Estimating the costs of VA ambulatory care.
This article reports how we matched Common Procedure Terminology (CPT) codes with Medicare payment rates and aggregate Veterans Affairs (VA) budget data to estimate the costs of every VA ambulatory encounter. Converting CPT codes to encounter-level costs was more complex than a simple match of Medicare reimbursements to CPT codes. About 40 percent of the CPT codes used in VA, representing about 20 percent of procedures, did not have a Medicare payment rate and required other cost estimates. Reconciling aggregated estimated costs to the VA budget allocations for outpatient care produced final VA cost estimates that were lower than projected Medicare reimbursements. The methods used to estimate costs for encounters could be replicated for other settings. They are potentially useful for any system that does not generate billing data, when CPT codes are simpler to collect than billing data, or when there is a need to standardize cost estimates across data sources.
Phibbs
Ciaran S
CS
VA HSR&D Health Economics Resource Center, VA Cooperative Studies Program, Department of Health Research and Policy, Center for Primary Care and Outcomes Research, Stanford University, USA.
Bhandari
Aman
A
Yu
Wei
W
Barnett
Paul G
PG
D000066:Accounting / Q000191:economics / Q000379:methods; D000553:Ambulatory Care / Q000191:economics* / Q000706:statistics & numerical data; D002017:Budgets; D014487:Centers for Medicare and Medicaid Services, U.S.; D039702:Current Procedural Terminology; D003627:Data Interpretation, Statistical; D017048:Health Care Costs / Q000706:statistics & numerical data*; D006302:Health Services Research / Q000379:methods; D006801:Humans; D006278:Medicare / Q000191:economics / Q000706:statistics & numerical data; D020380:Needs Assessment; D012051:Reimbursement Mechanisms / Q000191:economics; D015895:Relative Value Scales; D014481:United States; D014493:United States Department of Veterans Affairs / Q000191:economics* / Q000706:statistics & numerical data