4 36.4 36.0 36.2 36.9 37.0 37.4 38.5 9.0 0.6 2.8 

FFS beneficiaries 

 

Users 108,814 119,282 115,598 114,299 115,328 115,834 118,322 122,838 9.6 –0.2 3.8 

Spending (in billions) $3.7 $4.5 $4.5 $4.5 $4.6 $4.9 $5.2 $5.4 21.6 2.9 4.0 

Spending per $101.3 $122.2 $124.5 $126.1 $129.8 $138.0 $144.4 $148.8 20.7 3.4 3.1 

FFS beneficiary 

Payment per 

 case $30,059 $33,658 $34,859 $34,769 $35,200 $37,465 $38,582 $38,664 12.0 2.8 0.2 

 

Length of stay 

 (in days) 28.5 28.2 27.9 26.9 26.7 26.4 26.6 26.3 –1.1 –1.2 –1.0 

Note: LTCH (long-term care hospital), FFS (fee-for-service) 

Source: MedPAC analysis of Medicare Provider Analysis and Review data from CMS. 

• Between 2010 and 2011, the number of beneficiaries who had LTCH stays (users) 

 increased by 3.8 percent. 

• Controlling for the number of FFS beneficiaries, the number of LTCH cases rose 2.8 percent 

 between 2010 and 2011. 

• The average length of stay in LTCHs continues to decline at a rate of about 1 percent per 

 year. Since 2001, average length of stay has fallen 16 percent (not shown). 
138 Post-acute care

Chart 8-18. LTCHs’ per case payments continue to increase 

more than costs 

-4.0 -5.6

0.4

3.5

9.4

22.5

32.0

35.9 34.6 36.1

41.6

43.6 44.9

-2.1

-3.9

1.6

2.9 3.5

12.1

18.2

24.2

28.3

30.2

32.7 33.5 34.5

-10

0

10

20

30

40

50

1998-1999 2000-2001 2002-2003 2004-2005 2006-2007 2008-2009 2010-2011

Cumulative percent change

Payments per case

Cost per case

TEFRA PPS

Note: LTCH (long-term care hospital), TEFRA (Tax Equity and Fiscal Responsibility Act of 1982), PPS (prospective payment 

system). Percent changes are calculated based on consistent two-year cohorts of LTCHs. 

Source: MedPAC analysis of Medicare cost report data from CMS. 

• Payment per case increased rapidly after the PPS was implemented, climbing an average 

 16.6 percent per year between 2003 and 2005. Cost per case also increased rapidly during 

 this period, albeit at a somewhat slower pace. 

• Between 2005 and 2008, growth in cost per case outpaced that for payments, as regulatory 

 changes to Medicare’s payment policies for LTCHs slowed growth in payment per case to 

 an average of 1.5 percent per year. 

• Between 2008 and 2009, growth in payments per case accelerated to 5.5 percent, more 

 than twice as much as the growth in costs. This surge was due in part to legislation that 

 halted or rolled back the implementation of CMS regulations designed to address issues of 

 overpayments to LTCHs. 

• Between 2009 and 2011, growth in payments per case slowed to an average of 1.6 percent 

 per year, while growth in costs per case increased less than 1 percent per year. 
A Data Book: Health care spending and the Medicare program, June 2013 139

Chart 8-19. LTCHs’ aggregate Medicare margin rose in 2011 

 Share of 

Type of LTCH discharges 2004 2005 2006 2007 2008 2009 2010 2011 

 

All 100% 9.1% 11.9% 9.7% 4.6% 3.5% 5.6% 6.6% 6.9% 

Urban 95 9.3 12.0 9.9 4.9 3.8 5.9 6.9 7.1 

Rural 4 2.6 10.2 4.7 –0.4 –3.3 –3.0 –0.3 1.1 

Nonprofit 14 6.9 9.1 6.5 1.4 –2.5 –0.9 –0.2 –0.1

 

For profit 84 10.0 13.1 10.9 5.6 5.1 7.3 8.2 8.5 

Government 1 N/A N/A N/A N/A N/A N/A N/A N/A 

Note: LTCH (long-term care hospital), N/A (not available). Share of discharges column groupings may not sum to 100 percent 

due to rounding or missing data. Margins for government-owned providers are not shown. They operate in a different 

context from other providers, so their margins are not necessarily comparable. 

Source: MedPAC analysis of cost report data from CMS. 

• After implementation of the prospective payment system, LTCHs’ Medicare margins 

 increased rapidly for all LTCH provider types, climbing to 11.9 percent in 2005. Margins then 

 fell as growth in payments per case leveled off. In 2009, however, LTCH margins began to 

 increase again, reaching 6.9 percent in 2011. 

• Margins increased between 2010 and 2011 for all types of LTCHs. Financial performance in 

 2011 varied across LTCHs. The aggregate Medicare margin for for-profit LTCHs (which 

 accounted for 84 percent of all Medicare discharges from LTCHs) was 8.5 percent. Rural 

 LTCHs’ aggregate margin was 1.1 percent, compared with 7.1 percent for their urban 

 counterparts. Rural providers account for about 4 percent of LTCH discharges, caring for a 

 smaller volume of patients on average, which may result in poorer economies of scale. 
140 Post-acute care

Chart 8-20. LTCHs in the top quartile of Medicare margins in 

2011 had much lower costs 

 Top-margin Bottom-margin 

Characteristics quartile quartile 

 

Mean Medicare margin 20.6% –9.2% 

Mean total discharges (all payers) 553 428 

Medicare patient share 61% 63% 

Average length of stay (in days) 26 27 

Mean adjusted CMI 1.0057 0.9454 

Mean per discharge: 

Standardized costs $27,160 $36,849 

Medicare payment (excluding outlier payments) $38,960 $35,027 

High-cost outlier payment $1,134 $4,434 

Share of: 

Cases that are SSOs 27% 32%

Medicare cases from primary-referring ACH 39 44 

LTCHs that are for profit 92 62 

Note: LTCH (long-term care hospital), CMI (case-mix index), SSO (short-stay outlier), ACH (acute care hospital). Chart includes

only established LTCHs—those that filed valid cost reports in both 2010 and 2011. Top-margin quartile LTCHs were in the 

top 25 percent of the distribution of Medicare margins. Bottom-margin quartile LTCHs were in the bottom 25 percent of the 

distribution of Medicare margins. Standardized costs have been adjusted for differences in case mix and area wages. 

CMIs have been adjusted for differences in SSOs across facilities. The primary referring ACH is the one from which the 

LTCH receives a plurality of its patients. Government providers were excluded. 

Source: MedPAC analysis of LTCH cost reports and MedPAR data from CMS. 

• The top quartile of LTCHs had an aggregate Medicare margin of 20.6 percent, while the 

 bottom quartile had an aggregate Medicare margin of –9.2 percent. 

• Lower per discharge costs, rather than higher payments, drove the differences in financial 

 performance between LTCHs with the lowest and highest Medicare margins. Bottom- 

 margin LTCHs had standardized costs per discharge that were 36 percent higher than 

 top-margin LTCHs ($36,849 vs. $27,160). Low-margin LTCHs served fewer patients 

 overall and thus may have benefitted less from economies of scale. 

• High-cost outlier payments per discharge for bottom-margin LTCHs were almost four 

times those of top-margin LTCHs ($4,434 vs. $1,134). At the same time, SSOs made up a 

larger share of bottom-margin LTCHs’ cases. Bottom-margin LTCHs thus cared for 

disproportionate shares of patients who were high-cost outliers and patients who had 

shorter stays. 

• Compared with their bottom-margin counterparts, top-margin LTCHs were much 

 more likely to be for profit. 
A Data Book: Health care spending and the Medicare program, June 2013 141

Web links. Post-acute care 

Skilled nursing facilities 

• Chapter 8 of MedPAC’s March 2013 Report to the Congress provides information about the 

supply, quality, service use, and Medicare margins for skilled nursing facilities. 

http://www.medpac.gov/chapters/Mar13_Ch08.pdf 

• Chapter 7 of MedPAC’s June 2008 Report to the Congress provides information about 

alternative designs for Medicare’s prospective payment system that would more accurately pay 

providers for their skilled nursing facility services. 

 http://www.medpac.gov/chapters/Jun08_Ch07.pdf 

• Medicare payment basics: Skilled nursing facility payment system provides a description of how 

Medicare pays for skilled nursing facility care. 

 http://www.medpac.gov/documents/MedPAC_Payment_Basics_12_SNF.pdf 

• The official Medicare website provides information on skilled nursing facilities, including the 

payment system and other related issues. 

http://www.cms.gov/medicare/medicare-fee-for-service-payment/SNFPPS/ 

Home health services 

• Chapter 9 of MedPAC’s March 2013 Report to the Congress provides information on home 

health services. 

http://www.medpac.gov/chapters/Mar13_Ch09.pdf 

• Medicare payment basics: Home health care services payment system provides a description of 

how Medicare pays for home health care. 

 http://www.medpac.gov/documents/MedPAC_Payment_Basics_12_HHA.pdf 

• The official Medicare website provides information on the quality of home health care and 

additional information on new policies, statistics, and research as well as information on home 

health spending and use of services. 

 http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/index.html 

Inpatient rehabilitation facilities

• Chapter 10 of MedPAC’s March 2013 Report to the Congress provides information on inpatient 

rehabilitation facilities. 

 http://www.medpac.gov/chapters/Mar13_Ch10.pdf 
142 Post-acute care

• Medicare payment basics: Rehabilitation facilities (inpatient) payment system provides a 

description of how Medicare pays for inpatient rehabilitation facility services. 

 http://www.medpac.gov/documents/MedPAC_Payment_Basics_12_IRF.pdf 

• CMS provides information on the inpatient rehabilitation facility prospective payment system. 

http://www.cms.gov/medicare/medicare-fee-for-service-payment/InpatientRehabFacPPS/ 

Long-term care hospitals 

• Chapter 11 of MedPAC’s March 2013 Report to the Congress provides information on long-term 

care hospitals. 

http://www.medpac.gov/chapters/Mar13_Ch11.pdf 

• Medicare payment basics: Long-term care hospital services payment system provides a 

description of how Medicare pays for long-term care hospital services. 

 http://www.medpac.gov/documents/MedPAC_Payment_Basics_12_LTCH.pdf 

• CMS also provides information on long-term care hospitals, including the long-term care hospital 

 prospective payment system. 

 http://www.cms.gov//medicare/medicare-fee-for-service-payment/LongTermCareHospitalPPS/
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PPOs are av

emiums and

down from 3

heir Medicare

ate their enr

25

29

2

Regio

12 2013

th MA dr

ed provider organ

ans with no 

from 85 per

dvantage–P

for which the

e access to a

m) for the com

ed in the ben

PD HMOs av

ble to 38 per

vailable to 28

 Part D drug

30 percent of

e Part B pre

rollees’ Part 

8

9

37

28

onal PPO

rug 

nization), PFFS (

beneficiary 

cent to 94 

Prescription D

e enrollee pa

at least one 

mbined cove

nefit package

vailable. MA

rcent of 

8 percent of 

g coverage a

f beneficiarie

emium, but s

B premium 

86

94

90

Any MA plan

(private 

Drug 

ays 

MA–

erage 

e), 

A–PD 

are 

es in 

ome 

86

n
Chart 

Note: M

Source: M

• Medi

14.1 

throu

4.6 m

2

0

2

4

6

8

10

12

14

16

1

Beneficiaries (in millions) 

9-3. E

A (Medicare Adv

edicare manage

care enrollm

million enrol

ghout the 19

million enrolle

2.3

3.1

4.1

994 1995 1996

A 

nrollmen

vantage). 

ed care contract r

ment in MA p

llees (28 per

990s, peakin

ees in 2003.

5.2

6.1 6.

6 1997 1998 19

Data Book: He

nt in MA 

reports and mont

plans paid on

rcent of all M

ng at 6.4 mil

 MA enrollm

.4 6.3

5.5

99 2000 2001 2

ealth care spen

plans, 1

thly summary rep

n an at-risk c

Medicare ben

lion enrollee

ment has incr

4.9 4.6 4.7

2002 2003 200

nding and the M

994–201

ports, CMS. 

capitated ba

neficiaries). 

es in 1999, a

reased stead

7 4.9

6.9

8

04 2005 2006 2

Medicare progr

13 

asis is at an a

Enrollment 

and then dec

dily since 20

8.1

9.4

10.5

007 2008 2009

ram, June 2013

all-time high

rose rapidly 

clined to a lo

003. 

5

11.0

11.7

12

9 2010 2011 20

3 147

h at 

ow of 

2.8

14.1

012 2013
148 Medi

Chart 

Plan type 

Local CCP

Regional 

PFFS 

Note: CC

he

Source: C

• Enrol

PPOs

PFFS

10 pe

icare Advantag

9-4. C

F

Ps 

PPOs 

CP (coordinated

ealth maintenanc

MS health plan m

llment in loc

s grew by 14

S plans cont

ercent from F

ge 

Changes 

February 

2010 

8,534 

760 

1,657 

care plan), PPO

ce organizations 

monthly summary

al CCPs gre

4 percent aft

inued to dec

February 20

in enroll

Total

(in th

February

 2011

9,993

1,132

588

O (preferred prov

and local PPOs.

y reports. 

ew by 11 per

ter having co

cline. Combi

12 to Februa

lment va

 enrollees 

housands) 

Februa

2012

11,382

930

518

ider organization

.

rcent over th

ontracted the

ned enrollm

ary 2013. 

ary amon

ary Febr

2 20

2 12,5

0 1,0

8 4

n), PFFS (private

he past year

e previous y

ment in the th

ng major

ruary

013

580

060 

417

e fee-for-service)

. Enrollment

year, while e

hree types of

r plan typ

Percent chan

2012–201

11% 

14 

–19 

). Local CCPs inc

t in regional 

enrollment in

f plans grew

pes 

nge 

3 

clude 

n

w by 
Chart 

State 

 U.S. total 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticu

Delaware 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachus

Michigan 

Minnesota 

Mississippi

Missouri 

Montana 

Nebraska 

Nevada 

New Hamp

New Jerse

New Mexic

New York 

North Caro

North Dako

Ohio 

Oklahoma 

Oregon 

Pennsylvan

Puerto Rico

Rhode Isla

South Caro

South Dako

Tennessee

Texas 

Utah 

Vermont 

Virgin Islan

Virginia 

Washingto

Washingto

West Virgin

Wisconsin 

Wyoming 

Note: MA

se

Source: CM

9-5. M

p

M

ut 

setts 

i

pshire 

y 

co 

olina 

ota 

nia 

o

and 

olina 

ota 

e

nds 

n 

n, D.C. 

nia 

A (Medicare Adva

ervice). Cost plans

MS enrollment an

A 

MA and c

lan, 2013

Medicare eligibles

(in thousands) 

 50,674 

 902 

 72 

 1,006 

 563 

 5,140 

 693 

 599 

 162 

 3,611 

 1,364 

 223 

 251 

 1,949 

 1,072 

 541 

 457 

 811 

 734 

 285 

 851 

 1,132 

 1,770 

 841 

 527 

 1,064 

 183 

 293 

 394 

 239 

 1,409 

 339 

 3,159 

 1,613 

 112 

 2,015 

 638 

 674 

 2,397 

 709 

 192 

 846 

 144 

 1,139 

 3,282 

 309 

 121 

 9 

 1,237 

 1,062 

 83 

 399 

 972 

 87 

antage), HMO (he

s are not MA plan

d population data

Data Book: He

ost plan

3

s 

HMO 

19%

 14 

 0 

 35 

 8 

 36 

 28 

 19 

 5 

 26 

 7 

 17 

 9 

 6 

 2 

 6 

 5 

 3 

 23 

 10 

 3 

 15 

 12 

 16 

 6 

 16 

 0 

 6 

 29 

 1 

 14 

 19 

 25 

 12 

 0 

 16 

 11 

 22 

 23 

 66 

 33 

 5 

 0 

 23 

 16 

 23 

 0 

 1 

 5 

 23 

 2 

 2 

 17 

 0 

ealth maintenance

s; they submit cos

a, 2013. 

ealth care spen

 enrollm

Distribution

Local PPO 

6%

 7 

 0 

 2 

 3 

 1 

 3 

 3 

 2 

 2 

 12 

 14 

 20 

 4 

 13 

 6 

 6 

 13 

 1 

 7 

 2 

 2 

 14 

 5 

 3 

 5 

 12 

 3 

 3 

 2 

 1 

 10 

 6 

 4 

 2 

 16 

 4 

 21 

 15 

 6 

 1 

 7 

 6 

 6 

 7 

 10 

 1 

 0 

 4 

 6 

 2 

 8 

 10 

 1 

e organization), PP

st reports rather th

nding and the M

ment by s

 (in percent) of e

Regional PPO

2%

 2 

 0 

 1 

 3 

 0 

 0 

 1 

 0 

 9 

 5 

 14 

 0 

 0 

 5 

 0 

 0 

 6 

 2 

 0 

 0 

 1 

 2 

 0 

 2 

 2 

 0 

 0 

 0 

 0 

 0 

 0 

 2 

 2 

 0 

 4 

 0 

 0 

 0 

 0 

 1 

 6 

 0 

 1 

 3 

 0 

 1 

 0 

 2 

 0 

 0 

 10 

 1 

 0 

PO (preferred pro

han bids to CMS. 

