Nearly 90 Percent of Portable EKGs and Ultrasound Tests Are Done in Nursing Homes

Medicare paid for more than 14 million EKG and 5 million ultrasound services in 1995 at a cost to the Medicare program of about $597 and $976 million, respectively. Most EKG and ultrasound services were performed in physicians’ offices or hospitals. In 1995, about 2 percent of the EKG and less than 1 percent of the ultrasound services were provided in beneficiaries’ homes or nursing homes, costing the Medicare program about $12 million for the EKGs and $8 million for the ultrasound services. These services were usually provided by portable x-ray suppliers and IPLs. Likewise, these two types of providers accounted for a high portion of the Medicare ultrasound services provided in nursing homes. Thus, this change in transportation policy will have a larger effect on Medicare spending in some geographic areas. EKG and Ultrasound Services Are Likely to Be Available in Nursing Homes After Revised Payment Policy

About 19 percent of the EKGs and 21 percent of the ultrasound tests done in nursing homes in 1995 would be unaffected by any change in the transportation payment policy because BBA eliminates separate payments for services provided to beneficiaries in skilled facilities while their stay is covered under posthospital extended care. Consequently, 56 percent of the EKG services and 89 percent of the ultrasound tests provided to beneficiaries in their place of residence would be unaffected by the elimination of separate transportation payments. Consequently, nursing homes could be affected as well. However, these savings would have materialized only to the extent that homebound beneficiaries and nursing home residents did not travel outside in Medicare-paid ambulances to receive these tests. They also noted that residents needing EKGs would receive quicker service if the equipment were always on the premises. Many of the EKGs and most of the ultrasound tests performed in those settings would be unaffected by the elimination of separate transportation payments. Consequently, our estimate of the effect of a revised payment policy ranges from a savings of $11 million to a cost of $9.7 million for EKG tests and a savings of $400,000 to a cost of $125,000 for ultrasound tests. Because providers’ reactions are uncertain, HCFA would have to eliminate transportation payments to reliably gauge the revised policy’s effect on Medicare spending. In estimating the potential net cost to Medicare from eliminating transportation payments, we did the following: (1) identified, from the sample 5-percent national claims data file, the Medicare beneficiary population that received an EKG or ultrasound service from a provider that was paid a transportation fee for delivering the service; (2) reduced this count by the beneficiaries who also had an x-ray service (since the provider would continue to get transportation fees for the x-ray), the beneficiaries who had the service delivered by a provider who could not be paid transportation expenses, and beneficiaries receiving the services while covered under posthospital extended care; (3) estimated the percentage of beneficiaries who would have been transported by ambulance (using our observations from case files in two states); (4) developed an average ambulance fee paid in each state (using data on the skilled nursing home beneficiaries who went by ambulance in 1995 to an outpatient facility for a diagnostic test); and (5) determined the transportation fee paid to mobile providers in each state. A recorded menu will provide information on how to obtain these lists.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed how the Health Care Financing Administration's (HCFA) revised payment policies would affect Medicare beneficiaries and program costs, focusing on the: (1) Medicare recipients, places of service, and providers who might be affected most; (2) number of services that would be affected by the changed policy; and (3) effect on Medicare's program costs.

What GAO Found

GAO noted that: (1) only a fraction of the electrocardiogram (EKG) and ultrasound tests paid for by Medicare are performed outside of physicians' offices or hospital settings and, thus, are potentially affected by the payment policy changes; (2) in 1995, Medicare paid approximately $597 million for 14 million EKGs and about $976 million for 5 million ultrasound tests in various settings; (3) only 290,000 of the EKGs and only 37,000 of the ultrasound tests were done in locations such as nursing homes or beneficiaries' residences where the provider needed to transport the diagnostic equipment; (4) nearly 90 percent of the services that required transporting equipment were provided to residents of nursing homes; (5) they were usually provided by portable x-ray and ultrasound providers; (6) some states appear to have a higher concentration of these services, with a small number of providers accounting for a large portion of each state's total portable EKG and ultrasound services; (7) many EKGs and ultrasound services provided in nursing homes would be unaffected if transportation payments were eliminated; (8) given the experience of 1995, about 56 percent of the EKGs and 89 percent of the ultrasound services provided in nursing homes would be unaffected by transportation payment changes and presumably would continue to be provided in those settings; (9) in July 1998, nursing homes will receive an inclusive per diem payment for all services provided to beneficiaries receiving Medicare-covered skilled nursing care; (10) a decision to eliminate or retain separate transportation payments for other beneficiaries will not affect the per diem payment; (11) another reason is that many nursing home EKGs and most ultrasound services in 1995 were performed by providers who did not receive a transportation payment; (12) the effect of eliminating transportation payments on the remaining 44 percent of the EKG and 11 percent of the ultrasound services is unknown because it depends on how providers respond; (13) because relatively few services would be affected, eliminating transportation payments would likely have a nominal effect on Medicare spending; (14) Medicare could save $11 million if mobile providers continue to supply services; (15) however, if mobile providers stopped bringing portable EKG equipment to beneficiaries, then some people would travel in Medicare-paid ambulances to obtain these tests; (16) eliminating transportation payments for ultrasound services would have a smaller effect; and (17) GAO estimates the effect on Medicare spending might range from $400,000 in savings to $125,000 in increased costs.