Medicare Part A Decoded


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This analysis identifies general trends and top performers within each segment of Medicare Part A (hospital care) to provide a better understanding of how Medicare has changed in recent years. A steady rise in health care costs appears to be favoring large organizations and driving a shift from billing procedures as inpatient to outpatient services.

What is Medicare?

Medicare is a federal health insurance program that covers people who are 65 or older, younger people with certain disabilities, and people who have End-Stage Renal Disease (ESRD). It exists primarily to provide medical benefits to people of retired age who would otherwise have difficulty in paying for healthcare.

What are the components of Medicare today?

The four parts that Medicare is split into are:

  • Part A – Hospital Insurance: Covers most hospital, skilled nursing facility, home health, and some outpatient care.
  • Part B – Medical Insurance: Covers most outpatient care.
  • Part C – Medicare Advantage: Medicare Part A & B services provided by third party companies.
  • Part D – Drug Insurance: Provided by third party companies that have government contracts.

This analysis provides a general overview of Medicare Part A and points out some important trends in the market over the last six years.


Medicare Part A organizations and definitions?

  • Medicare Part A (Hospital Care) data is categorized into five different organization types. These are:
  • Inpatient (INP) – For patients that have been formally admitted by a doctor (usually results in an overnight stay)
  • Outpatient (OUT)* – For patients who have not been admitted as inpatient by a doctor
  • Home Health Aide (HHA) – For patients who need help with their daily activities around their house
  • Skilled Nursing Facilities (SNF) -For patients that need inpatient nursing care but do not need to be admitted to a hospital
  • Hospice – Care for terminally ill patients
  • National Provider Identifier (NPI)-an identification number for covered healthcare providers; the services the health care providers handle determines what type of organization they are.
  • Patient Count- number of patients a provider saw
  • Total Payment Amount- the total amount Medicare paid to an NPI for the services it provided  
  • Total Charge Amount- the total amount a provider charged Medicare for the services it provided

*Although most outpatient services fall under Part B, there is a Part A component which is included in our data set. This part A component is the result of inpatient facilities billing under outpatient care.

 

How has Medicare spending changed over the last 6 years?

This analysis focuses exclusively on Part A data spanning from 2010 to 2015. Patient count and total payment amount are examined for each organization by National Provider Identifier (NPI) number. These measures are further studied across the five different segments of Medicare Part A with the aim of determining the key trends in the market.

 

Medicare Part A Overview:

Total Payments (2015) Payment Annual Growth (2010-15) Patient Count Annual Growth (2010-15) Total Count of NPIs (2015)
$243.8B 1.2% 1.1% 56,600
  • Part A spend and patient count follow similar trends to inflation and general population growth
  • Since 2010 HHA and SNF trends have been nearly flat.
  • Since 2010 OUT and Hospice care have experienced significant growth
  • INP has experienced slow but steady decline

In 2015, we observed the following patient counts and total payment amounts across the 5 organization types.

Inpatient Highlights:

Total Payments (2015) Payment Annual Growth (2010-15) Patient Count Annual Growth (2010-15) Count of Organization NPI (2015)
$119.6B -0.58% -2.08% 7,880
  • The number of patients and total payment amount have fallen slowly but consistently since 2010
    • INP spend is down nearly $4 billion compared to 2010.
    • INP saw approximately 900k fewer patients in 2015 than in 2010.
  • Medium market concentration (top 10% of Inpatient organizations have a 53% market share).

Top 10 Inpatient Organizations (2015):

Org Name Total Payment Amount Patient Count Distinct count of Npi
THE NEW YORK AND PRESBYTERIAN HOSPITAL NEW YORK – PRESBYTERIAN HOSPITAL $622M 18,577 6
CEDARS-SINAI MEDICAL CENTER $418M 12,855 2
ADVENTIST HEALTH SYSTEM-SUNBELT INC FLORIDA HOSPITAL $380M 22,499 1
THE JOHNS HOPKINS HOSPITAL $353M 8,476 1
GENERAL HOSPITAL CORPORATION $347M 12,552 1
YALE-NEW HAVEN HOSPITAL $344M 13,450 3
STANFORD HOSPITAL AND CLINICS STANFORD MEDICAL CENTER $309M 7,193 1
MOUNT SINAI HOSPITAL $300M 9,229 3
MONTEFIORE MEDICAL CENTER $296M 8,720 1
DUKE UNIVERSITY HEALTH SYSTEM, INC. DUKE UNIVERSITY HOSPITAL $267M 8,874 2


Outpatient Highlights:

Total Payments (2015) Payment Annual Growth (2010-15) Patient Count Annual Growth (2010-15) Count of Organization NPI (2015)
$62.37B 5.73% 1.84% 38,290
  • This part A component is the result of inpatient facilities billing under outpatient care.
  • Fastest growing segment of Part A in terms of patient count and payment amount.
  • Although the majority of the organizations in outpatient have one NPI, there are some such as the Dialysis Clinic Inc. that have many more. This appears to vary by specialty.
  • High  market concentration (top 10% of Outpatient organizations have a 78% market share).