Medicare progr

state and

enrollees by plan

PFFS 

1% 

 0 

 0 

 1 

 5 

 0 

 1 

 0 

 0 

 0 

 2 

 0 

 1 

 0 

 1 

 0 

 2 

 1 

 1 

 0 

 0 

 0 

 1 

 0 

 1 

 2 

 4 

 3 

 1 

 2 

 0 

 1 

 1 

 2 

 1 

 0 

 1 

 0 

 1 

 0 

 0 

 2 

 1 

 0 

 1 

 0 

 5 

 - 

 3 

 0 

 0 

 2 

 2 

 2 

ovider organization

Totals may not s

ram, June 2013

d type of 

n type 

Cost To

1% 2

 0 2

 0 

 0 3

 0 1

 0 3

 4 3

 0 2

 0 

 0 3

 0 2

 2 4

 0 3

 0 1

 0 2

 2 1

 0 1

 1 2

 0 2

 0 1

 3 

 0 1

 0 2

 28 5

 0 1

 0 2

 0 1

 1 1

 0 3

 0 

 0 1

 0 2

 0 3

 0 2

 10 1

 1 3

 0 1

 0 4

 0 3

 0 7

 0 3

 0 2

 7 1

 0 3

 1 2

 1 3

 0 

 0 

 2 1

 0 2

 7 1

 3 2

 4 3

 1 

n), PFFS (private 

um due to roundin

3 149

otal 

29%

23 

 0 

39 

18 

38 

36 

23 

 7 

37 

26 

46 

31 

11 

21 

14 

13 

23 

27 

18 

 9 

18 

27 

50 

13 

25 

15 

13 

33 

 5 

16 

29 

34 

21 

13 

38 

17 

43 

39 

72 

36 

20 

14 

30 

28 

34 

 7 

 1 

15 

29 

11 

24 

34 

 4 

fee-forng. 
150 Medi

Chart 

Benchma

Bids/FFS

Payments

 

Note: M

or

Source: M

• Since

to offe

separ

paym

• The b

formu

perce

• If a pl

Medic

bid is

perce

on the

perce

to its 

• We e

enroll

enroll

• Plans

bid an

97 pe

for les

• We p

will de

to me

• The r

region

while 

respe

icare Advantag

9-6. MA

pa

rks/FFS

s/FFS

A (Medicare Adv

rganization), PFF

edPAC analysis 

e 2006, plan 

er Part A and

rately). The b

ment for a priv

benchmark is

ula, being pha

entages (rang

lan’s bid is a

care, and en

 below the be

entage of the

e plan’s qual

ent. (In 2011,

enrollees in 

stimate that 

lment. The ra

lment from d

s’ enrollmentn average of 

ercent of FFS

ss than FFS 

roject that 20

ecline over th

eet requireme

ratio of paym

nal PPO pay

payments to

ectively. 

ge 

A plan b

ayments 

All plan

 110% 

96 

104 

vantage), FFS (fe

FS (private fee-fo

of plan bid data 

bids have pa

d Part B cove

bid includes p

vate plan on 

s an administ

ased in by 20

ging from 95%

bove the ben

rollees have 

enchmark, th

 difference b

ity rating and

 all plan reba

the form of s

MA benchma

atio varies by

ifferent types

-weighted bid

92 percent o

S spending. T

in the areas 

013 MA paym

he next few y

ents under th

ents relative 

yments are es

o PFFS and l

enchma

relative 

ns HMO

 110%

92

 103

ee-for-service), H

or-service). 

from CMS, Octo

artially determ

erage to Med

plan adminis

the relations

tratively dete

017, for calcu

% to 115%) o

nchmark, the

to pay an ad

he plan recei

between the p

d is phased i

ates were se

supplemental

arks average

y plan type, b

s of areas. 

ds average 9

of FFS spend

These numbe

where they b

ments will be

years as ben

he Patient Pro

to FFS spen

stimated to b

ocal PPOs w

rks, bids

to FFS s

Os Loca

% 1

10

10

HMO (health mai

ober 2012. 

mined the Me

dicare benefic

trative cost a

hip between 

ermined biddi

ulating bench

of each coun

en the plan re

dditional prem

ves its bid, p

plan’s bid and

n so that in 2

t at 75 perce

l benefits, low

e 110 percen

because diffe

96 percent of

ding, while bi

ers suggest t

bid, while mo

104 percent

chmarks are

otection and 

nding varies b

be 103 perce

will average 1

s, and Me

spending

al PPOs

11%

07

08

intenance organ

edicare paym

ciaries (Part 

and profit. CM

its bid and it

ing target. Le

hmarks in ea

nty’s per capi

eceives the b

mium that eq

plus a “rebate

d its benchm

2014 it will ra

ent.) The plan

wer cost sha

nt of FFS spe

erent types of

f FFS spendi

ids from othe

that HMOs ca

ost other plan

t of FFS spen

e gradually re

Affordable C

by the type o

nt and 102 p

107 percent a

edicare p

g, 2013 

Regional PP

 106%

97 

102 

ization), PPO (pr

ments they re

D coverage 

MS bases the

ts applicable

egislation est

ach county, b

ita Medicare 

benchmark as

uals the diffe

e,” defined by

mark. The per

ange from 50 

n must then r

ring, or lowe

ending when 

f plans tend 

ng. We estim

er plan types

an provide th

n types tend 

nding. It is lik

educed relativ

Care Act of 2

of MA plan. H

percent of FF

and 108 perc

program

POs PFF

% 11

10

10

referred provider

eceive. Plans

is bid 

e Medicare 

 benchmark.

tablished the

based on 

spending. 

s payment fro

erence. If a p

y law as a 

rcentage is b

percent to 7

return the reb

r premiums.

weighted by 

to draw 

mate that HM

 average at l

he same serv

to charge mo

kely this num

ve to FFS lev

2010. 

HMOs and 

FS, respective

cent of FFS, 

m

FS 

0% 

05 

07 

r

 bid 

e

om 

plan’s 

based 

70 

bate 

MA 

MOs 

least 

vices 

ore. 

mber 

vels 

ely, 
Chart 

Note: M

Source: C

• While

some

their 

are u

union

• As of

perce

• Our a

highe

plans

an av

show

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Enrollment (in millions)

9-7. E

A (Medicare Adv

MS enrollment d

e most MA p

e MA plans a

former empl

sually offere

ns rather tha

f February 2

ent of all MA

analysis of M

er relative to 

s appear to b

verage of 10

wn in Chart 9

0.96

May-06

A 

nrollmen

vantage). 

ata. 

plans are ava

are available

loyer or unio

ed through in

an to individu

013, about 2

A enrollees. 

MA bid data s

fee-for-serv

be less effici

06 percent of

9-7). 

1.30

Nov-07

Data Book: He

nt in emp

ailable to an

e only to retir

on. These pla

nsurers and 

ual beneficia

2.5 million en

shows that e

vice (FFS) sp

ent than ind

f FFS, comp

1.56

Feb-08

ealth care spen

ployer gr

y Medicare 

rees whose 

ans are calle

are markete

aries. 

nrollees wer

employer gro

pending than

dividual mark

pared with 94

1.83

Feb-09 F

nding and the M

roup MA

beneficiary r

Medicare co

ed employer

ed to groups

re in employ

oup plans on

n individual 

ket MA plans

4 percent of 

1.92 2

Feb-10 Fe

Medicare progr

A plans, 2

residing in a

overage is s

r group plan

s formed by e

yer group pla

n average h

plans, mean

s. Employer 

FFS for ind

2.08

2

eb-11 Feb

ram, June 2013

2006–201

a given area,

supplemente

s. Such plan

employers o

ans, or abou

ave bids tha

ning that gro

group plans

ividual plans

.32

2.5

b-12 Feb

3 151

13 

,

ed by 

ns 

or 

t 18 

at are 

oup 

s bid 

s (not 

53

b-13
152 Medi

Chart 

Source: CM

• The C

type 

provid

to ex

• SNPs

requi

Impro

Care 

SNP 

• CMS

entitle

have 

who r

• Enrol

• Enrol

• Enrol

the s

20

40

60

80

1,00

1,20

1,40

1,60

Number of special needs plan enrollees

(in thousands)

icare Advantag

9-8. N

MS special need

Congress cr

in the Medic

de a commo

pand benefi

s were origin

rements, by

ovements fo

Act of 2010

authority wi

 approves th

ed to Medica

certain chro

reside in ins

llment in dua

llment in chr

llment in ins

ame as in 20

670

93

14

0

00

00

00

00

00

00

00

00

2007

ge 

umber o

s plans comprehe

eated specia

care Prescrip

on framewor

ciaries’ acce

nally authoriz

y the Medica

r Patients an

0; and the Ta

ll expire at th

hree types o

are and Med

onic or disab

titutions or a

al eligible SN

ronic conditio

titutional SN

012. 

829

180 43 1

2008

Dua

of specia

ensive reports, M

al needs pla

ption Drug, I

rk for the exi

ess to and ch

zed for five y

re, Medicaid

nd Providers

axpayer Reli

he end of 20

of SNPs: dua

dicaid, chron

bling conditio

are nursing h

NPs has gro

on SNPs ha

NPs has decl

918

265

36 1

2009

al eligible C

al needs 

May 2007, April 20

ans (SNPs) a

mprovemen

sting plans s

hoice among

years. SNP 

d, and SCHI

s Act of 2008

ef Act of 201

015. 

al eligible SN

nic condition

ons, and inst

home certifie

wn continuo

s fluctuated 

lined steadily

967

214

119

9 2010

hronic condit

plan enr

008–2013. 

as a new Me

nt, and Mode

serving spec

g MA plans.

authority wa

P Extension

8; the Patien

12. Absent f

NPs enroll on

 SNPs enrol

titutional SN

ed. 

ously and is 

as plan req

y, although 

1,069

170

98

0 2011

ion Institutio

rollees, 2

edicare Adva

ernization Ac

cial needs b

as extended

n Act of 2007

nt Protection

further congr

nly beneficia

ll only benef

NPs enroll on

about 1.4 m

uirements h

enrollment i

1,188

0 201

80

1 201

onal

2007–201

antage (MA)

ct of 2003 to

eneficiaries 

, subject to n

7; the Medica

n and Afforda

ressional ac

aries dually 

ficiaries who

nly beneficia

million in 2013

ave change

n 2013 is ab

1,380

1

266

47

2 201

13 

) plan 

o

and 

new 

are 

able 

ction, 

o

ries 

3. 

d. 

bout 

6

49

13
Chart 

Note: SN

Source: C

• The n

of SN

• In 20

bene

institu

• Enrol

April 

• The a

serve

bene

institu

bene

0

100

200

300

400

500

600

700

Number of SNPs

9-9. N

to

NP (special need

MS special need

number of S

NP enrollees

13, most SN

ficiaries with

utions (or re

llment in SN

2013. 

availability o

ed. In 2013, 

ficiaries (up 

utionalized b

ficiaries with

322

70

115

April 2

Chronic o

Institution

Dual eligib

A 

umber o

o 2013 

ds plan). 

ds plans compreh

NPs increas

s increased b

NPs (56 perc

h chronic con

side in the c

Ps has grow

f SNPs has 

82 percent o

from 78 per

beneficiaries

h chronic con

2

5

2012

or disabling co

nal

ble

Data Book: He

of SNPs a

hensive reports, 

sed by 27 pe

by 18 percen

cent) are for 

nditions, and

community b

wn from 0.9 

increased a

of beneficiar

rcent in 2012

s (up from 41

nditions (up

362

68

214

April 2013

ondition

ealth care spen

and SNP

April 2012 and 2

ercent from A

nt. 

dual-eligible

d 11 percent

but have a si

million in Ma

and varies by

ries reside in

2), 46 perce

1 percent), a

from 45 per

20

40

60

80

1,00

1,20

1,40

1,60

1,80

SNP enrollment (in thousands)

nding and the M

P enrollm

2013. 

April 2012 to

e beneficiari

t are for ben

milar level o

ay 2007 (not

y type of spe

n areas wher

nt live where

and 56 perce

rcent). 

1,

2

0

00

00

00

00

00

00

00

00

00

April

Chronic o

Institution

Dual elig

Medicare progr

ment rose

o April 2013,

es, while 33

neficiaries wh

of need). 

t shown) to 1

ecial needs p

re SNPs ser

e SNPs serv

ent live wher

188

47

49 201

l 2012

or disabling c

nal

ible

ram, June 2013

e from 20

, and the nu

3 percent are

ho reside in 

1.7 million in

population 

rve dual-elig

ve 

re SNPs ser

1,380

266

April 2013

condition

3 153

012 

mber 

e for 

n

gible 

rve 
154 Medi

Chart 

Condition

Diabetes 

Breast, pr

Diabetes 

Diabetes 

CHF 

Major dep

Rheumato

Vascular d

COPD 

Specified 

Angina pe

Polyneuro

Diabetes 

Renal fail

Diabetes 

 plus pol

Diabetes 

 plus pol

Lymphatic

Breast, pr

 without 

Diabetes 

Septicem

Note: M

ob

Source: M

• CMS 

paym

the nu

condi

• The C

of the

• The f

comm

icare Advantag

9-10. Tw

M

20

s (defined by 

without comp

rostate, colore

with renal or 

with neurolog

pressive, bipo

oid arthritis 

disease 

heart arrhyth

ectoris/old my

opathy 

with ophthalm

ure 

with renal or 

lyneuropathy 

with neurolog

lyneuropathy 

c, head and n

rostate, colore

complication 

without comp

ia/shock 

A (Medicare Adv

bstructive pulmon

edPAC analysis 

uses the CM

ments to MA p

umber and s

tions that are

CMS–HCC m

e 70 HCCs re

ive diabetes 

mon condition

ge 

wenty m

MA benef

011 

HCC) 

plications 

ectal, and oth

peripheral cir

gic or other sp

olar, and para

hmias 

yocardial infar

mologic or uns

peripheral cir

gic or other sp

neck, brain, an

ectal, and oth

plication plus C

vantage), HCC (h

nary disease). 

of Medicare data

MS–hierarchic

plans, so that

everity of the

e collected in

model include

epresent diab

HCCs are am

ns are CHF, 

most com

ficiaries, 

her cancers 

rculatory man

pecified manif

noid disorder

rction

specified man

rculatory man

pecified manif

nd other majo

her cancers pl

CHF

hierarchical cond

a files from Acum

cal condition

t payments b

eir clinical co

nto HCCs to a

es 70 HCCs, 

betes catego

mong 7 of th

mental disor

mmon con

defined 

ifestation

festation

rs 

nifestation

ifestation 

festation 

or cancers

lus diabetes

dition category), C

men, LLC. 

 categories (

better reflect 

nditions. The

adjust the ca

which repres

ries that vary

e 20 most co

rders, and rhe

ndition c

in the C

CHF (congestive

(CMS–HCC)

the clinical n

e CMS–HCC

apitated paym

sent a broad

y by severity

ommon HCC

eumatoid art

categorie

CMS–HCC

Percen

beneficia

12.8%

6.7 

5.1 

3.4 

2.9 

2.8 

2.6 

2.4 

2.4 

2.3 

1.6 

1.5 

1.5 

1.4 

1.3 

1.3 

1.2 

1.1 

1.1 

1.0 

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ficiaries. 

A 

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ries by categ

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dicare Advantage

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a significant 

e enrolled in 

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private p

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gibility 

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eficiaries eligible 

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y 2011, dual-eligib

e plans as well a

nator file. 

more likely t

percent of du

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increase ove

plans compa

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remiums onl

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percent of 

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s) 

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neficiary), SLMB

for Medicare and

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levels of Med

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ual eligibility—

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grams that inc

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beneficiaries. 

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the average 

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category

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nd 74 percen

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ars. In 2004, 

percent of no

cent) are und

iciaries under

nt vs. 27 perc

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ercent and 20

—that is, thos

t sharing) as 

ss likely to en

bility categor

clude drug c

for services. 

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m. SLMB-only

cent, respect

rate (25 perc

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patterns b

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2 

4 

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7 

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ncome beneficia

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of the inability to 

o Rico enrolled 2

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coverage th

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enrollment am

only 1 perce

on–dual-eligi

der the age o

r age 65 are 

cent (not sho

igibles under

0 percent, re

se who have 

well as cove

nroll in Medic

ries consist o

overage as w

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s with partial

MB program) 

y and QI ben

tively) than a

cent) across 

ram, June 2013

by age a

nuary 20

Percent of 

category in pla

25%

27 

18 

26 

27 

20 

19 

23 

14 

16 

23 

34 

39 

ary), QI (qualified

text for an explan

determine speci

239,000 beneficia

add to 100 due to

rough the 

al-eligible 

mong the dua

ent of dual-el

ble beneficia

of 65 and ther

less likely tha

own in chart))

r age 65 show

spectively. 

 coverage fo

erage for serv

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well as certai

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156 Medi

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Plans and 

enrollment

All plan typ

Number of

Enrollment

thousands)

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HMOs

Number of

Enrollment

As perce

HMO enr

Local PPOs

Number of

Enrollment

As perce

local PPO

enrollees

Regional PP

Number of

Enrollment

As perce

regional 

enrollees

PFFS

Number of

Enrollment

As perce

PFFS en

Note: M

av

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plans 0

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everal options wi

cluded in the dat

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s. There are 

are too new 

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verall sta

5 4.5 

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of CMS star rati

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126 plans, w

to be rated 

xt page) 

on of MA

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4 

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1,271 

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health maintena

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measures of 

mance on Pa

ng across al

with 365,000

or there is in

A plans a

gs, Febru

ar rating: Nu

3.5 

131 

5,310 2

38% 

80 

3,123 1

32% 

45 

1,529 

50% 

2 

439 

41% 

4 

219 

53% 

nce organization

poses of this table

t are also referre

percent due to r

ent data, 2013.

easure of cli

a plan's adm

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l plans is 3.4

0 enrollees, t

nsufficient in

and enro

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umber of star

3 2

127 6

2,863 69

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79 4

1,804 54

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346 8

11% 3

8 0

598 N

56% N

5 4

115 6

28% 1

n). PPO (preferre

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ed to as “plans.” C

rounding; enrollm

inical proces

ministrative p

res and Part

44, or 3.70 o

that do not h

nformation o

ollment b

3 

rs 

2.5 2 

60 2 

96 18 

5% 0%

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42 4 

6% 0%

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ment totals are ro

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have a star r

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by CMS 

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rating

44

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% 100

29

9,61

% 100

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1

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1

41

% 100

nization), N/A (no

ch can consist of 

d HMO plans are

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47 

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36 percent o

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4.5, wherea

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of local PPO 

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measures re

n 2012 and 4

Data Book: He

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e for which th

plans have 5

as the highes

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2013 are bas

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st rating for 

but most reg

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lment would

42 percent o

would be in 

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mparable. Be

pproach was

C and Part D

n 2011. 

nding and the M

and enro

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2012, plans 

rease in thei

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d have been

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ith durable medic

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facilities. 

