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DOI: 10.1177/1077558703256725 Estimating the Costs of VA Ambulatory CareVA HSR&D Health Economics Resource Center and VA Cooperative Studies Program; Department of Health Research and Policy, Stanford University; Center for Primary Care and Outcomes Research, Stanford University
Health Services and Policy Analysis Program, University of California, Berkeley
VA HSR&D Health Economics Resource Center and VA Cooperative Studies Program; Center for Primary Care and Outcomes Research, Stanford University
VA HSR&D Health Economics Resource Center and VA Cooperative Studies Program; Department of Health Research and Policy, Stanford University; Center for Primary Care and Outcomes Research, Stanford University 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.
Key Words: outpatient • cost • price • Medicare • reimbursement • microcost • veterans • VA
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