The primary goal of the study was to examine how sensitive the “empirical level” of the indirect medical education (IME) adjustment as reported by MedPAC is to model specification. A second goal was to examine if the IME coefficient varies by hospital characteristics, such as whether or not a hospital is an academic medical center (AMC).
Data from hospital cost reports and the 2008 and 2010 Final Rule Impact File were used to complete the analysis. Our base model included case-mix indexes (CMIs) and payment parameters from the 2008 Final Rule Impact File. The findings confirm those of MedPAC; for 2008, the empirical level of the teaching adjustment was around 2.0 percent. Including measures of outlier payments as an explanatory variable (right-hand side) significantly impacts the findings. The inclusion of DSH in the models generally reduces the IRB coefficient, but the impact was not large. AMCs were estimated to have an IRB coefficient that was roughly 25 percent higher than the empirical level at the average. For non-AMCs the IRB coefficient is less than half the coefficient for AMCs. We found some variation in the impact of IRB on hospital costs for hospitals of different sizes, although the relationship is not linear.
Services : Payment Policy & Delivery System Innovation Expertise: Medicare
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