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ual rate of a

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ned by more

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either signed

ored plans u

g coverage t

called credita

percent of e

ing.) 

 Part D’s low

ent of all Me

percent of al

21 percent o

vate Medica

ed for nearly 

IS enrollees in 

PDPs

21%

enrollees in PDP

18%

ees in 

Medicare progr

dicare be

ad other

age–Prescription

hat of the basic P

2011. 

d up for Part

under Medic

to its retirees

able coverag

each eligible

w-income su

edicare bene

ll Medicare b

of all Medica

re health pla

15 percent.

Ps

P

3

ram, June 2013

eneficiari

r sources

n Drug [plan]), R

Part D benefit. 

t D plans or 

are’s RDS in

s with a ben

ge), Medica

e individual’s

ubsidy (LIS).

eficiaries) are

beneficiaries

are beneficia

ans. Individu

PDPs

39%

3 163

ies 

s of 

DS 

had 

n

efit 

re 

s

e

s) are 

aries. 

uals 
164 Presc

Chart 

• Othe

affect

includ

Affair

• Abou

gene

cription drugs

10-3. In

w

cr

r Medicare b

t Medicare p

de the Fede

rs, and empl

ut 12 percent

rous than Pa

n 2011, a

were enro

reditable

beneficiaries

program spe

ral Employe

loyers not re

t of Medicare

art D’s defin

almost 90

olled in P

e drug co

s have credit

ending. Exam

ees Health B

eceiving the 

e beneficiari

ed standard

0 percen

Part D pla

overage

table drug co

mples of othe

enefits prog

RDS. 

ies have no 

d benefit. 

t of Med

ans or h

(continu

overage, bu

er sources o

gram, TRICA

drug covera

dicare be

ad other

ued) 

t that covera

of creditable 

ARE, Departm

age or cover

eneficiari

r sources

age does no

coverage 

ment of Vete

rage that is le

ies 

s of 

ot 

erans 

ess 
Chart 

Deductible

Initial cove

Annual ou

Total cove

 out-of-p

Maximum

 coverag

Minimum 

 out-of-p

 Copay

 mul

 Copay

Note: U

(7

en

po

th

dr

wh

pe

no

Source: C

• The M

stand

drugs

out-of

payin

made

for dru

47.5 p

that e

coinsu

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annua

• Within

value 

For ex

deduc

Both d

benef

• Once 

region

10-4. P

ov

e

erage limit 

ut-of-pocket th

ered drug spe

pocket thresho

m amount of co

ge gap 

cost sharing 

pocket thresho

y for generic/p

ltisource drug

y for other pre

nder Part D’s de

75 percent paid b

nrollees exceedin

ocket threshold. 

e amount of tota

rugs filled during 

ho have no othe

ercent of total dru

ot count toward t

MS, Office of the

Medicare Pres

ard benefit st

s until the enro

f-pocket spen

g the full disc

e by the Patien

ugs filled in th

percent for br

exceeds the a

urance. 

parameters of

al increase in 

n certain limits

as the define

xample, a pla

ctible but use 

defined stand

fit are known 

a sponsoring

n, it may also 

A 

aramete

ver time 

hreshold 

ending at ann

old

ost sharing in

above the an

old

preferred 

gs 

escription dru

fined standard b

by the plan) until 

ng the ICL were 

Beginning in 201

al covered drug s

the coverage ga

r source of supp

ug spending in th

his threshold. Th

e Actuary. 

scription Drug

tructure. In 20

ollee reaches

nding reaches

counted price 

nt Protection 

he coverage g

rand-name dr

nnual thresho

f this defined s

average tota

s, sponsoring

ed standard b

an may use tie

cost-sharing 

dard benefit p

as “basic ben

g organization

offer a plan w

Data Book: He

ers of the

2

$25

2,2

3,6

ual 

5,1

n the 

2,8

nnual 

gs 

enefit, the enroll

total covered dru

responsible for p

11, enrollees face

spending at the a

ap. The amounts

lemental coverag

he coverage gap

he enrollee pays 

g, Improveme

013, it has a $

s $2,970 in tot

s the annual th

of covered dr

and Affordab

gap. In 2013, 

ugs and 79 p

old pay the gr

standard ben

al drug expens

g organization

benefit but a d

ered copayme

requirements

lans and plan

nefits.” 

n offers one p

with enhanced

ealth care spen

e defined

2006 2

50.00 $3

250.00 2,8

600.00 4,5

00.00 6,4

850.00 3,6

2.00

5.00

ee pays the dedu

ug spending reac

paying 100 perce

e reduced cost s

annual out-of-poc

 shown are for in

ge, assuming tha

. Cost sharing pa

nominal cost sha

ent, and Mode

$325 deductib

tal covered dr

hreshold. Bef

rugs filled dur

ble Care Act o

the cost shar

ercent for gen

reater of $2.6

efit structure 

ses of Medica

ns may offer P

different benef

ents rather th

s that are equ

ns that are ac

plan with basic

d benefits—b

nding and the M

d standar

2010 2

310.00 $3

830.00 2,8

550.00 4,5

440.75 6,4

610.00 3,6

2.50

6.30

uctible and then 

ches the initial co

ent of covered dr

sharing in the cov

cket threshold de

ndividuals not rec

at expenses for b

aid by most sour

aring above the 

ernization Act

ble, 25 percen

rug spending

fore 2011, en

ring the cover

of 2010, enrol

ring for drugs

neric drugs. E

65 to $6.60 pe

increase ove

are beneficiar

Part D plans t

fit structure, a

an 25 percen

uivalent to a r

ctuarially equiv

c benefits wit

basic and sup

Medicare progr

rd benef

2011 

310.00 $3

840.00 2,9

550.00 4,7

447.50 6,6

607.50 3,7

2.50

6.30

25 percent of co

overage limit (IC

rug spending up 

verage gap. For 

epends on the m

ceiving Part D’s 

brand-name drug

rces of suppleme

limit. 

t of 2003 spec

nt coinsuranc

, and then a c

rollees were 

rage gap. Bec

lees face red

s filled during 

Enrollees with

er prescription

er time at the 

ries. 

that have the 

and most do o

nt coinsurance

rate higher tha

valent to the 

hin a prescrip

pplemental co

ram, June 2013

fit increa

2012 2

320.00 $32

930.00 2,97

700.00 4,75

657.50 6,95

727.50 3,76

2.60 

6.50 

overed drug spen

L). Before 2011, 

to the annual ou

2011 and later y

ix of brand and g

low-income subs

gs account for 85

ental coverage d

cified a define

ce on covered

coverage gap

responsible fo

cause of chan

uced cost sha

the gap phas

h drug spendi

n or 5 percent

same rate as

same actuar

offer such pla

e or have no 

an 25 percen

defined stand

ption drug pla

overage comb

3 165

ase 

2013 

25.00 

70.00 

50.00 

54.52 

63.75 

2.65 

6.60 

nding 

ut-ofyears, 

generic 

sidy 

5.6 

oes 

ed 

d

p until 

or 

nges 

aring 

se is 

ng 

t

s the 

ial 

ans. 

t. 

dard 

an 

bined. 
166 Presc

Chart 

 

Total 

Type of or

 Nationala

 Other 

Type of be

 Defined 

 Actuaria

 Enhance

Type of de

 Zero 

 Reduced

 Defined 

Drugs cov

 Some ge

 no bran

 Some ge

 brand-n

 None 

Note: PD

U

a R

b I

c $

Source: M

• Part D

offerin

• In 201

each 

enroll

• For 20

and w

but wi

contin

enhan

• A larg

plans 

in 201

• In 201

Howe

begin

10-4).

elimin

cription drugs

10-5. C

rganization 

a

enefit 

standard 

lly equivalentb

ed 

eductible 

d

standardc

vered in the ga

enerics but 

nd-name drugs

enerics and som

name drugs 

DP (prescription 

.S. territories. Su

Reflects total num

ncludes “actuaria

$320 in 2012 and

edPAC analysis 

D drew slightly

ng 1,031 PDP

13, 83 percen

of the 34 PDP

ment. 

013, sponsors

with actuarially

ith alternative 

nue to enroll in

nced benefit p

ger proportion 

with some ga

12. 

13, 93 percen

ever, because 

ning in 2011, 

. In addition, m

nates the cove

Character

Plans 

Number P

1,041 

838 

203 

95 

446 

500 

488 

108 

445 

ap 

 197 

me 

73 

771 

drug plan). The 

ums may not add

mber of plans for

ally equivalent st

d $325 in 2013. 

of CMS landsca

y fewer standPs in 2013 com

t of all PDPs a

P regions. Pla

s are offering 

y equivalent be

benefit desig

n actuarially e

plans doubled 

of PDPs inclu

ap coverage o

t of PDP enro

of the change

beneficiaries 

many PDP en

erage gap. 

ristics of

 2012

Enro

Feb

Num

ercent (in mill

100% 17.

80 14.

20 2.

9 1.

43 13.

48 3.

47 7.

10 1.

43 8.

19 0.

7 0.

74 16.

PDPs and enroll

d to totals due to 

r organizations w

tandard” and “ba

ape, premium, an

-alone PDPs i

mpared with 1

are offered by

ns offered by 

more PDPs w

enefits (havin

gns) than they 

equivalent plan

between 201

ude some ben

offer generics 

ollees are in p

es made by th

no longer fac

rollees receiv

f Medica

ollees as of 

bruary 2012

ber 

ions) Percent

5 100%

9 85

6 15

0 5

2 75

3 19

3 42

8 11

3 48

8 4

3 2

4 94

lment described 

rounding. 

with at least 1 PD

asic alternative” b

nd enrollment dat

into the field fo

,041 in 2012.

y sponsoring o

those nationa

with enhanced

g the same av

did in 2012. A

ns, the share 

2 and 2013.

nefits in the co

and brand-na

lans that offer

he Patient Pro

ce 100 percen

ve Part D’s low

are PDPs

P

t Number

1,031

858

173

36

483

512

466

98

467

173

174

684

here exclude em

DP in each of the

benefits. 

ta. 

for 2013 than 

organizations 

al sponsors a

d benefits (bas

verage value 

Although mos

of PDP enroll

overage gap f

ame drugs, co

r no additiona

otection and A

nt coinsurance

w-income sub

s

2013

lans

r Percent (

100% 

83 

17 

3 

47 

50 

45 

9 

45 

17 

17 

66 

mployer-only plan

34 PDP regions

for 2012. Plan

that have at l

ccount for 89 

sic plus suppl

as the define

st enrollees (6

lees choosing

for 2013 than 

ompared with 

al benefits in th

Affordable Car

e in the covera

bsidy, which ef

3 

Enrollees a

February 20

Number

in millions) Pe

18.0 1

16.0 

2.1 

0.5 

10.5 

7.1 

8.1 

0.6 

9.4 

0.5 

0.7 

16.8 

ns and plans offe

s. 

n sponsors ar

least 1 PDP in

percent of all

emental cove

ed standard be

61 percent) 

g to enroll in 

in 2012. Half

about 27 perc

he coverage g

re Act of 2010

age gap (see 

ffectively 

as of 

013 

ercent 

100% 

89 

11 

3 

58 

39 

45 

3 

52 

3 

4 

93 

ered in 

re 

n

l PDP 

erage) 

enefit 

of all 

cent

gap. 

0, 

Chart 
Chart 

 

Totals 

Type of org

 Local HM

 Local PP

 PFFS 

 Regional

Type of be

 Defined s

 Actuarial

 Enhance

Type of de

 Zero 

 Reduced

 Defined s

Drugs cove

 Some ge

 brand-n

 Some ge

 brand-n

 None 

Note: M

pr

em

on

 *B

st

 **

Source: M

• There

MA–P

makin

declin

by ne

slightl

• A larg

benef

benef

perce

• Eighty

of tota

• MA–P

2013,

no bra

cover

10-6. C

ganization 

MO 

PO 

l PPO 

nefit 

standard 

ly equivalent*

ed 

ductible 

d

standard**

ered in the gap

enerics but no 

name drugs 

enerics and som

name drugs 

A–PD (Medicare

rovider organizat

mployer-only pla

nly plans. Numbe

Benefits labeled a

andard” and “bas

$320 in 2012 an

edPAC analysis 

e are about 6 

PD plans com

ng up 62 perc

ne, from 125 i

arly 10 perce

ly between 20

ger share of M

fits (compare 

fits compared

ent of total MA

y-six percent o

al MA–PD enr

PD plans are 

 50 percent o

and-name dru

rage. Those p

A 

Character

Plans 

Number Pe

1,541 10

 

951 6

430 2

125 

35 

 

37 

86 

1,418 9

 

1,372 8

98 

71 

p 

373 2

me 

397 2

771 5

e Advantage–Pre

tion), PFFS (priva

ns, plans offered

ers may not add 

actuarially equiva

sic alternative” b

d $325 in 2013. 

of CMS landsca

percent more

mpared with 1,

cent of all (unw

n 2012 to 112

ent (42 plans) 

012 and 2013

MA–PD plans 

Chart 10-6 w

 with 91 perc

A–PD enrollm

of MA–PD pla

rollment in 20

more likely th

of MA–PD pla

ug coverage a

plans account

Data Book: He

ristics of

2012

En

Fe

Num

ercent (in mill

00% 8.

2 5.

8 1.

8 0.4

2 0.

2 0.

6 0.

2 7.

9 7.

6 0.

5 0.

4 2.

6 2.

50 4.

escription Drug [p

ate fee-for-servic

d in U.S. territorie

to totals due to r

alent to Part D’s 

benefits. 

ape, premium, an

e MA–PD plan

,541 the year 

weighted) offe

2 in 2013. The

while the num

3. 

than stand-a

with Chart 10-5

cent of MA–PD

ent. 

ans have no d

13. 

han PDPs to p

ans include so

and 27 perce

t for 50 percen

ealth care spen

f MA–PD

nrollees as of 

ebruary 2012

ber 

ions) Percent

5 100%

9 69

5 18

4 5

7 8

1 1

5 6

9 94

5 88

8 9

2 2

1 25

3 27

0 48 

plan]), HMO (hea

ce). The MA–PD

es, 1876 cost pla

rounding. 

standard benefit

nd enrollment dat

ns in 2013 tha

before. HMO

erings in 2013

e number of d

mber of drug 

lone prescrip

5). In 2013, 5

D plans. In 20

deductible in 2

provide some

ome gap cove

nt with some 

nt of MA–PD 

nding and the M

Ds 

Pla

t Number

1,627

1,011

472

112

32

31

120

1,476

1,407

136

84

364

445

818

alth maintenance

 plans and enrol

ans, special need

t include what CM

ta. 

an in 2012. S

Os remain the

3. The numbe

drug plans off

plans offered

ption drug plan

50 percent of a

013, enhance

2013. These p

e additional be

erage—22 pe

generics and

enrollment. 

Medicare progr

2013 

ans

Percent (in

100% 

62

29

7

2

2

7

91

86

8

5

22

27

50

e organization), P

lment described 

ds plans, demons

MS calls “actuari

Sponsors are o

e dominant kin

er of PFFS pl

ffered by loca

d by regional P

ns (PDPs) off

all PDPs hav

ed MA–PD pla

plans attracted

enefits in the 

rcent with som

d some brand

ram, June 2013

Enrollees as o

February 201

Number 

n millions) Pe

9.3 1

6.5 

1.7 

0.3 

0.8 

0.1 

0.7 

8.6 

8.2 

0.8 

0.2 

2.0 

2.6 

4.6 

PPO (preferred 

here exclude 

strations, and Pa

ially equivalent 

offering 1,627

nd of MA–PD

ans continues

l PPOs increa

PPOs decrea

fer enhanced 

e enhanced 

ans attracted 

d about 89 pe

coverage gap

me generics 

-name drug 

3 167

of 

3 

ercent 

100% 

70 

18 

3 

8 

1 

7 

92 

89 

9 

2 

22 

28 

50 

art B–

7

 plan, 

s to 

ased 

ased 

92 

ercent 

p. In 

but 
168 Presc

Chart 

PDPs 

 Basic co

 Enhance

covera

 Any cove

MA–PDs

including

 Basic co

 Enhance

covera

 Any cove

All plans

 Basic co

 Enhance

covera

 Any cove

Note: PD

PD

an

de

 *R

of

be

of

or

Source: M

• The a

2013

• The a

per m

• MA–P

dollar

qualit

provid

with r

enha

• The p

incre

cription drugs

10-7. A

e

(in

overage 

ed 

age 

erage 

s, 

g SNPs* 

overage 

ed 

age 

erage 

s

overage 

ed 

age 

erage 

DP (prescription 

DPs and enrollm

nd enrollment de

emonstrations, a

Reflects the portio

ffer Part D covera

etween a plan’s p

ffset Part D prem

rganizations and 

edPAC analysis 

average prem

. 

average prem

month in 201

PD plans ca

rs—a portion

ty ratings) of

ding Part A 

rebate dollar

nced offerin

portion of Me

ased by abo

Average P

2012 

nrollment 

n millions) 

Av

20

w

14.1 

3.3 

17.5 

 

1.3 

8.0 

9.3 

 

 

15.5 

11.3 

26.8 

drug plan), MA–

ment described he

escribed here exc

nd Part B–only p

on of Medicare A

age. MA–PD pre

payment benchm

mium costs. Lowe

counties of oper

of CMS landsca

mium paid b

miums for be

2. 

n lower the 

n (between 5

f the differen

and Part B s

rs. Many MA

gs and lowe

edicare Adva

out $1 in 201

Part D pr

erage monthly 

012 premium 

weighted by 

2012 

enrollment 

 

$33

58

38

27

12

14

33

26

30

–PD (Medicare A

ere exclude emp

clude employer-o

plans. 