Top 10 Outpatient Organizations (2015):

Org Name Total Payment Amount Patient Count Distinct count of Npi
DIALYSIS CLINIC INC. $243M 12,484 187
MEMORIAL HOSPITAL FOR CANCER & ALLIED DISEASES $199M 48,597 1
UNIVERSITY OF TEXAS M. D. ANDERSON CANCER CENTER $198M 45,104 1
THE CLEVELAND CLINIC FOUNDATION $185M 133,112 1
GENERAL HOSPITAL CORPORATION $163M 77,592 1
YALE-NEW HAVEN HOSPITAL $158M 58,395 2
THE JOHNS HOPKINS HOSPITAL $156M 58,883 1
STANFORD HOSPITAL AND CLINICS STANFORD MEDICAL CENTER $150M 51,823 1
THE NEW YORK AND PRESBYTERIAN HOSPITAL NEW YORK – PRESBYTERIAN HOSPITAL $144M 88,275 4
REGENTS OF THE UNIVERSITY OF MICHIGAN UNIVERSITY OF MICHIGAN HOSPITALS AND HEALTH CENTERS $141M 73,881 1

 

Skilled Nursing Facility (SNF) Highlights:

Total Payments (2015) Payment Annual Growth (2010-15) Patient Count Annual Growth (2010-15) Count of Organization NPI (2015)
$28.19B 0.86% -0.42% 16,678
  • Even though the annual number of patients decreased, the annual growth in payment amount increased for SNF between 2010 and 2015
  • Low market concentration (top 10% of Skilled Nursing Facility organizations have a 34% market share).

Top 10 Skilled Nursing Facility Organizations (2015):

Org Name Total Payment Amount Patient Count Distinct count of Npi
JOHNSON MEMORIAL HOSPITAL MILLER’S MERRY MANOR $27M 2,178 27
BORO PARK OPERATING CO LLC $25M 917 1
NORTH SHORE – LIJ STERN FAMILY CENTER FOR REHABILITATION $25M 1,892 1
THE REHABILITATION CENTRE OF BEVERLY HILLS THE REHABILITATION CENTRE OF BEVERLY HILLS $21M 1,320 1
MENORAH HOME AND HOSPITAL FOR THE AGED AND INFIRM $19M 893 1
MANOR CARE OF PALOS HEIGHTS IL LLC MANORCARE HEALTH SERVICES-PALOS HEIGHTS EAST $19M 1,077 1
SHORE VIEW ACQUISITION I, LLC $18M 749 1
NMS HEALTHCARE OF HYATTSVILLE LLC ST THOMAS MORE MEDICAL COMPLEX $17M 666 1
DRY HARBOR HRF INC DRY HARBOR NURSING HOME $17M 673 1
AMSTERDAM NURSING HOME CORPORATION (1992) AMSTERDAM NURSING HOME $17M 841 1

Hospice Highlights:

Total Payments (2015) Payment Annual Growth (2010-15) Patient Count Annual Growth (2010-15) Count of Organization NPI (2015)
$15.43B 3.56% 3.16% 4,056
  • Smallest of the organization types in terms of patients and payments but experienced the second highest percent annual growth.
  • 3 of Vitas Healthcare Corporation’s regional organizations are in the top 10 for hospices.
  • Although some of the top Hospice organizations contain more than one NPI, the vast majority have only 1.
  • Medium market concentration (top 10% of Hospice organizations have a 54% market share).

Top 10 Hospice Organizations (2015):

Org Name Total Payment Amount Patient Count Distinct count of Npi
VITAS HEALTHCARE CORPORATION OF FLORIDA $457M 24,938 3
VITAS HEALTHCARE CORPORATION OF CALIFORNIA $237M 14,734 9
HEARTLAND HOSPICE SERVICES LLC HEARTLAND HOME HEALTH CARE AND HOSPICE $154M 11,179 20
ODYSSEY HEALTHCARE OPERATING A LP GENTIVA HOSPICE $143M 11,225 22
HOSPICE OF THE VALLEY $111M 11,271 5
VITAS HEALTHCARE CORPORATION ATLANTIC $105M 8,451 8
HOSPICE PREFERRED CHOICE, INC. ASERACARE HOSPICE $102M 8,719 30
IN HOME HEALTH LLC HEARTLAND HOME HEALTH CARE AND HOSPICE $87M 6,424 16
HEARTLAND HOSPICE SERVICES LLC HEARTLAND HOSPICE SERVICES $85M 6,295 13
THE HOSPICE OF THE FLORIDA SUNCOAST, INC. $74M 6,713 1

