Variation in Medicare's Local Spending Policies: Content Analysis of Local Medical Review Policies

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Objective: To assess variation in the content of Medicare's local medical review policies.

Study Design: Six case studies to compare differences in coverage policies by diagnosis codes, procedure codes, and indications for use.

Methods: All carrier policies from 48 carrier contracts (n = 5213) posted to the Centers for Medicare & Medicaid Services Web site were downloaded on May 31, 2001. All policies in the data set were coded based on a typology: new technology (NT), extensions of new technology (TE), and utilization management (UM) of widely used procedures. We identified policies addressing the same procedure or technology. We required at least 20 separate policies in each case study to allow meaningful comparisons. We randomly selected 1 case study of a diagnostic and 1 for a treatment modality from each policy type (NT, TE, and UM).

Results: Given previous research on local carriers, we expected to find variations among policies in each case study. We found substantial similarity, however, among policies covering the NT and TE types. We found significantly more variation among our UM-type case studies.

Conclusions: Medicare legislation has called for greater coverage policy consistency in Medicare. This analysis on variation in policy content, part of a larger study on variation in Medicare's local coverage process, provides data on policy content differences. Policy reform should reflect the nature of and reasons for policy variation as suggested by the findings of this research.

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