Advantage plans

emiums reflect re

mark and its bid f

er average premi

ration than MA–P

ape, plan report, 

by Part D en

eneficiaries 

part of their 

58 percent a

nce between

services. MA

A–PD plans 

er average p

antage prem

13, with the a

remiums

2013 

enrollment 

(in millions)

 

11.0 

7.1

18.0 

1.6 

9.0

10.6 

12.5 

16.0

28.6 

Advantage–Presc

loyer-only plans 

only plans, plans 

’ total monthly pr

ebate dollars (bet

for providing Part

ums for enhance

PD plans with ba

and enrollment d

rollees rema

enrolled in P

monthly pre

and 72 perce

n the plan’s p

A–PD plans 

use rebate d

remiums co

miums attribu

average MA

s

Average mo

 2013 prem

weighted 

 2013

enrollme

 

$32

49

39

29

13

15

32

28

30

cription Drug [pla

and plans offere

 offered in U.S. t

remium attributa

tween 58 percen

t A and Part B se

ed MA–PD plans

asic coverage. 

data. 

ained stable 

PDP increas

emium attribu

ent in 2013, 

payment ben

may also en

dollars in the

mpared with

utable to pre

A–PD enrolle

onthly 

mium 

by 

nt 

Doll

chan

–$

–9.

0.

1.

0.

0.

–0.

3.

0.

an]), SNPs (spec

ed in U.S. territor

territories, 1876 c

ble to Part D ben

nt and 72 percent

ervices in 2013) 

s reflect a differe

at around $

sed slightly t

utable to Pa

depending o

nchmark and

nhance their 

ese ways, re

h PDPs. 

escription dru

ee paying $1

lar 

nge 

Perce

chan

weig

aver

prem

 

$1 –

4 –1

8 

 

7 

6 

9 

 

 

9 –

0 1

3 

ial needs plans).

ries. The MA–PD

cost plans, 

nefits for plans th

t of the difference

that were used t

nt mix of sponso

$30 per mont

o $39 from $

art D using re

on a plan’s 

d its bid for 

Part D bene

esulting in m

ug benefits 

5 per month

entage 

ge in 

hted 

rage 

mium 

–3 % 

16

2

6

5

7

–3

12

1

. The 

D plans 

hat 

e 

o 

oring 

th in 

$38 

ebate 

efit 

ore 

h. 
Chart 

PDP regio

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

29 

30 

31 

32 

33 

34 

 

Note: PD

Source: M

• The nu

2013. 

• HI and

• In 201

premiu

• Each r

zero p

10-8. N

en

on State(s)

ME, NH

CT, MA

NY 

NJ 

DC, DE

PA, WV

VA 

NC 

SC 

GA 

FL 

AL, TN 

MI 

OH 

IN, KY 

WI 

IL 

MO 

AR 

MS 

LA 

TX 

OK 

KS 

IA, MN,

 NE, SD

NM 

CO 

AZ 

NV 

OR, WA

ID, UT 

CA 

HI 

AK 

Total 

DP (prescription 

edPAC based on

umber of standThe median nu

d AK had the fe

3, enrollees wh

um. In 2013, 33

region has at le

remium plans a

A 

umber o

nrollees 

)

H

A, RI, VT 

E, MD 

V

 MT, ND, 

D, WY 

A

drug plan), LIS (

n 2012 and 2013

-alone PDPs de

umber of plans 

west stand-alon

ho receive Part 

31 PDPs qualifie

east two PDPs a

available. 

Data Book: He

of PDPs q

remaine

Numbe

2012 2

28 

30 

29 

30 

31 

36 

30 

30 

32 

30 

33 

32 

34 

33 

31 

29 

33 

30 

30 

30 

30 

33 

30 

31 

33 

30 

28 

30 

29 

30 

33 

33 

25 

25 

1,041 1

(low-income sub

3 PDP landscape

ecreased by ab

offered in each

ne PDPs with 2

D’s LIS have a

ed to be premiu

available to LIS

ealth care spen

qualifyin

ed stable

er of PDPs 

2013 Differe

28 

30 

28 –

29 –

29 –

38 

31 

30 

31 –

30 

34 

33 

33 –

33 

31 

30 

32 –

31 

30 

29 –

30 

32 –

30 

30 –

32 –

30 

29 

29 –

29 

30 

32 –

32 –

23 –

23 –

,031 –1

sidy). 

e file provided by

bout 1 percent a

h region in 2013

23; the PA–WV

about the same 

um-free to thos

S enrollees at no

nding and the M

ng as pre

e in 2013

Nu

ence 20

0 

0 

–1 

–1 

–2 

2 

1 

0 

–1 

0 

1 

1 

–1 

0 

0 

1 

–1 

1 

0 

–1 

0 

–1 

0 

–1 

–1 

0 

1 

–1 

0 

0 

–1 

–1 

–2 

–2 

10 3

y CMS. 

around the cou

3 remained stab

V region had the

number of opti

se enrollees, co

o premium; mo

Medicare progr

emium-fr

3

umber of PDPs t

premium for LIS

012 2013 

8 10 

10 6 

12 12 

9 10 

13 13 

12 14 

10 10 

9 8 

12 14 

12 13 

3 2 

12 13 

12 10 

8 8 

13 11 

10 10 

10 10 

8 8 

15 15 

12 13 

12 14 

13 12 

9 11 

10 10 

9 8 

6 7 

5 4 

10 10 

2 2 

9 10 

12 10 

6 6 

10 10 

4 7 

327 331 

ntry, from 1,04

ble at 30. 

e most with 38. 

ions for PDPs i

ompared with 32

ost regions have

ram, June 2013

ree to LIS

that have zero 

S enrollees 

Difference

2 

–4 

0 

1 

0 

2 

0 

–1 

2 

1 

–1 

1 

–2 

0 

–2 

0 

0 

0 

0 

1 

2 

–1 

2 

0 

–1 

1 

–1 

0 

0 

1 

–2 

0 

0 

3 

4 

1 in 2012 to 1,0

n which they pa

27 in 2012. 

e substantially 

3 169

S

031 in 

ay no 

more 
170 Presc

Chart 

Note: PD

en

ex

ro

Source: M

su

• In 20

nonpr

such 

73 pe

of for

MA–P

• For e

$40 fo

is $2 

the m

a gen

• Most 

drugs

In 20

amon

0

10

20

30

40

50

60

70

80

90

100

20

Percent

cription drugs

10-9. In

ch

b

DP (prescription 

nrollment. All calc

xclude demonstra

ounding. 

edPAC-sponsore

ubmitted to CMS

13, about 96

referred bran

distinctions. 

ercent in 2006

mulary tier st

PD enrollees

nrollees in P

or a preferred

for preferred

median copay

neric drug on

plans, excep

s, also use a 

13, median c

ng MA–PD pl

006 2007

n 2013, m

harge hi

rand-nam

drug plan), MA–

culations exclude

ation programs, 

ed analysis by N

. 

 percent of P

nd-name drug

Slightly over

6. Plans with

tructure in 20

. 

PDPs with two

d brand and 

d tier drugs a

y is $45 for a 

 preferred an

pt those that 

specialty tier

cost sharing f

ans. Enrollee

2009 2011

PDP enroll

Other tier 

Two gene

Generic, p

Generic a

25% coins

most Part

gher cop

me drugs

–PD (Medicare A

e employer-only 

special needs pl

NORC/Georgetow

PDP enrollee

gs. In 2006, o

r 90 percent o

h two generic

013, account

o generic and

$85 for a no

nd $5 for non

preferred bra

nd nonprefer

use the defin

r for drugs th

for a specialt

es may not a

4

33

64

2012 201

ees

structure

eric and two bran

preferred brand, 

and brand-name 

surance

t D enrol

payment

s

Advantage–Presc

groups and plan

ans, and 1876 c

wn University/Soc

s are in plan

only 59 perce

of MA–PD en

c and two bra

ting for 64 pe

d two brandnpreferred b

npreferred tie

and, $90 for 

red tiers, res

ned standard

hat have a ne

ty tier drug is

appeal cost s

3

4

3 2

nd-name tiers

and nonpreferre

tiers

llees are

ts for no

cription Drug [pla

ns offered in U.S

cost plans. Comp

cial and Scientifi

s that disting

ent of PDP e

nrollees are 

and-name tie

ercent of PDP

name tiers, t

rand. The m

er drugs. For

a nonpreferr

spectively. 

d benefit’s 25

egotiated pric

s 26 percent 

sharing for dr

2006 2007

ed brand-name ti

e in plans

npreferr

an]). Calculations

. territories. In ad

ponents may not 

ic Systems analy

guish betwee

enrollees wer

in such plans

ers are the mo

P enrollees a

the median c

edian copay 

r MA–PD enr

red brand, an

5 percent coin

ce of $600 pe

among PDPs

rugs in specia

2009 2011

MA-PD enrollee

ers

s that 

red 

s are weighted by

ddition, MA–PD p

add to totals due

ysis of formularie

en preferred a

re in plans w

s in 2013, up

ost common 

and 62 perce

copay in 2013

for generic d

rollees, in 20

nd $3 and $1

nsurance for

er month or m

s and 33 per

alty tiers.

1

2

6

6

1 2012 20

es

y

plans 

e to 

es 

and 

with 

p from 

type 

nt of 

3 is 

drugs 

13, 

10 for 

r all 

more. 

rcent 

2

29

62

013
Chart 

Note: PD

en

ex

en

en

sp

av

Source: M

su

• The n

acces

(prea

partic

must 

For e

which

on-fo

autho

that a

• In 20

mana

for th

autho

0

5

10

15

20

25

30

35

40

45

a

Percent

10-10. In

co

DP (prescription 

nrollment. All calc

xclude demonstra

ntities that are su

nrollee must get 

pecified drugs firs

vailable to the en

edPAC-sponsore

ubmitted to CMS

number of dr

ss to medica

approval from

cular drug co

try specified

example, unl

h may be rel

ormulary drug

orization req

are no longe

13, the aver

agement for 

e average M

orization to m

Prior

authorization t

2007

A 

n 2013, u

ontinues

drug plan), MA–

culations exclude

ation programs, 

ubject to utilizatio

preapproval from

st before moving

nrollee in a given

ed analysis by N

. 

rugs listed o

ations. Plans

m plan befor

overed in a g

d drugs befo

isted drugs 

latively easy

gs may not b

uest. Also, a

er used in co

rage enrollee

40 percent o

MA–PD plan 

manage enro

Step

therapy

Qua

lim

7 2009 201

PDPs

Data Book: He

use of uti

s to incre

–PD (Medicare A

e employer-only 

special needs pl

on management,

m the plan before

g to other drugs. 

 time period. 

NORC/Georgetow

on a plan’s fo

s’ processes

re coverage)

given time pe

ore moving to

may be cove

y for some pl

be covered i

a formulary’s

ommon pract

e in a standof drugs liste

enrollee. Pa

ollees’ presc

antity

mits

Any

utilizati

managem

1 2013

ealth care spen

ilization

ease for 

Advantage–Presc

groups and plan

ans, and 1876 c

weighted by pla

e coverage. Step

Quantity limits m

wn University/Soc

ormulary doe

s for nonform

), quantity lim

eriod), and s

o other drug

ered through

lans and mo

in cases in w

s size can be

tice. 

-alone PDP f

ed on a plan

art D plans t

cription drug

on

ment

0

5

10

15

20

25

30

35

40

45

nding and the M

manage

both PD

cription Drug [pla

ns offered in U.S

cost plans. Value

an enrollment. Pr

p therapy refers to

mean that plans li

cial and Scientifi

es not neces

mulary excep

mits (plans li

step therapy

gs) can affec

h the nonfor

ore burdenso

which a plan

e deceptivel

faces some 

n’s formulary

typically use

 use. 

0

5

0

5

0

5

0

5

0

5

Prior

authorization

2

Medicare progr

ment too

DPs and M

an]). Calculations

. territories. In ad

s reflect the perc

rior authorization

o a requirement 

imit the number o

ic Systems analy

ssarily repre

ptions, prior 

imit the num

y requiremen

ct access to 

rmulary exce

ome for othe

n does not ap

y large if it in

form of utiliz

y, compared 

e quantity lim

Step

therapy

Q

2007 2009 2

MA–PD

ram, June 2013

ols 

MA–PDs

s are weighted by

ddition, MA–PD p

cent of listed che

 means that the 

that the enrollee

of doses of a dru

ysis of formularie

esent benefic

authorizatio

mber of doses

nts (enrollee

certain drug

eptions proce

ers. Alternati

pprove a prio

ncludes drug

zation 

with 29 perc

mits or prior 

Quantity

limits

A

utiliz

manag

2011 2013

Ds

3 171

s

y

plans 

emical 

e try 

ug 

es 

ciary 

n 

s of a 

es 

s. 

ess, 

ively, 

or 

gs 

cent 

Any

zation

gement
172 Presc

Chart 

Beneficiarie

Percent o

Gender

 Male 

 Female 

Race/ethn

 White, no

 African A

 non-His

 Hispanic 

 Asian 

 Other 

Age (years

 <65 

 65–69 

 70–74 

 75–79 

 80+ 

Urbanicity

 Metropol

 Micropoli

 Rural 

Note: PD

m

a F

A 

sw

b U

a 

le

ba

 

Source: M

• In 20

the ye

plans

• Comp

fema

age 6

likely

LIS e

• Patte

popu

rema

cription drugs

10-11. C

esa (in millions

of all Medicare 

icity 

on-Hispanic 

American, 

spanic 

s) 

yb

itan 

itan 

DP (prescription 

ay not sum to 10

Figures for Medic

beneficiary is cla

witch plan types d

Urbanicity is base

core urban area 

ss than 50,000) 

ased statistical a

edPAC analysis 

11, 31.5 mil

ear. Most of

s. Nearly 12 

pared with th

le and non-W

65 and more

y to be femal

enrollees. 

erns of enroll

lation with 7

aining 8 perc

Character

All 

Medicare

) 51.6 

100% 

45% 

55 

77 

10 

8 

3 

2 

22 

24 

18 

14 

22 

79 

12 

8 

drug plan), MA–

00 due to roundin

care and Part D i

assified as LIS if 

during the year, 

ed on the Office 

of 50,000 or mo

population. Abou

rea designation. 

of Medicare Par

lion Medicar

f them (20.1 

million enro

he overall M

White. MA–P

e likely to be 

e, non-White

lment by urb

79 percent in

cent in rural a

ristics of

 Part D 

31.5 

61% 

41% 

59 

74 

11 

10 

3 

2 

24 

22 

18 

14 

22 

79 

12 

8 

–PD (Medicare A

ng. 

include all benef

that individual re

classification into

of Management 

ore population, an

ut 1 percent of M

rt D denominator

re beneficiar

million) wer

llees receive

Medicare pop

PD enrollees

Hispanic co

e, and disab

banicity for P

n metropolita

areas. 

f Part D e

 PDP

20.1

 39

 41%

 59

 76

 11

8

3

 2

 27

 20

 17

 13

 23

 74

 15

 11

Advantage–Presc

ficiaries with at le

eceived Part D’s 

o plan types is ba

and Budget’s co

nd a micropolitan

Medicare benefici

r and Risk Adjust

ries (61 perc

re in stand-a

ed Part D’s L

pulation, Part

s are less lik

ompared with

bled benefici

Part D enrolle

an areas, 12 

enrollees

Plan type 

 MA–PD

 11.4 

9% 22%

 

% 43%

9 57 

 

6 70 

 11 

8 14 

3 3 

2 1 

 

7 18 

0 26 

7 20 

3 16 

3 21 

 

4 88 

5 7 

 4 

cription Drug [pla

east one month o

LIS at some poi

ased on a greate

ore-based statisti

n area contains a

aries were exclu

tment System file

cent) enrolle

alone PDPs, 

LIS. 

rt D enrollees

kely to be dis

h PDP enrol

iaries under 

ees were sim

percent in m

s, 2011 

S

D L

 11.8

% 2

 3

 6

5

 2

 1

 4

 1

 1

 1

 1

 7

 1

an]), LIS (low-inco

of enrollment in t

int during the yea

er number of mo

ical area. A metr

an urban core of 

uded due to an u

es from CMS. 

d in Part D a

with 11.4 m

s are more l

sabled bene

llees; LIS en

age 65 com

milar to the o

micropolitan 

Subsidy status

IS Non-L

8 19.7

3% 38

9% 43

61 57

58 84

0 6

5 7

5 2

2 1

43 12

4 27

2 22

0 16

9 23

77 80

3 12

9 8

ome subsidy). Pe

he respective pro

ar. For individual

nths of enrollme

ropolitan area co

at least 10,000 (

nidentifiable core

at some poin

million in MA–

ikely to be 

eficiaries und

nrollees are 

mpared with n

overall Medi

areas, and 

LIS 

7 

8% 

3% 

7 

4 

6

7 

2 

 

2 

7 

2 

6 

3 

0 

2 

8 

 

ercents 

ogram. 

ls who 

nt. 

ontains 

(but 

ent in 

–PD 

der 

more 

noncare 

the 
Chart 

Part D en

 Total 

 By plan t

 PDP 

 MA–PD

 By subsid

 LIS 

 Non-LI

 By race/e

 White, 

 African

 Hispan

 Other 

 By age (y

 <65 

 65–69 

 70–79 

 80+ 

Enrollme

 Total 

 By plan t

 PDP 

 MA–PD

 By subsid

 LIS 

 Non-LI

 By race/e

 White, 

 African

 Hispan

 Other 

 By age (y

 <65 

 65–69 

 70–79 

 80+ 

Note: PD

su

 *F

re

th

su

Source: M

• Betwe

compa

enrolle

growth

enrolle

an inc

10-12. P

nrollment (in m

type 

D

dy status 

S 

ethnicity 

non-Hispanic 

n American, no

nic 

years) 

ent growth (in 

type 

D

dy status 

S 

ethnicity 

non-Hispanic 

n American, no

nic 

years) 

DP (prescription d

ubsidy). 

