Medicare should employ new data sources, methods to ensure accuracy of geographic adjustments to payments

Geographic adjustments to Medicare payments are intended to accurately and equitably cover regional variations in wages, rents, and other costs incurred by hospitals and individual health care practitioners, but almost 40 percent of hospitals have been granted exceptions to how their adjustments are calculated, finds a new report from the Institute of Medicine. The rate of exceptions strongly suggests that the mechanisms underlying the adjustments are inadequate, noted the committee that wrote the report.

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