The Adjusted Average Per Capita Costs (AAPCCs) are five-year moving averages per beneficiary spending at the county level for fee-for-service Medicare. Medicare’s costs in paying claims for beneficiaries with ESRD were not considered in these county estimates. ESRD enrollees are handled on a state-wide basis. The direct link between AAPCCs and payments created perceptions of geographic inequity as plans were more likely to serve counties with high AAPCCs and typically offered more comprehensive benefits than fee-for service Medicare or counties with lower rates. The Centers for Medicare and Medicaid Services (CMS) Hierarchical Condition Categories (HCC) ESRD risk adjustment model is based on the CMS-HCC model for aged/disabled beneficiaries: it uses the same HCCs and therefore retains the characteristics of the CMS-HCC model. The coefficients differ as they are estimated for the ESRD dialysis and transplant populations, which have different costs for their Part A and B benefits and different cost patterns among the various diagnoses. The following are the segments of the ESRD model: Dialysis, Transplant, and Post-Graft/Functioning Graft.
Indirect medical education (IME) costs are additional patient care costs associated with the training of interns and residents. While the direct costs of graduate medical education (GME) are computed from the hospitals’ accounting records, the indirect costs of IME are estimated statistically. IME Phase-out represents phase-out of the incremental payments for Indirect Medical Education (IME) that resulted from including incremental amounts in both the health plans’ premium payments from CMS and the payments made directly to such hospitals by CMS.