Figures include al

eceived Part D’s L

e year, that indiv

um to totals due t

edPAC analysis 

een 2006 and 

ared with grow

ees receiving 

h rates (4 perc

ees declined b

crease betwee

A 

art D en

millions)* 

n-Hispanic 

percent) 

n-Hispanic 

drug plan), MA–P

l beneficiaries wi

LIS at some point

idual was classifi

o rounding. 

of Medicare Par

2011, MA–PD

wth rates of les

the LIS remai

cent) were obs

between 2007

en 2010 and 20

Data Book: He

rollment

2006 

 

24.5 

 

17.7 

6.8 

 

10.2 

14.3 

 

17.2 

2.6 

2.2 

2.5 

 

5.6 

5.0 

8.3 

5.6 

 

N/A 

 

N/A 

N/A 

 

N/A 

N/A 

 

N/A 

N/A 

N/A 

N/A 

 

N/A 

N/A 

N/A 

N/A 

PD (Medicare Adv

th at least one m

t during the year. 

ed into the type o

rt D denominator

D plan enrollme

ss than 3 perc

ned relatively 

served betwee

 and 2010 (fro

011 (7 percen

ealth care spen

t trends, 

2007 

 

26.1 

 

18.3 

7.8 

 

10.4 

15.7 

 

19.4 

2.9 

2.5 

1.3 

 

6.1 

5.4 

8.7 

6.0 

 

7% 

 

4 

14 

 

2 

10 

 

13 

13 

14 

–49 

 

8 

8 

5 

7 

vantage–Prescrip

onth of enrollmen

If a beneficiary w

of plan with a gre

r file from CMS. 

ent grew faste

cent per year, o

flat between 2

en 2009 and 2

om 10 percent

t). 

nding and the M

2006–20

2008 

 

27.5 

 

18.6 

8.9 

 

10.7 

16.9 

 

20.5 

3.1 

2.7 

1.3 

 

6.4 

5.9 

9.0 

6.3 

 

5%

 

2 

14 

 

2 

8 

 

5 

5 

6 

6 

 

6 

8 

4 

4 

ption Drug [plan])

nt. A beneficiary 

was enrolled in bo

eater number of m

er (by over 10

on average, fo

2006 and 2009

2011. The grow

t in 2007 to 3 p

Medicare progr

011 

2009 

 

28.7 

 

18.7 

10.0 

 

10.9 

17.8 

 

21.4 

3.2 

2.8 

1.3 

 

6.6 

6.3 

9.3 

6.4 

 

4%

 

<1 

12 

 

2 

6 

 

4 

4 

6 

<1 

 

4 

7 

4 

3 

), N/A (not applic

is classified as LI

oth a PDP and an

months of enrollm

percent per ye

or PDPs. The 

9 at 2 percent 

wth in the num

percent in 201

ram, June 2013

2010 

 

29.7 

 

18.9 

10.6 

 

11.3 

18.4 

 

22.0 

3.3 

3.0 

1.4 

 

6.9 

6.6 

9.6 

6.6 

 

4% 

 

1 

6 

 

4 

3 

 

3 

4 

6 

6 

 

4 

5 

3 

2 

able), LIS (low-in

IS if that individua

n MA–PD plan du

ment. Numbers ma

ear, on averag

number of 

per year. Hig

mber of non-LI

0) but experie

3 173

2011 

31.5 

20.1 

11.4 

11.8 

19.7 

23.3 

3.5 

3.2 

1.5 

7.5 

7.0 

10.1 

6.9 

6% 

6 

8 

4 

7 

6 

5 

6 

9 

8 

6 

5 

5 

ncome 

al 

uring 

ay not 

ge) 

her 

S 

enced 
174 Presc

Chart 

PDP 

region 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

29 

30 

31 

32 

33 

34 

Note: PD

(lo

 

Source: M

• Amon

bene

where

Regio

67 pe

enrol

• A wid

PD p

enrol

(Chart co

cription drugs

10-13. P

State(s) 

ME, NH 

CT, MA, RI, VT 

NY 

NJ 

DE, DC, MD 

PA, WV 

VA 

NC 

SC 

GA 

FL 

AL, TN 

MI 

OH 

IN, KY 

WI 

IL 

MO 

AR 

MS 

LA 

TX 

OK 

KS 

IA, MN, MT, NE

 ND, SD, WY 

NM 

CO 

AZ 

NV 

OR, WA 

ID, UT 

CA 

HI 

AK 

Mean 

Minimum 

Maximum 

DP (prescription 

ow-income subsi

edPAC analysis 

ng Part D re

ficiaries enro

e a low take

on 33 (HI), th

ercent, respe

led in emplo

de variation w

lans across 

lment in Me

ontinued nex

art D en

P

Medica

Part D 

57% 

60

62

54

48

65

54

60

56

62

63

62

50

66

63

57

57

64

62

66

63

57

60

63

, 

67

64

59

62

58

60

59

70

67

39

61

39

70

drug plan), RDS

dy). Definition of

of Part D enrollm

gions, in 20

olled in Part

e-up rate for 

he shares of

ectively. In th

oyer-sponso

was seen in

PDP region

dicare Adva

xt page) 

rollment

Percent of 

are enrollment 

RDS 

11% 

16

18

21

17

12

9

15

16

9

12

12

30

13

12

13

19

10

7

5

13

14

7

6

8

6

12

10

10

10

9

9

4

26

13

4

30

S (retiree drug su

f regions based o

ment data from C

11, between

D. Beneficia

the RDS wa

f Medicare b

hese two reg

red plans th

the shares 

s. The patte

ntage plans

t by regio

P

8

7

5

8

8

5

7

7

7

6

5

6

7

6

7

6

8

6

7

8

6

6

7

8

7

6

5

4

5

5

5

5

4

9

6

4

9

ubsidy), MA–PD (

on PDP regions u

CMS. 

n 39 percent 

aries were m

as observed.

beneficiaries

gions, fewer

at received t

of Part D en

ern of MA–P

. 

on, 2011

Perce

Plan type 

PDP MA–

84% 1

70 3

54 4

80 2

86 1

56 4

78 2

74 2

73 2

67 3

52 4

65 3

72 2

68 3

79 2

61 3

87 1

69 3

79 2

87 1

64 3

69 3

79 2

84 1

74 2

61 3

50 5

45 5

50 5

57 4

55 4

50 5

41 5

99

64 3

41

99 5

(Medicare Advan

used in Part D. 

t and 70 perc

more likely to

. For examp

s enrolled in 

r than 10 per

the RDS. 

nrollees who

D enrollmen

nt of Part D enro

–PD 

6% 

30 

46 

20 

4 

44 

22 

26 

27 

33 

48 

35 

28 

32 

21 

39 

3 

31 

21 

3 

36 

31 

21 

6 

26

39 

50 

55 

50 

43 

45 

50 

59 

1 

36 

1 

59 

ntage–Prescriptio

cent of all M

o enroll in Pa

ple, in Region

Part D were

rcent of ben

o enrolled in 

nt is generall

ollment

Subsidy statu

LIS Non

47% 5

43 5

45 5

35 6

41 5

33 6

36 6

42 5

44 5

43 5

35 6

45 5

39 6

30 7

38 6

32 6

38 6

35 6

45 5

53 4

49 5

45 5

38 6

29 7

27 7

39 6

29 7

32 6

29 7

31 6

27 7

39 6

29 7

62 3

37 6

27 3

62 7

on Drug [plan]), L

Medicare 

art D in regio

n 32 (CA) an

e 70 percent

eficiaries 

PDPs and M

ly consistent

s

n-LIS

53% 

57

55

65

59

67

64

58

56

57

65

55

61

70

62

68

62

65

55

47

51

55

62

71

73

61

71

68

71

69

73

61

71

38

63

38

73

LIS 

ons 

nd 

t and 

MA–

t with 
Chart 

• The s

MN, M

(AK).

enrol

more

10-13. P

share of Par

MT, NE, ND

 In 26 of the

lment. In two

e than half of

A 

art D en

rt D enrollees

D, SD, and W

e 34 PDP reg

o regions, R

f Part D enro

Data Book: He

rollment

s receiving t

WY) and in R

gions, LIS en

Region 20 (M

ollment.

ealth care spen

t by regio

the LIS rang

Region 31 (ID

nrollees acc

MS) and Reg

nding and the M

on, 2011

ged from 27 p

D and UT) to

count for 30 p

gion 34 (AK),

Medicare progr

 (continu

percent in R

o 62 percent 

percent to 5

, LIS enrolle

ram, June 2013

ued) 

Region 25 (IA

in Region 3

0 percent of

ees account f

3 175

A, 

34 

f

for 
176 Presc

Chart 

Note: An

20

ha

br

to

Source: M

• Medi

perce

were 

$6,48

total 

• The c

thres

spen

low-in

than 

accou

costli

1

2

3

4

5

6

7

8

9

10

Percent

cription drugs

10-14. T

th

nnual spending c

011, an individua

ave reached the 

rand-name drugs

tals due to round

edPAC analysis 

care Part D 

ent of Part D

responsible

84 under the

Part D spen

costliest 10 p

hold under t

ding. Nearly

ncome subs

Medicare Pa

unted for 39

iest quartile 

0

0

0

0

0

0

0

0

0

0

0

Perc

he majo

han half 

cuts used for this

al not receiving P

catastrophic pha

s accounted for 8

ding. 

of Medicare Par

spending is 

D enrollees h

e for a highe

e defined sta

ding. 

percent of be

the defined s

y three-quart

idy (see Cha

art A and Pa

 percent of a

accounted f

25

47

19

5

5

cent of enrolle

rity of Pa

of all Pa

s analysis genera

Part D’s low-incom

ase of the benefit

86.3 percent of to

rt D prescription 

concentrate

had annual s

r proportion

andard benef

eneficiaries,

standard ben

ters of benef

art 10-15). S

art B spendin

annual Medi

for 81 percen

ees

art D spe

rt D enro

ally correspond to

me subsidy and w

t at $6,483.72 in 

otal drug spendin

drug event data 

ed among a 

spending of $

of the cost o

fit. These be

 those with d

nefit, accoun

ficiaries with

Spending on 

ng. In 2009, 

care fee-for

nt of Medica

23

29

14

33

Percent of sp

ending is

ollees, 20

o the parameters

without other sou

total drug spend

ng in the coverag

from CMS. 

subset of be

$2,840 or m

of the drug u

eneficiaries a

drug spendi

nted for 47 p

h the highest

 prescription

the costlies

r-service (FF

are FFS spen

pending

s incurre

011 

s of the defined s

urces of supplem

ding, assuming th

ge gap. Compon

eneficiaries. 

ore, at whic

until their spe

accounted fo

ng above th

percent of to

t spending re

n drugs is les

t 5 percent o

FS) spending

nding 

1

≥ $

$6,4

$2,8

$31

$0-

76

Annual

prescr

ed by few

standard benefit

mental coverage 

hat expenses for

ents may not sum

In 2011, 28

h point enro

ending reac

or 76 percen

e catastroph

otal Part D 

eceive Part 

ss concentra

of beneficiar

g, and the 

10,000

484-$9,999

840-$6,483

10-$2,839

$309

l spending on

ription drugs

wer 

. In 

would 

r

m to 

llees 

hed 

nt of 

hic 

D’s 

ated 

ries 

n
Chart 

Sex 

 Male 

 Female 

Race/ethn

 White, n

African A

 Hispanic

 Other 

Age (year

 <65 

 65–69 

 70–74 

 75–80 

 80+ 

LIS status

 LIS 

 Non-LIS

Plan type

 PDP 

 MA–PD 

Note: LI

nu

ro

 *A

 **

of

 

Source: M

• In 20

spen

spen

• Part D

enrol

below

• Most 

(79 p

with a

with h

fact t

10-15. C

le

nicity 

non-Hispanic 

American, no

c

rs) 

s* 

S

e** 

S (low-income s

umber of benefic

ounding. 

A beneficiary is a

If a beneficiary w

f plan with a grea

edPAC analysis 

11, Part D e

ding at or ab

ding below $

D enrollees 

lees under a

w $2,840. 

Part D enro

percent) com

annual spen

higher annua

hat most LIS

A 

Character

evels, 20

n-Hispanic 

ubsidy), PDP (pr

ciaries were exclu

assigned LIS stat

was enrolled in bo

ater number of m

of Medicare Par

enrollees wit

bove $6,484

$2,840 (61 p

with annual 

age 65 and r

ollees with sp

mpared with M

nding below $

al spending 

S enrollees a

Data Book: He

ristics of

11 

<$

rescription drug p

uded from the an

us if that individu

oth a PDP and a

months of enrollm

rt D prescription 

h annual dru

 were more 

percent and 

spending at

receive the L

pending grea

MA–PD plan

$2,840 are m

(40 percent 

are more cos

ealth care spen

f Part D e

$2,840 

42%

58

74

11

10

5

22

24

19

14

22

31

69

60

40

plan), MA–PD (M

nalysis because o

ual received Part

an MA–PD plan d

ment. 

drug event data 

ug spending 

likely to be f

60 percent c

t or above $6

LIS compare

ater than $6

ns (21 perce

more likely to

compared w

stly on avera

nding and the M

enrollees

Annual drug

$2,840–$6

39%

61

75

11

10

5

22

19

18

15

26

45

55

70

30

Medicare Advanta

of missing data. 

t D’s LIS at some

during the year, t

and Part D deno

 between $2

female than

compared w

6,484 are m

ed with those

6,484 are enr

ent). On the o

o be in MA–

with 21 perc

age and are 

Medicare progr

s, by spe

g spending 

6,483 

age–Prescription

Percents may no

e point during the

that individual wa

ominator file from

2,840 and $6

 enrollees w

with 58 perce

more likely to 

e with annua

rolled in stan

other hand, 

–PDs compa

ent). This fin

 in PDPs. 

ram, June 2013

ending 

≥$6,484 

40%

60 

71 

14 

10 

5 

44 

15 

13 

11 

17 

74 

26 

79 

21 

n Drug [plan]). A 

ot sum to 100 du

e year. 

as classified in th

m CMS. 

