Billing of hospitals varies significantly across states. It is the reason there are varied Medicare reimbursement rates across states in the United States of America. For the same service such as implant, a hospital in Alabama charges quite different amount from the one charged in New York. Even the data released by the government indicates that hospitals normally charge quite different amounts for the same services across counties and states. These amounts are also significantly different from what Medicare typically reimburses (Duggan, Starc & Vabson, 2016). It is a revelation that has raised huge questions among researchers regarding the models use by hospitals in pricing their Medicare services. The interest of researchers is simply establishing the reason there are sharp differences in the Medicare reimbursement rates across counties and states in the United States of America for the same service procedures.
The government has been struggling to fathom these differences and it explained that it is an indicator of some patients requiring longer hospitalization because of the intensity of their illnesses. However, despite this explanation, there is no sufficient explanation based on research hence the hot debate that is now in the air (Glance, Kellermann, Osler, Li, Li & Dick, 2016). The main question is some of the factors that influence difference in the Medicare reimbursement rates in various regions of the country. It is important to note that Medicare does not pay the amount charged by a hospital to a patient (Glance, Kellermann, Osler, Li, Li & Dick, 2016). However, Medicare does apply a system of standardized payments to make reimbursements to hospitals for offering treatment of specific health conditions. This scenario applies also to private insurers. Importantly, the patients who are covered by Medicare are not affected by the charges of hospitals on their conditions treated.
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From the data provided, it is evident that there are significant differences in the Medicare reimbursements rates of Alabama and New York. The big question is what main factor influences the differences in Medicare reimbursement rates across regions of the country. For this specific paper, the first variable selected is Medicare enrollee. The second variable is the price of services offered. The hypothesis developed for this analysis is Medicare reimbursement rates are significantly affected by the price of the treatment services offered in a given hospital. These two variables will help determine the factor that mainly influences the variation in the Medicare reimbursement rates across regions. It is important to observe that the Medicare enrollee is the specific hospital where customers go to get healthcare services.
These variables are selected because price appears to be the main influential factor in terms of affecting the ultimate Medicare reimbursement rates of hospitals. Each hospital has got its unique method of pricing healthcare services. A lot of those hospitals whose rates significantly vary from the Medicare standard ones explain that it is caused by the higher charges brought about by the long durations of the sick people. These longer durations in the hospital cause higher prices for the same procedures outlined by Medicare (Glance, Kellermann, Osler, Li, Li & Dick, 2016). The two variables are selected because they are the main subjects of the current hot debate that has also drawn the attention of researchers who wish to inform policy makers on the right measures to take if harmony has to be achieved.
References
Duggan, M., Starc, A., & Vabson, B. (2016). Who benefits when the government pays more? Pass-through in the Medicare Advantage program. Journal of Public Economics , 141 , 50-67.
Glance, L. G., Kellermann, A. L., Osler, T. M., Li, Y., Li, W., & Dick, A. W. (2016). Impact of risk adjustment for socioeconomic status on risk-adjusted surgical readmission rates. Annals of surgery , 263 (4), 698-704.