Home Health Aide (HHA) Highlights:

Total Payments (2015) Payment Annual Growth (2010-15) Patient Count Annual Growth (2010-15) Count of Organization NPI (2015)
$18.25B -1.32% -0.12% 10,747
  • HHA saw the greatest annual decrease between 2010 and 2015 compared to all the organization types
  • Medium market concentration (top 10% of Home Health Aide organizations have a 53% market share)

Top 10 Home Health Aide Organizations (2015):

Org Name Total Payment Amount Patient Count Distinct count of Npi
GENTIVA CERTIFIED HEALTHCARE CORP. GENTIVA HEALTH SERVICES $400M 75,516 89
BAYADA HOME HEALTH CARE, INC. $180M 40,590 66
VISITING NURSE SERVICE OF NEW YORK HOME CARE II VISITING NURSE SERVICE OF NEW YORK HOME CARE $165M 34,229 1
SUTTER VISITING NURSE ASSOCIATION AND HOSPICE SUTTER CARE AT HOME $73M 13,753 9
GENTIVA HEALTH SERVICES (CERTIFIED), INC. KINDRED AT HOME $62M 13,286 15
PARTNERS HOME CARE INC PARTNERS HEALTHCARE AT HOME – HOME CARE $61M 12,500 1
TOTAL CARE HOME HEALTH OF NORTH CAROLINA, LLC GENTIVA HEALTH SERVICES $56M 11,592 4
HHC, LLC AMEDISYS HOME HEALTH CARE $49M 8,897 6
GIRLING HEALTH CARE, INC. GIRLING HOME HEALTH $47M 8,335 9
MID-SOUTH HOME HEALTH, LLC GENTIVA HEALTH SERVICES $46M 8,855 11

 

Industry Trends

Between 2010 and 2015, we observed the following increases of NPI numbers, patients and total payment amounts in Medicare Part A.

 

Part A 2010 2011 2012 2013 2014 2015
Organization NPI Numbers 54,190 54,979 55,626 56,525 56,862 56,600
Patient Count 55.62M 56.80M 57.80M 58.34M 58.59M 58.71M
Total Payment Amount $229.8B $235.4B $236.4B $239.1B $242.2B $243.8B

The number of patients and the total amount paid has grown in recent years for Part A as a whole. Over the 2010-2015 span, the number of patients has increased overall by about 5.5% and the total amount paid has increased overall by about 6%.

As a reference, the US population has grown by about 4.5% and inflation has gone up 9% in the same six year span.

A closer look at Part A data reveals that the majority of the growth can be attributed to the outpatient segment. The charts below illustrate the percent change (from 2010 to 2015) in the number of patients (left) and the corresponding percent change in payment amount (right) for each organizational type.

The summary table that follows details the trends in percentages and absolute terms for INP and OUT further illustrating the impact these two categories have on Part A in terms of dollars and patients.

INP 2010 2015 Change % Change
Patient Count 8,513,196 7,665,342 -847,854 -10%
Total Payment Amount $ 123.1B $ 119.6B $ -3.54B -3%

 

OUT 2010 2015 Change % Charge
Patient Count 39,917,711 43,724,289 3,806,578 10%
Total Payment Amount $ 47.227B $ 62.37B $ 15.16B 32%

Conclusion

To provide a better understanding of how Medicare Part A (hospital care) has changed between 2010 and 2015, this analysis focuses on the general trends and top performers within each organization type. It’s clear that OUT and INP facilities have had the greatest number of patients and the highest payment totals. Consequently, any shifts in the trends in these two organization types have a proportionally larger impact on Part A as a whole.

The consistent increases in Part A spend can most closely be traced to the growth of the outpatient segment. Outpatient growth ($15 B) has far exceeded the decline ($4 B) in inpatient care. The trends in the other segments, though not flat, are proportionally smaller and have a lesser effect on the total spend in part A. It’s interesting to note that, on average, the payments per patient is significantly higher for INP (~$15,000) than it is for OUT (~$1,600). While this is not representative across specific procedures, inpatient spending is roughly 9 times more than outpatient spending. With the cost of medical expenses steadily increasing, the general shift from inpatient spending to outpatient spending is likely to continue.

A key focus of this analysis is the impact that the top performing NPIs have in each Medicare part A segment. Having observed these top performers it is not surprising to see nearly half of the payments were made a small percentage of the NPIs in each category . Of equal importance is the observation that top performers (on average) grew more than their smaller counterparts within each organization type. This is indicative of an industry-wide trend in which large organizations are driving the majority of the growth in Medicare Part A.

 

Staff Writer