6,483 and w

with annual 

ent). 

be disabled

al spending 

nd-alone PD

beneficiaries

ared with tho

nding reflect

3 177

small 

ue to 

he type 

with 

d

DPs 

s

ose 

ts the 
178 Presc

Chart 

Total gro

Total num

(million

Average

Per enro

 Total s

 Out-of-

 Plan lia

 Low-inc

 Numbe

Note: PD

ap

on

de

st

a N

b O

c P

 

Source: M

• In 201

perce

receiv

• The n

(1,004

accou

• Medic

PDP 

MA–P

• The a

PDP 

of pla

MA–P

• Avera

non-L

enroll

spend

sharin

cription drugs

10-16. P

oss spending 

mber of presc

ns) 

 spending pe

ollee per mon

pending 

-pocket spend

abilityc

come cost-sh

er of prescript

DP (prescription 

pplicable). Part D

n each record. Fo

enominator file w

atus. Numbers m

Number of presc

Out-of-pocket (O

Plan liability inclu

edPAC analysis 

11, gross spe

ent ($61.7 bill

ving the LIS a

number of pre

4 million) acc

unted for abo

care beneficia

enrollees hav

PD plan enro

average mont

enrollees ($1

ans ($33 vs. $

PD enrollees 

age monthly s

LIS enrollee (

lee is 5.1 com

ding, on aver

ng for LIS en

art D spe

(billions) 

criptionsa

r prescription

nth 

dingb

haring subsidy

tionsa

drug plan), MA–

D prescription dru

or purposes of cl

was used. Estima

may not sum to to

riptions standard

OP) spending in

udes plan payme

of Medicare Par

ending on dru

ion) accounte

accounted fo

escriptions fill

counted for by

out 44 percen

aries enrolled

ve higher ave

llees. 

thly plan liabi

162), while av

$36). The ave

($25) compa

spending per

$167), while 

mpared with 3

rage, than no

rollees, avera

ending a

Part D

$84.9

1,512

n $56

$239

35

144

y 53

4.3

–PD (Medicare A

ug event (PDE) r

lassifying the PD

ates are sensitive

otals due to roun

dized to a 30-day

cludes all payme

nts for drugs cov

rt D PDE data an

ugs for the Pa

ed for by Med

r about 55 pe

led by Part D

y PDP enrolle

nt (659 million

d in Part D pl

erage monthl

ility for MA–P

verage month

erage monthl

ared with PDP

r enrollee for 

the average 

3.8 for a nonn-LIS enrolle

aging $145 p

and utiliz

D PD

$61

1,00

$6

$27

3

16

6

4

Advantage–Presc

records are class

DE records by LIS

e to the method u

nding. 

y supply. 

ents that count to

vered by both ba

nd denominator f

art D program

dicare benefi

ercent ($47 b

D enrollees to

ees. The 37 p

n) of the total 

ans fill 4.3 pr

y spending a

PD enrollees 

hly OOP spen

y low-income

P enrollees ($

an LIS enroll

number of pr

-LIS enrollee.

ees ($8 vs. $5

per month. 

zation pe

Plan type 

DP MA–P

.7 $23.2

04 508

61 $46

74 $178

36 33

62 114

69 25

.5 3.9

cription Drug [pla

sified into plan ty

S status, monthly

used to classify P

oward the annua

asic and supplem

file from CMS. 

m totaled $84

ciaries enroll

billion) of the t

otaled 1.51 bil

percent of en

number of pr

rescriptions a

and more pre

($114) is con

nding is simil

e cost-sharing

$69). 

lee ($364) is 

rescriptions f

. LIS enrollee

50). Part D’s 

er enrolle

PD 

2 $

8

6

8 $

3

4

5

9

an]), LIS (low-inco

ypes based on th

y LIS eligibility in

PDE records to e

al OOP spending

mental (enhanced

4.9 billion, wit

led in PDPs. 

total. 

llion, with abo

nrollees who 

rescriptions f

at $239 per m

scriptions fille

nsiderably low

ar for enrolle

g subsidy is m

more than do

filled per mon

es have much

LIS pays for 

ee, 2011

LIS status

LIS No

$47.0 $3

659 8

$71 $

$364 $

8 

211 

145 N

5.1 

ome subsidy), N/

e contract identif

nformation in Par

each plan type an

 threshold. 

d) benefits. 

th about 73 

Part D enroll

out two-thirds

received the 

filled. 

month on aver

ed compared

wer than that 

ees in both typ

much lower f

ouble that of 

nth by an LIS 

h lower OOP

most of the c

n-LIS 

37.9

853

$44

167

50

106

N/A

3.8

/A (not 

fication 

rt D’s 

nd LIS 

lees 

s

LIS 

rage. 

d with 

of 

pes 

for 

a 

cost 
Chart 

PDP 

region 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

29 

30 

31 

32 

33 

34 

National ave

Note: PD

 *S

ar

 **A

di

pr

 

Source: Ac

 

• Averag

capita 

capita 

• Adjust

variati

from 0

capita 

10-17. P

co

State(s) 

ME, NH 

CT, MA, RI, VT 

NY 

NJ 

DE, DC, MD 

PA, WV 

VA 

NC 

SC 

GA 

FL 

AL, TN 

MI 

OH 

IN, KY 

WI 

IL 

MO 

AR 

MS 

LA 

TX 

OK 

KS 

IA, MN, MT, NE

 ND, SD, WY 

NM 

CO 

AZ 

NV 

OR, WA 

ID, UT 

CA 

HI 

AK 

Mean 

Minimum 

Maximum 

erage spending 

DP (prescription 

Spending include

re for beneficiarie

Adjusted spendi

sability, and lowrescription drug h

cumen, LLC, ana

ge per capita s

spending was 

spending rang

ting per capita 

on across PDP

0.54 (1.30 minu

spending rang

A 

art D spe

ontrollin

P

en

, 

drug plan), LIS (

es payments for i

es residing in a c

ng controls for re

-income subsidy 

hierarchical cond

alysis for MedPA

spending for dru

$2,768 in 201

ges from 75 pe

drug spending 

P regions: After

us 0.75) to 0.35

ges from 83 pe

Data Book: He

ending v

ng for pri

Percent 

nrolled in 

PDPs 

P

 84% 

70 

54 

80 

86 

56 

78 

74 

73 

67 

52 

65 

72 

68 

79 

61 

87 

69 

79 

87 

64 

69 

79 

84 

74 

61 

50 

45 

50 

57 

55 

50 

41 

99 

64 

41 

99 

(low-income sub

ngredient costs a

community setting

egional difference

status), and ben

dition categories.

AC. 

ugs under Part

1. Relative to t

rcent (0.75) in 

for regional dif

r the adjustmen

5 (1.18 minus 0

rcent (0.83) in 

ealth care spen

varies ac

ces and 

Percent of Part D

enrollees 

receiving LIS 

47% 

43

45

35

41

33

36

42

44

43

35

45

39

30

38

32

38

35

45

53

49

45

38

29

27

39

29

32

29

31

27

39

29

62

37

27

62 

sidy), N/A (not av

and dispensing f

g only. Per capit

es in prices, dem

neficiaries’ health

t D varies wide

he national ave

NM (Region 26

fferences in pri

nt, the differenc

0.83). Relative t

NM (Region 26

nding and the M

cross reg

health s

D Relative av

vailable). 

fees. Figures (pe

ta spending is ba

mographic charac

h status as meas

ely across PDP

erage, the una

6) to 130 perce

ices and benef

ce between mi

to the national 

6) to 118 perce

Medicare progr

gions eve

status, 20

verage Part D sp

Unadjusted 

0.99

1.03

1.26

1.21

1.11

1.04

0.98

1.10

1.07

1.06

0.98

1.04

1.02

1.01

1.10

0.95

0.98

1.03

0.93

1.03

1.10

1.03

1.04

0.94

0.83

0.75

0.83

0.80

0.79

0.84

0.88

0.93

0.92

1.30

1.00

0.75

1.30

$2,768

er capita spendin

ased on full-year 

cteristics (such a

sured by medical

 regions. The n

djusted regiona

ent (1.30) in AK

ficiaries’ health

nimum and ma

average, the a

ent (1.18) in NY

ram, June 2013

en after 

011 

pending per capi

Adjuste

0.9

0.9

1.1

1.1

0.9

1.0

0.9

1.04

0.9

1.0

0.92

0.9

0.94

1.0

1.0

1.0

0.9

1.0

0.9

0.9

1.0

0.9

1.04

1.02

1.0

0.8

0.9

0.8

0.8

0.9

1.04

0.9

1.12

1.1

1.0

0.8

1.1

N/A

ng and index valu

equivalent enrol

as age, gender, 

l diagnoses used

national averag

al average per

K (Region 34). 

h status reduce

aximum decrea

adjusted averag

Y (Region 3). 

3 179

ta* 

ed**

3

6

8

5

9

8

8

4

9

0

2

8

4

6

9

3

5

3

0

5

5

5

4

2

0

3

9

9

9

7

4

8

2

6

0

3

8

A

ues) 

llment. 

d for 

ge per 

r

es the 

ases 

ge per 
180 Presc

Chart 

Top 15

Antihyperli

Antipsycho

Diabetic th

Asthma/CO

Antihyperte

Platelet ag

Peptic ulce

Antivirals 

Antidepres

Analgesics

Cognitive d

(antidem

Anticonvul

Analgesics

 antipyretic

Calcium an

regulator

Antibacteri

 Subtotal, t

 Total, all c

Note: CO

Th

no

 

Source: M

• In 20

The t

• Abou

by vo

• Eleve

Centr

cardi

list by

agen

calciu

50 pe

cription drugs

10-18. T

P

5 therapeutic

pidemics 

otics 

herapy 

OPD therapy a

ensive therapy

ggregation inhi

er therapy 

ssants 

s (narcotic) 

disorder therap

mentia) 

sants 

s (anti-inflamma

c, non-narcotic)

nd bone metab

rs 

ial agents 

top 15 classes

classes 

OPD (chronic ob

herapeutic classi

ot sum to totals d

edPAC analysis 

11, gross sp

top 15 therap

ut 1.5 billion 

olume accou

en therapeut

ral nervous s

ovascular ag

y spending, 

ts (antihype

um channel 

ercent of the

op 15 th

art D, by

c classes by

Bill

agents 

agents 

bitors 

py 

atory/ 

)

bolism 

s

bstructive pulmon

ification is based

due to rounding. 

of Medicare Par

pending on p

peutic classe

prescriptions

unting for 73 

tic classes a

system agen

gents (antihy

each accou

rlipidemics, 

blockers, an

e prescription

erapeuti

y spendin

spending 

Dollars 

ions Percen

 

$7.7 8.6%

7.6 8.4

7.3 8.0

5.8 6.5

5.0 6.3

4.1 5.2

3.6 4.4

3.3 4.2

3.2 4.0

3.1 3.9

2.6 3.5

2.3 2.9

2.1 2.3

1.7 2.2

1.5 1.9

60.8 72.4

84.9 100.0

nary disease). Vo

d on the First Dat

rt D prescription 

prescription d

es by spend

s were dispe

percent of t

are among th

nts (antipsyc

yperlipidemi

nting for abo

antihyperten

nd diuretics) 

ns in the top

c classe

ng and v

T

nt 

% Antihyp

agent

 Antihyp

 Beta-ad

 Diabeti

Antidep

 Diuretic

 Peptic 

Analge

 Calcium

 Thyroid

 Anticon

 Antibac

 Asthma

Analge

antipy

 Calcium

regul

 

 Subtot

 

 Tota

olume is the num

taBank Enhance

drug event data 

drugs cover

ding account

ensed in 201

he total. 

he top 15 ba

chotics, antic

cs, antihype

out one-fifth

nsive therap

dominate th

 15 therapeu

es of dru

volume, 2

Top 15 therap

pertensive ther

ts 

perlipidemics

drenergic bloc

ic therapy 

pressants 

cs 

ulcer therapy

esics (narcotic)

m channel bloc

d therapy 

nvulsants 

cterial agents

a/COPD thera

esics (anti-inflam

yretic, non-nar

m and bone m

ators 

tal, top 15 clas

al, all classes

mber of prescripti

d Therapeutic C

from CMS. 

red by Part D

ted for about

11, with the 

ased on both

convulsants

ertensive the

of the spend

py agents, be

he list by vol

utic classes.

gs unde

2011 

peutic classe

rapy 

ckers 

)

ckers 

apy agents 

mmatory/ 

rcotic) 

metabolism 

sses 

ions standardize

lassification Sys

D plans total

t 72 percent

top 15 thera

h spending a

, and antide

erapy agents

ding, while c

eta-adrenerg

ume, accou

.

er 

es by volume

Prescriptio

Millions Pe

157.1 10

149.0 9

95.9 6

95.1 6

84.4 5

81.2 5

74.2 4

70.8 4

65.2 4

54.3 3

43.0 2

42.0 2

40.6 2

28.3 1

24.7 1

1,105.9 73

1,511.9 100

d to a 30-day su

tem 1.0. Numbe

ed $84.9 bil

t of the total.

apeutic class

and volume. 

pressants) a

s) dominate 

cardiovascul

gic blockers,

nting for abo

e

ns 

ercent 

0.4% 

9.7 

6.3 

6.3 

5.5 

5.5 

4.8 

4.8 

4.3 

3.5 

2.8 

2.7 

2.7 

1.9 

1.8 

3.0 

0.0 

pply. 

rs may 

lion. 

ses 

and 

the 

lar 

,

out 
Chart 

Therapeu

by order o

Antihyperl

Antipsycho

Diabetic th

Asthma/CO

Antihypert

Platelet ag

 combinati

Peptic ulce

Antivirals 

Antidepres

Analgesics

Cognitive d

 antidemen

Anticonvul

Analgesic,

 antipyretic

Calcium a

Antibacter

All therap

Note: PD

pu

cla

de

re

 

Source: M

• In 20

dispe

presc

antico

perce

• Overa

(GDR

all the

• The G

80 pe

enroll

asthm

• There

antihy

and 1

most 

take a

10-19. G

cl

tic class, 

of aggregate s

ipidemics 

otics (neurolep

herapy 

OPD therapy a

ensive therap

ggregation inh

ons 

er therapy 

ssants 

s—narcotic 

disorder thera

ntia 

lsant 

, anti-inflamma

c—non-narcot

nd bone meta

rial agents 

peutic classes

DP (prescription 

ulmonary disease

assification is ba

efined as the pro

ecords are classif

edPAC analysis 

11, Part D en

ensed under P

criptions for c

onvulsants, a

ent are enroll

all, analgesic

R) (94 percen

erapeutic cla

GDR for PDP

ercent for MA

lees were ge

ma/chronic ob

e were large 

yperlipidemic

5 percentag

beneficiaries

a generic me

A 

Generic d

lasses, b

spending 

ptics) 

agents 

y agents 

ibitors and 

apy— 

atory or 

tic 

bolism regulat

s

drug plan), MA–

e). Shares are ca

ased on the First 

oportion of generi

fied as PDP or M

of Medicare Par

nrollees in sta

Part D. PDP 

classes such 

and antivirals

ed in PDPs, 

cs (narcotic) a

nt), followed b

sses. 

P enrollees av

A–PD plan en

enerally lowe

bstructive pu

differences i

cs, antivirals,

e point differ

s receiving th

edication in a

Data Book: He

dispensin

by plan t

PDP s

pres

tors 

–PD (Medicare A

alculated as a pe

DataBank Enha

ic prescriptions d

MA–PD records b

rt D prescription 

and-alone PD

enrollees ac

as antipsych

s. Low-incom

tend to be he

and antibacte

by anticonvu

verages 75 p

nrollees. Acro

r than for MA

lmonary dise

n GDRs for P

 and calcium

rences. Some

he LIS are in 

a given therap

ealth care spen

ng rate fo

ype, 201

share of all 

scriptions 

63%

82 

63 

70 

62 

67 

67 

75 

70 

71 

73 

73 

66 

64 

69 

66

Advantage–Presc

ercent of all presc

nced Therapeuti

dispensed within 

based on the con

drug event data 

DPs account

ccounted for a

hotics, cognit

e subsidy (L

eavy users o

erial agents 

lsants (86 pe

percent acros

oss the 15 th

A–PD enrolle

ease therapy

PDPs and MA

m and bone m

e of the diffe

PDPs. On a

peutic class (

nding and the M

or the to

11 

Gen

All 

67%

39 

61 

8 

83 

9 

83 

41 

83 

94 

54 

86 

83 

64 

94 

77

cription Drug [pla

criptions standar

ic Classification S

a therapeutic cla

ntract identificatio

from CMS. 

ted for 66 pe

a disproporti

tive disorder 

IS) beneficia

of drugs in th

have the hig

ercent) comp

ss all therape

herapeutic cla

ees with the e

y. 

A–PDs. The 

metabolism re

rence in the 

verage, LIS 

(see Chart 1

Medicare progr

op 15 the

neric dispens

PDPs 

62% 

39 

58 

9 

81 

7 

80 

37 

82 

94 

52 

85 

81 

60 

93 

75 

an]), COPD (chro

rdized to a 30-da

System 1.0. Gen

ass. Part D presc

on on each recor

ercent of pres

onately high 

therapy (ant

aries, of whom

ese classes.

hest generic 

pared with 77

eutic classes

asses, GDRs

exception of a

largest diffe

egulators, wi

GDRs reflec

enrollees are

0-20). 

ram, June 2013

erapeutic

sing rate 

MA–PD

75%

41 

67 

6 

87 

13 

89 

52 

87 

95 

58 

89 

86 

71 

95 

80

onic obstructive 

ay supply. Therap

neric dispensing 

cription drug eve

rd. 

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 share of 

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m about 80 

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7 percent acr

s, compared w

s for PDP 

agents for 

rences were

th between 1

cts the fact th

e less likely t

3 181

c

s 

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peutic 

rate is 

ent 

rate 

ross 

with 

 for 

11 

hat 

to 
182 Presc

Chart 

Therapeu

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Antipsycho

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Platelet ag

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Antidepres

Analgesics

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Note: LI

pr

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cription drugs

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tic class, 

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otics (neurolep

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ons 

er therapy 

ssants 

s—narcotic 

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ntia 

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, anti-inflamma

c—non-narcot

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peutic classes

S (low-income s

rescriptions stand

herapeutic Class

spensed within a

ecords based on 

sed to classify PD

edPAC analysis 

11, Part D e

ensed under 

criptions disp

hare was gr

generic disp

apeutic class

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ficiaries in a

ts and non-n

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argest differ

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ptics) 

agents 

y agents 

ibitors and 

apy— 

atory or 

tic 

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s

ubsidy), COPD (

dardized to a 30-

sification System 

a therapeutic clas

monthly LIS elig

DE records as LI

of Medicare Par

enrollees rec

Part D. In 1

pensed to LI

eater than 6

ensing rate 

ses, compare

ses, GDRs fo

all but two cla

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differences in

rence is for a

erapeutic cla

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by LIS st

LIS sha

prescrip

34

8

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5

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6

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5

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6

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44

(chronic obstruct

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ss. Part D prescr

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IS or non-LIS. 

rt D prescription 

ceiving the L

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(GDR) for no

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or non-LIS b

asses (asthm

algesics). 

n GDRs acro

antivirals (42

ass likely refl

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tatus, 20

are of 

ptions 

4%

3 

7 

8 

5 

2 

9 

5 

1 

8 

9 

2 

7 

7 

3 

4

tive pulmonary di

erapeutic classific

spensing rate is d

ription drug even

n in Part D’s den

drug event data 

IS accounte

apeutic clas

ries was gre

on-LIS bene

ercent for LI

beneficiaries 

ma/chronic o

oss classes 

2 percentage

lects differen

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11 

Gener

All 

67%

39 

61 

8 

83 

9 

83 

41 

83 

94 

54 

86 

83 

64 

94 

77

isease). Shares 

cation is based o

defined as the pr

nt (PDE) records 

ominator file. Es

and Part D deno

ed for 44 per

sses ranked 

eater than 44

eficiaries ave

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are higher t

obstructive p

between LIS

e points). So

nces in the m

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ric dispensing

LIS 

62% 

39 

54 

10 

81 

8 

78 

26 

81 

93 

52 

85 

83 

61 

93 

74 

are calculated a

on the First Data

roportion of gene

are classified as

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rcent of pres

by spending

4 percent, an

erages 79 pe

ries. Across 

than those fo

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S and non-L

ome of the d

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erapeutic

g rate 

Non-LIS

69%

43 

68 

6 

85 

10 

88 

68 

86 

95 

56 

88 

82 

66 

95 

79

s a percent of al

Bank Enhanced 

eric prescriptions

s LIS or non-LIS 

sitive to the meth

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scriptions 

g, the share 

nd in two cla

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isease thera

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ifference in 

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c

S

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hod 

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asses 

ss all 

apy 

aries. 

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ac.gov/chapte

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ov/Prescriptio

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Data Book: He

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AC’s Reports 

PAC’s Part D

ers/Mar13_Ch

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ments/Mar10_

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drugbenefits

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ealth care spen

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to the Congr

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ressional_rep

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ram, June 2013

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MedPAC’s J

uary 2007 an

 

tion on the 

OfPage 

3 183

care 

June 

nd 

 

S E C T I O N 

Other services

Dialysis 

Hospice 

Clinical laboratory 

 

Chart 

 

Total num

Dialysis

Hemodi

 

Mean num

 hemodial

 

Hospital b

Freestand

Urban 

Rural, mic

Rural, adj

Rural, not

Frontier 

For profit 

Nonprofit 

 

Note: No

co

 

Source: Co

• Betw

hosp

perce

perce

• Betw

relativ

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facilit

facilit

11-1. N

fo

in

mber of: 

s facilities 

ialysis station

mber of 

lysis stations 

based 

ding 

cropolitan 

acent to urba

t adjacent to u

onprofit includes

omparing 2007, 2

ompiled by MedP

een 2007 an

ital-based an

ent to 91 per

ent of all faci

een 2007 an

vely constan

e 2007, the n

ty has remai

ty. 

A 

umber o

or-profit 

ncreasing

ns 

per facility 

an 

urban 

s facilities designa

2011, and 2012 e

PAC from the 20

nd 2012, the

nd nonprofit 

rcent of all fa

ilities. 

nd 2012, the

nt. 

number of fa

ned relative

Data Book: He

of dialysi

and free

g 

ated as either no

end-of-year files.

007, 2011, and 20

e number of 

facilities de

acilities, and

e proportion 

acilities has i

ly constant, 

ealth care spen

is faciliti

estanding

2012

 5,811

103,092

18

Percent of

 9%

 91

 79

 13

 5

 3

 1

 85

 15

onprofit or govern

.

012 CMS Dialysi

freestanding

creased. Fre

 for-profit fa

of facilities l

increased 3

averaging a

nding and the M

es is gro

g dialysi

f total 

%

nment. Average 

is Compare endg and for-pro

eestanding f

cilities incre

ocated in ru

percent per

about 18 dial

Medicare progr

owing an

is provid

Aver

perc

2007–20

3%

4 

0.4 

–4 

4 

4 

2 

3 

3 

–1 

5 

−2 

annual percent c

-of-year files. 

ofit facilities 

facilities incr

ased from 8

ral areas ha

r year. The a

lysis treatme

ram, June 2013

nd share

ders is 

rage annual 

cent change

12 2011–2

% 2%

3

0.3

–9

4

3

1

 2

 2

 0

4

−7

change based on

increased, w

reased from 

81 percent to

as remained 

average size

ent stations 

3 187

 of 

2012 

%

n

while 

88 

o 85 

e of a 

per 
188 Othe

Chart 

Note: ES

Source: Co

• In 20

was $

mode

and E

previo

 

• Betw

Exclu

provid

spen

• Frees

of ex

1

1

Spending on dialysis, dialysis drugs, 

and other ESRD-related services 

(in billions of dollars)

r services

11-2. M

fu

d

SRD (end-stage 

ompiled by MedP

11, total spe

$10.1 billion

ernized pros

ESRD-relate

ously receiv

een 2006 an

uding items a

ders (not dia

ding was rou

standing dia

penditures in

0

2

4

6

8

10

12

Fr

Pr

Medicare 

urnished

ialysis fa

renal disease). 

PAC from the 20

ending for di

. For most fa

pective paym

ed clinical lab

ved separate

nd 2011, tota

and services

alysis facilitie

ughly 3 perc

lysis facilitie

n 2006 and 

20

reestanding

rovider based

$

8

1

spendin

d by frees

acilities, 

006 and 2011 ins

alysis, dialys

acilities, 201

ment that inc

boratory test

e payments. 

al ESRD exp

s (such as cl

es) to furnish

cent per year

es treat most

92 percent o

006

d

69%

31%

8.4

89%

1%

ng for ou

standing

2006 an

titutional outpatie

sis drugs, an

1 is the first

cludes in the

ts for which 

penditures in

linical labora

h before 201

r. 

t dialysis ben

of expenditu

utpatient 

g and hos

nd 2011 

ent files from CM

nd ESRD-re

t year that M

e payment b

facilities and

ncreased by

atory service

11, we estim

neficiaries a

ures in 2011.

dialysis

spital-ba

MS. 

elated clinica

Medicare paid

bundle certai

d clinical lab

y about 4 per

es) that Med

mate that ann

and accounte

. 

2011

$10.1

92%

8%

s services

ased 

al laboratory 

d them using

in dialysis dr

boratories 

rcent per ye

icare paid o

nual growth 

ed for 89 per

s

tests 

g a 

rugs 

ar. 

ther 

in 

rcent 
Chart 

Total 

Dialysis 

 In-center

 Home he

 Peritonea

 Unknown

Functionin

 kidney t

 

Note: ES

an

 * H

Source: Co

• Perso

numb

• In he

waste

lining

dialys

• Most 

week

incre

perce

hemo

• Func

Patie

kidne

and t

11-3. T

p

r hemodialysis

emodialysis* 

al dialysis* 

n

ng graft and 

transplants 

SRD (end-stage 

nd non-Medicare

Home dialysis m

ompiled by MedP

ons with ES

ber of ESRD

modialysis, 

es and extra

g of his or he

sis. 

ESRD patie

k. Between 2

ased by 4 pe

ent annually

odialysis, the

tioning graft

ents undergo

ey donation. 

the remainde

A 

he ESRD

atients u

Patient

(thousan

393.0

284.2

s 255.5

2.2

25.3

1.1

108.8

renal disease). T

e patients. 

ethods. 

PAC from the Un

RD require e

D patients inc

a patient’s b

a fluids. In pe

er abdomen 

ents undergo

2000 and 20

ercent annu

. Although o

e number of 

t patients are

oing kidney t

In 2010, abo

er were from

Data Book: He

D popula

undergo 

2000

ts 

ds) Perce

0 100%

2 72

5 65

2 1

3 6

 0.3

8 28

Totals may not e

nited States Rena

either dialys

creased by 4

blood flows t

eritoneal dia

as a filter. P

o hemodialys

10, the total

ally while th

only a small p

these patien

e patients wh

ransplant m

out 35 perce

m cadaver do

ealth care spen

ation is g

dialysis

 Patie

ent (thous

% 508

357

327

2

26

1

151

equal sum of com

al Data System.

is or a kidne

4 percent an

through a ma

lysis, the pa

Peritoneal dia

sis administ

 number of i

e number of

proportion of

nts grew 10

ho have had

ay receive e

ent of transp

onors. 

nding and the M

growing, 

2006

ents

sands) Pe

8.9 10

7.4 7

7.7 6

2.6

6.2

1.0 0

1.5 3

mponents due to 

ey transplant

nnually betwe

achine with 

atient’s blood

alysis is the 

tered in a dia

in-center he

f peritoneal d

f all dialysis 

percent per 

d a successf

either a living

planted kidne

Medicare progr

and mos

 Pa

rcent (tho

00% 5

70 4

64 3

1

5

0.2

30 1

rounding. Data i

t to maintain

een 2000 an

a special filt

d is cleaned 

most comm

alysis facility

modialysis p

dialysis patie

patients und

r year during

ful kidney tra

g kidney or a

eys were fro

ram, June 2013

st ESRD

2010

atients 

ousands) Pe

594.4 1

415.0 

378.5 

5.5 

29.8 

1.3 0

79.4 

nclude both Med

n life. The tot

nd 2010. 

ter that remo

by using the

on form of h

y three times

patients 

ents increas

dergo home

g this time pe

ansplant. 

a cadaveric 

m living don

3 189

D

ercent

00% 

70 

64 

1 

5 

0.2 

30 

dicare 

tal 

oves 

e

home 

s a 

sed 2 

e

eriod. 

nors 
190 Othe

Chart 

Total (n =

Age (yea

 0–19 

 20–44 

 45–64 

 65–79 

 80+ 

Sex 

 Male 

 Female

Race/eth

 White 

 African 

 Native A

 Asian A

 

 Hispani

 Non-His

Underlyin

 Diabete

 Hyperte

 Glomer

 Other ca

Note: ES

th

Source: Co

 

• Amon

• Diabe

• The n

Amon

r services

11-4. A

f

 594,374) 

rs) 

 

nicity 

American 

American 

American 

c 

spanic 

ng cause of E

es 

ension 

ulonephritis 

auses 

SRD (end-stage 

ose who underg

ompiled by MedP

ng ESRD pa

etes is the m

number of E

ng the fastes

Asian Am

fastest g

ESRD 

renal disease). T

o maintenance d

PAC from the Un

atients, 37 pe

most commo

SRD patient

st growing g

mericans

rowing s

P

i

Totals may not e

dialysis and those

nited States Rena

ercent are o

n cause of r

ts increased

roups of pat

s and His

segment

Percent

of total

in 2010

100%

1

 17

 45

 28

 9

 57

 43

 61

 32

 1

6

 16

 84

 38

 25

 15

 23

equal sum of the 

e who have a fun

al Data System.

ver age 65. 

renal failure.

d by 4 percen

tients are As

spanics a

ts of the 

components due

nctioning kidney 

About 61 pe

nt annually b

sian America

are amon

ESRD po

Av

 pe

2

e to rounding. ES

transplant. 

ercent are W

between 200

ans and Hisp

ng the 

opulatio

verage annua

ercent change

2005–2010

4% 

1 

1 

5 

5 

5 

4 

4 

4 

4 

4 

8 

7 

4 

4 

4 

2 

4 

SRD patients inc

White. 

05 and 2010

panics. 

n 

l 

e

clude 

0. 
Chart 

Source: Co

• As th

open

• Betw

annu

50

1,00

1,50

2,00

2,50

3,00

3,50

4,00

4,50

5,00

5,50

6,00

6,50

Dialysis facilities

11-5. D

an

ompiled by MedP

e number of

ing new faci

een 2007 an

ally, and the

0

00

00

00

00

00

00

00

00

00

00

00

00

00

A 

Dialysis fa

nd 2012 

PAC from the Dia

f dialysis pat

ilities. In 201

nd 2012, the

e number of 

4,923

85.5

2007

Data Book: He

acilities’

alysis Compare d

tients has gr

12, an avera

e total numbe

hemodialysi

3

ealth care spen

 capacity

database from C

rown, dialysi

ge facility ha

er of dialysis

is stations g

nding and the M

y increas

CMS. 

is providers 

ad about 18 

s facilities gr

rew by 4 pe

5,811

103.1

2012

Dialysis fac

Hemodialy

Medicare progr

sed betw

have met th

hemodialys

rew by abou

rcent annua

cilities

sis stations

ram, June 2013

ween 200

he demand b

sis stations.

t 3 percent 

ally. 

0

20

40

60

80

100

120

140

3 191

07 

by Hemodialysis stations (in thousands)
192 Othe

Chart 

 

Age (yea

Under 45 

45–64

65–74

75–84

85+ 

Sex 

 Male 

 Fema

Race 

 White

Africa

All oth

Residenc

 Urban

 Rural 

 Rural 

 Rural 

 Fronti

Prescript

 Enroll

 Cover

 Cover

 No cr

 LIS 

Medicare 

Dually elig

Note: FF

50

po

ad

sq

 

Source: M

• Comp

Africa

• In 201

• Nearly

• Medic

were 

disea

• About

credit

r services

11-6. C

p

rs) 

4

4

4

ale 

e

an American 

her 

ce 

n county 

county, micro

county, adjac

county, not a

ier county 

tion drug cov

led in Part D 

rage through 

rage through 

editable cove

as the secon

gible for Medi

FS (fee-for-servic

0,000 or more po

opulation, rural c

djacent to urban 

quare mile. Total

edPAC analysis 

pared with all 

an American. 

11, about 20 p

y half of all di

care was the s

insured by an

se. 

t 90 percent o

table drug cov

Character

atients, 2

 

opolitan 

cent to urban

adjacent to ur

verage statu

plan 

employers th

other credita

erage 

ndary payer 

icaid 

ce). RDS (retiree

opulation, rural m

ounties adjacent

areas do not hav

s may not sum to

of dialysis claim

Medicare pat

percent of FF

alysis patient

secondary pa

n employer gr

of FFS dialysi

verage. 

ristics of

2011 

rban 

s 

hat receive RD

ble sources

e drug subsidy), L

micropolitan coun

t to urban areas 

ve a city of 10,00

o 100 percent du

s files and denom

tients, FFS di

FS dialysis pa

ts were dually

ayer (for Part 

roup health pl

s patients we

f Medica

DS

LIS (low-income 

nties contain at le

do not have a cit

00 people. Fronti

ue to rounding. 

minator files from

alysis patient

tients resided

y eligible for M

A and Part B

lan at the time

ere enrolled in

are fee-fo

Percent of a

subsidy). Urban

east one cluster o

ty of 10,000 peo

ier counties are c

m CMS. 

ts are disprop

d in a rural co

Medicare and

) for 9 percen

e they were d

n Part D plans

or-servic

all FFS dialysi

12% 

38 

25 

19 

7 

54 

46 

50 

36 

14 

81 

11 

5 

3 

1 

72 

 9 

 8 

11 

58 

9 

47 

n counties contai

of at least 10,000

ple in the county

counties with six

portionately yo

ounty. 

 Medicaid ser

nt of FFS dialy

diagnosed wit

s or had othe

e dialysi

s patients 

n a core area wit

0 and less than 5

y, and rural count

x or fewer people

ounger and 

rvices. 

ysis patients 

th end-stage r

r sources of 

is 

th 

50,000 

ties not 

 per 

who 

renal 
 Chart

Type of fa

All facilitie

Urban 

Rural 

LDOs 

Non-LDO

 

Note: LD

Source: Co

• For 2

was 2

• Beca

Medi

2011

reflec

mode

dialys

• In 20

dialys

treatm

comp

highe

t 11-7. A

d

acility 

es 

s 

DO (large dialysi

ompiled by MedP

2010, the agg

2.3 percent. 

ause 2011 di

care margin

 Medicare c

cts a more c

ernized paym

sis facility be

10 and in ea

sis organiza

ment and dru

posite rate co

er for the two

A 

Aggregate

ialysis fa

s organization). 

PAC from 2010 c

gregate Med

alysis cost r

 of 2 percen

laims data fo

onservative 

ment bundle

ecause 2011

arlier years, 

tions. This fi

ug payment 

ost per treat

o largest cha

Data Book: He

e margin

acility, 20

Percentage o

going to fre

Margins include 

cost reports and 

dicare margi

reports are n

nt to 3 percen

or freestand

assumption

. We did not

1 cost report

we see high

inding stems

per treatme

tment was lo

ains. 

ealth care spen

ns vary b

010 

of Medicare p

eestanding fa

100%

85

15

69

31

payments and c

the 2010 institut

in for compo

not yet availa

nt. This estim

ing dialysis f

 about the e

t stratify the 

t data were n

her margins f

s from differe

ent. Compare

ower and the

nding and the M

by type o

payments

acilities

costs for compos

tional outpatient f

osite rate ser

able, we est

mate is base

facilities. Th

efficiencies a

2011 Medic

not available

for facilities 

ences in the

ed with their

e drug paym

Medicare progr

of freesta

Ag

ite rate services 

file from CMS. 

rvices and in

imate a rang

ed on 2010 c

he lower end

anticipated u

care margin 

e. 

affiliated wit

e composite 

r counterpart

ent per treat

ram, June 2013

anding 

ggregate marg

2.3% 

3.4 

−3.7 

3.4 

0.1 

and injectable d

njectable dru

ge for the 20

cost reports 

d of the range

under the 

by type of 

th the two la

rate cost pe

ts, the 

tment was 

3 193

gin 

rugs. 

ugs 

011 

and 

e

argest 

er 
194 Othe

Chart 

Beneficiar

(in millio

Medicare 

Average l

among 

Median le

among 

Note: Av

to

ch

ca

 *A

Source: M

An

• The n

betwe

care 

• After 

betwe

• Total

incre

r services

11-8. M

su

ries in hospic

ons) 

payments (in

ength of stay 

decedents (in

ength of stay 

decedents (in

verage length of 

tal number of da

hange in the num

alculated using th

Average annual p

edPAC analysis o

nalytic File from C

number of M

een 2000 an

has increase

growing from

een 2010 an

 Medicare p

ased hospic

Medicare 

ubstanti

2

e 0

n billions) 

n days) 

n days) 

stay is calculate

ays the decedent

mber of hospice u

he yearly data dis

percent change. 

of the denominato

CMS. 

Medicare ben

nd 2010 and

ed. 

m 54 days in

nd 2011. 

ayments to 

ce enrollmen

hospice

ally from

2000

0.534

$2.9

54

17

ed for decedents 

 was enrolled in 

users and total sp

splayed in the ch

or file, the Medica

neficiaries re

 continued t

n 2000 to 86

hospices mo

nt and longer

e use and

m 2000 to

2010

1.159

$13.0

86

18

who used hospic

the Medicare ho

pending displaye

hart due to round

re Beneficiary Da

eceiving hosp

to grow in 20

6 days in 201

ore than qua

r lengths of s

d spendi

o 2011 

2011

1.219

$13.8

86

17

ce at the time of 

ospice benefit du

ed in the chart m

ding. 

atabase, and the 1

pice service

011, sugges

10, average 

adrupled from

stay. 

ing grew

Change, 

2000–2010

8.1%* 

16.2%* 

4.8%* 

+1 day 

death or before 

ring his/her lifetim

ay not equal the

100 percent hosp

es more than

ting that acc

length of sta

m 2000 to 2

w

Chang

0 2010–2

5.2%

6.8%

0.0%

–1 da

death and reflec

me. The percent

 percent change

ice claims Standa

n doubled 

cess to hosp

ay held stea

011 due to 

ge, 

2011 

%

%

%

ay 

cts the 

t

ard 

pice 

ady 
Chart 

 

All 

FFS bene

MA benef

Dual eligib

Non–dual

Age (yea

 <65 

 65–84 

 85+ 

Race/eth

 White 

 Minority

Gender 

 Male 

 Female

Beneficia

 Urban 

 Micropo

 Rural, a

 Rural, n

 Frontier

 

Note: FF

U

po

Source: M

• Hosp

propo

• Desp

chara

eligib

11-9. H

fr

eficiaries 

ficiaries 

bles 

 eligibles 

rs) 

nicity 

y

ary location 

olitan 

adjacent to ur

nonadjacent to

r

FS (fee-for-servic

rban, micropolita

opulation density

edPAC analysis 

pice use grew

ortion of ben

pite this grow

acteristics. M

ble, or lived i

A 

Hospice u

rom 2000

Pe

2

2

2

30

1

24

1

24

2

23

1

22

23

24

18

ban 1

o urban 15

13

ce), MA (Medica

an, and rural des

y equal to or less

of data from the

w in all bene

neficiaries us

wth, hospice 

Medicare dec

n an urban a

Data Book: He

use incre

0 to 2011

ercent of dece

000 

2.9%

1.5 4

0.9 4

7.5 

4.5 4

7.0 

4.7 4

1.4 

3.8 4

7.3 

2.4 4

3.3 4

4.3 4

8.5 

7.6 

5.8 

3.2 

re Advantage). B

ignations are bas

 than six persons

e denominator file

eficiary group

sing hospice

use continu

cedents who

area were m

ealth care spen

eased ac

1

edents using h

2010

44.0%

43.0

47.8

39.2

45.5

27.2 

42.6 

50.4 

45.8

33.6 

40.4

47.2

45.5

39.8

38.7

34.5

30.1

Beneficiary locati

sed on the urban

s per square mile

e and the Medica

ps in 2011, c

e at the end o

ed to vary b

o were older

more likely to

nding and the M

cross ben

A

hospice

2011

45.2%

44.2

48.9

40.3

46.8

27.8 

43.7 

52.0 

47.0

35.1 

41.3

48.6

46.6

41.4

40.2

35.9

30.7

ion reflects the b

n influence codes

e. 

are Beneficiary D

continuing th

of life. 

by demograp

r, White, fem

o use hospice

Medicare progr

neficiary

Average annu

percentage 

point change

2000–2010 

2.1% 

2.2 

1.7 

2.2 

2.1 

1.0 

1.8 

2.9 

2.2 

1.6 

1.8 

2.4 

2.1 

2.1 

2.1 

1.9 

1.7 

beneficiary’s coun

s. The frontier ca

Database from C

he trend of a

phic and ben

male, MA enr

e than their 

ram, June 2013

y groups

ual 

 Perce

e point ch

 2010–

1.

1.

1.

1.

1.

0.

1.

1.

1.

1.

0.

1.

1.

1.

1.

1.

0.

nty of residence.

ategory is defined

MS. 

a growing 

neficiary 

rollees, not d

counterparts

3 195

s

ntage 

hange 

–2011 

.2% 

.2 

.1 

.1 

.3 

.6 

.1 

.6 

.2 

.5 

.9 

.4 

.1 

.6 

.5 

.4 

.6 

.

d as 

dual 

s. 
196 Othe

Chart 

All hospic

For profit 

Nonprofit 

Governme

Freestand

Hospital b

Home hea

SNF base

Urban 

Rural 

Note: Th

we

M

Source: M

fro

• There

profit

• Betw

1,300

• Grow

home

• The n

2000

years

perce

areas

r services

11-10. 

ces 

ent

ding 

based 

alth based 

ed 

he hospice provid

e used different d

edicare beneficia

edPAC analysis 

om CMS. 

e were nearl

t hospices. 

een 2000 an

0 providers. 

wth in the num

e-health-bas

number of ho

, although th

s. The share

ent) is simila

s. 

Number 

increase

2000

2,25

672

1,32

25

1,06

78

37

2

1,424

78

der counts show

data sources, wh

aries. Numbers m

of Medicare cos

ly 3,600 Med

nd 2011, the

For-profit ho

mber of prov

sed providers

ospices in ru

he number o

e of hospices

ar to the shar

of Medic

ed due to

0

5

2

3

8

9

5

9

1 

4

8

wn in this chart dif

hich we believe m

may not sum to t

st reports, Provid

dicare-partic

e number of 

ospices acco

viders has o

s. The numb

ural and urba

of hospices i

s located in r

re of Medica

care-par

o growth

2009

3,385

1,834

1,324

227

2,282

634

447

22

2,323

1,005

ffer from the cou

more accurately 

totals because of

er of Services fil

cipating hosp

Medicare-pa

ounted almo

ccurred pred

ber of hospit

an areas wa

n rural areas

rural areas (

are beneficia

rticipatin

h in for-p

20

3,4

1,9

1,3

2

2,3

6

4

2,4

1,0

unts show in prior

capture the num

f missing data fo

e, and the Stand

pices in 201

articipating h

ost entirely fo

dominantly a

tal-based pro

as substantia

s declined m

(28 percent) 

aries residing

ng hospic

rofit hos

010

498

954

319

225

397

612

466

23

430

002

r years’ chart boo

mber and type of 

or a small numbe

dard Analytic File

1. Most of th

hospices gre

or that growt

among frees

oviders has 

ally higher in

modestly in th

and urban a

g in these tw

ces has 

spices 

2011 

3,585 

2,052 

1,308 

225 

2,485 

597 

480 

23 

2,534 

985 

oks because this

hospices serving

er of providers. 

e of hospice claim

hem were fo

ew by more t

th. 

standing and

declined. 

n 2011 than 

he past few 

areas (72 

wo types of 

s year 

g

ms 

orthan 

d

in 
Chart 

Cancer (e

Debility, N

Circulator

Lung canc

Heart failu

Unspecific

Alzheimer

Chronic a

Dementia

Organic p

Respirato

Genitourin

Nervous s

Digestive 

Other 

All 

Note: NO

of

no

Source: M

Da

• In 20

cance

Alzhe

perce

and o

• Leng

Alzhe

unsp

were 

cance

11-11. 

2

except lung ca

NOS 

ry, except hea

cer 

ure 

c symptoms/s

r’s and simila

airway obstruc

a

psychoses 

ory disease 

nary disease 

system, excep

disease 

OS (not otherwis

f cases by diagno

ot sum to figures

edPAC analysis 

atabase. 

11, the mos

er, accountin

eimer’s disea

ent of cases)

other circula

th of stay va

eimer’s disea

ecific signs a

least comm

er. 

A 

Hospice

2011 

ancer) 

art failure 

signs 

r diseases 

ction, NOS 

pt Alzheimer’s

se specified). Ca

osis does not sum

cited in the text 

of 100 percent h

t common te

ng for about 

ase, dement

); debility an

tory conditio

aries by diag

ase, dement

and symptom

mon among b

Data Book: He

 cases a

s

ses include all p

m to 100 due to 

below due to rou

hospice claims S

erminal diag

28 percent 

tia, organic p

nd unspecific

ons (17 perce

gnosis. Near

tia, organic p

ms had leng

beneficiaries

ealth care spen

and lengt

Diagnosis

of total c

20%

11

10

8

7

6

6

6

5

4

3

3

3

2

1

100

atients who rece

the exclusion of 

unding. 

Standard Analytic

nosis among

of cases. Th

psychoses, a

c signs and s

ent of cases

ly one-quart

psychoses, c

gths of stay e

s with genitou

nding and the M

th of stay

s share

cases

%

eived hospice car

patients with mu

c File from CMS a

g Medicare 

he next mos

and other ne

symptoms (1

s). 

ter or more o

chronic airw

exceeding 1

urinary disea

Medicare progr

y, by dia

Percent 

leng

greater t

re in 2011, not ju

ultiple diagnoses

and the Medicar

hospice pati

st common d

eurological c

17 percent); 

of hospice p

way obstructi

80 days. Lo

ase, digestiv

ram, June 2013

agnosis,

of cases with

th of stay 

han 180 days

9% 

24 

18 

8 

20 

23 

35 

26 

30 

28 

10 

5 

31 

7 

9 

20 

ust decedents. P

. Share of cases

re Beneficiary 

ients was 

diagnoses we

conditions (1

and heart fa

atients with 

on, debility, 

ng hospice s

ve disease, a

3 197

h

s 

ercent 

s may 

ere 

18 

ailure 

and 

stays 

and 
198 Othe

Chart 

Note: Da

of

life

Source: M

• Since

amon

2000

slowe

incre

• Short

held s

perce

0

50

100

150

200

250

300

Length of stay (days)

r services

11-12. 

ata reflect hospic

f stay reflects the

etime. 

edPAC analysis 

e 2000, long

ng decedent

, an increas

er in recent y

ased 1 day b

t stays in ho

steady at 17

entile has re

3 3

10th perce

2000

2010

2011

Growth i

patients 

ce length of stay 

e total number of 

of the denomina

 hospice sta

ts at the 90th

e of 100 day

years than e

between 201

spice have c

7 or 18 days 

mained at 5 

6 2

entile 25th

in length

with the

for Medicare de

days the decede

ator file and the M

ays have gro

h percentile 

ys. Growth in

earlier in the 

10 (240 days

changed littl

from 2000 t

or 6 days s

5 5

h percentile

h of stay 

e longest

cedents who use

ent was enrolled 

Medicare Benefic

own longer. F

was 241 day

n length of s

period. The

s) and 2011

e since 2000

to 2011. Hos

ince 2000. 

17 18

Median

among 

t stays s

ed hospice at the

 in the Medicare

ciary Database fr

For example

ys in 2011 c

stay at the 90

e 90th percen

 (241 days).

0. The medi

spice length 

56

17

n 75th 

hospice 

slowed in

e time of death o

 hospice benefit 

rom CMS. 

e, hospice le

compared wi

0th percentil

ntile of lengt

. 

ian length of

of stay at th

77 78

percentile

n 2011 

or before death. L

during his or her

ength of stay

ith 141 days

le has been 

th of stay 

f stay in hos

he 25th 

141

240 24

90th percen

Length 

r

y

s in 

pice 

41

ntile
Chart 

Beneficia

 Diagnos

 Cancer 

 Neurolo

 Heart/ci

 Debility 

 COPD 

 Other 

 Site of s

 Home 

 Nursing

Assisted

 Hospice

Hospice

 For prof

 Nonprof

 Freesta

 Home h

 Hospita

Note: CO

in 

ho

 

Source: M

ho

• Hosp

of this

(e.g.,

(e.g. 

• Bene

bene

• Bene

have 

facilit

• For-p

provid

11-13. 

ary

sis 

ogical 

irculatory 

service 

g facility 

d living facility

e facility or ho

fit 

fit

anding 

health based 

al based 

OPD (chronic ob

2010 and used 

ospice benefit du

edPAC analysis 

ospice cost repor

pice average

s variation re

 at the 90th 

at the 10th o

eficiaries with

ficiaries with

eficiaries who

longer stays

ty or hospita

profit and fre

der-based h

A 

Hospice

beneficia

Av

 of s

y

ospital 

bstructive pulmon

hospice that yea

uring his or her lif

of 100 percent h

rts, and Provider

e length of st

eflects differ

percentile). 

or 50th perc

h neurologic

h cancer hav

o receive ho

s on average

l. 

estanding h

hospices. 

Data Book: He

 length o

ary and 

verage length

stay (in days)

52

137

74

97

107

86

88

111

149

15

102

69

89

68

61

nary disease). Av

ar and reflects the

fetime. 

hospice claims S

r of Services file 

tay varies by

rences in len

Length of st

entile). 

cal conditions

ve the shorte

ospice servic

e than bene

ospices hav

ealth care spen

of stay a

hospice 

) 10

verage length of 

e total number of

Standard Analytic

data from CMS.

y both benef

ngth of stay a

tay varies m

s, COPD, an

est stays on 

ces in assiste

ficiaries who

ve longer ave

nding and the M

mong de

characte

Length of sta

0th

3

3

2

3

2

2

4

3

5

2

3

2

2

2

2

stay is calculate

f days the deced

c File data, Medic

ficiary and pr

among patie

much less for

nd debility ha

average. 

ed living fac

o receive ca

erage length

Medicare progr

ecedents

eristics, 

ay percentiles

50th 

17 

25 

11 

23 

20 

13 

26 

21 

50 

4 

21 

14 

17 

15 

14 

ed for Medicare b

dent was enrolled

care Beneficiary 

rovider char

ents with the

r patients wit

ave the long

ilities and nu

re at home o

hs of stay tha

ram, June 2013

s, by 

2011 

s (in days) 

90th

126

423

210

280

316

251

231

332

423

19

295

184

251

183

160

beneficiaries who

d in the Medicare

Database, Medi

racteristics. M

e longest sta

th shorter sta

gest stays, w

ursing faciliti

or in a hospi

an nonprofit 

3 199

o died 

e

care 

Most 

ays 

ays 

while 

ies 

ice 

and 
200 Othe

Chart 

All hospic

Beneficiar

 Days

 Days

 Days

Beneficiar

 

Note: LO

if 

ca

Source: M

fro

• In 20

$8 bi

• Abou

addit

r services

11-14. 

2

ce users in 20

ries with LOS

s 1–180 

s 181–365 

s 366+ 

ries with LOS

OS (length of sta

the beneficiary is

alendar year 201

edPAC analysis 

om CMS. 

11, Medicar

llion, more th

ut $2.7 billion

ional hospic

More tha

2011 wa

days 

11 

S > 180 days 

S ≤ 180 days 

ay). LOS reflects 

s not enrolled in 

1. Numbers do n

of 100 percent h

re hospice sp

han half of a

n, or nearly 2

ce care for pa

an half o

s for pat

the beneficiary’s

hospice at the en

not sum to total d

hospice claims S

pending on p

all Medicare 

20 percent, o

atients who 

of Medica

tients wit

Med

s lifetime LOS as

nd of 2011). All s

due to rounding. 

Standard Analytic

patients with

hospice spe

of Medicare 

had already

are hosp

th stays 

dicare hospic

2011 (in

$13

7

2

2

2

5

s of the end of 20

spending reflecte

c File data and th

h stays exce

ending that y

hospice spe

y received at

pice spen

exceedi

ce spending, 

n billions) 

3.8 

7.9 

2.6 

2.5 

2.7 

5.9 

011 (or at the tim

ed in the chart oc

he common Medi

eeding 180 d

year. 

ending in 20

t least 1 yea

nding in

ing 180

me of discharge in

ccurred only in 

icare enrollment 

days was ne

11 was on 

r of hospice

n 2011 

file 

arly 

. 
Chart 

 

All 

Freestand

Home hea

Hospital b

For profit 

Nonprofit 

Governme

Urban 

Rural 

Below cap

Above ca

Above ca

 cap ove

 

Note: N/

sp

no

ou

Source: M

Pr

• The a

• Marg

servic

perce

assoc

• Frees

base

indire

the a

• In 20

marg

frees

• Hosp

limit) 

11-15. 

ding 

alth based 

based 

ent

p

p 

p (including 

erpayments) 

/A (not available

pecifically indicat

ot sum to 100 by 

ut separately. Pe

edPAC analysis 

rovider of Service

aggregate M

in estimates

ces and volu

entage point

ciated with f

standing hos

d) hospices 

ect costs are

llocation of o

10, for-profit

in for nonpro

tanding had

pices that ex

had a marg

A 

Hospice

Percent o

hospices

(2010) 

100% 

69 

13 

17 

56 

38 

14 

71 

29 

89.9 

10.1 

10.1 

). Margins for all 

ted. Margins are 

freestanding/pro

ercent of hospice

of Medicare hos

es data from CM

Medicare ma

s do not inclu

unteers (whi

ts, respective

fundraising. 

spices had h

in part due t

e higher than

overhead fro

t hospice ma

ofit hospices

 a higher ma

ceeded the 

in of more th

Data Book: He

 aggrega

of 

s 

2004

5.0%

8.3

3.1

–11.6

11.8

0.3

N/A

5.9

–2.3

5.6

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