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Medicare payments for common inpatient procedures: implications for episode-based payment bundling.

ABSTRACT: Aiming to align provider incentives toward improving quality and efficiency, the Center for Medicare and Medicaid Services is considering broader bundling of hospital and physician payments around episodes of inpatient surgery. Decisions about bundled payments would benefit from better information about how payments are currently distributed among providers of different perioperative services and how payments vary across hospitals.Using the national Medicare database, we identified patients undergoing one of four inpatient procedures in 2005 (coronary artery bypass [CABG], hip fracture repair, back surgery, and colectomy). For each procedure, price-standardized Medicare payments from the date of admission for the index procedure to 30 days postdischarge were assessed and categorized by payment type (hospital, physician, and postacute care) and subtype.Average total payments for inpatient surgery episodes varied from U.S.$26,515 for back surgery to U.S.$45,358 for CABG. Hospital payments accounted for the largest share of total payments (60-80 percent, depending on procedure), followed by physician payments (13-19 percent) and postacute care (7-27 percent). Overall episode payments for hospitals in the lowest and highest payment quartiles differed by U.S.$16,668 for CABG, U.S.$18,762 for back surgery, U.S.$10,615 for hip fracture repair, and U.S.$12,988 for colectomy. Payments to hospitals accounted for the largest share of variation in payments. Among specific types of payments, those associated with 30-day readmissions and postacute care varied most substantially across hospitals.Fully bundled payments for inpatient surgical episodes would need to be dispersed among many different types of providers. Hospital payments--both overall and for specific services--vary considerably and might be reduced by incentives for hospitals and physicians to improve quality and efficiency.

SUBMITTER: Birkmeyer JD

PROVIDER: S-EPMC3026958 | biostudies-literature | 2010 Dec

REPOSITORIES: biostudies-literature

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Medicare payments for common inpatient procedures: implications for episode-based payment bundling.

Birkmeyer John D JD Gust Cathryn C Baser Onur O Dimick Justin B JB Sutherland Jason M JM Skinner Jonathan S JS

Health services research 20101201 6 Pt 1

<h4>Background</h4>Aiming to align provider incentives toward improving quality and efficiency, the Center for Medicare and Medicaid Services is considering broader bundling of hospital and physician payments around episodes of inpatient surgery. Decisions about bundled payments would benefit from better information about how payments are currently distributed among providers of different perioperative services and how payments vary across hospitals.<h4>Study design</h4>Using the national Medica ...[more]

PMID: 20698899

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Project description:OBJECTIVES:The purpose of this study was to examine the association of 30-day payments for an episode of heart failure (HF) care at the hospital level with patient outcomes. BACKGROUND:There is increased focus among policymakers on improving value for HF care, given its rising prevalence and associated financial burden in the United States; however, little is known about the relationship between payments and mortality for a 30-day episode of HF care. METHODS:Using Medicare claims data for all fee-for-service beneficiaries hospitalized for HF between July 1, 2011, and June 30, 2014, we examined the association between 30-day Medicare payments at the hospital level (beginning with a hospital admission for HF and across multiple settings following discharge) and patient 30-day mortality using mixed-effect logistic regression models. RESULTS:We included 1,343,792 patients hospitalized for HF across 2,948 hospitals. Mean hospital-level 30-day Medicare payments per beneficiary were $15,423 ± $1,523. Overall observed mortality in the cohort was 11.3%. Higher hospital-level 30-day payments were associated with lower patient mortality after adjustment for patient characteristics (odds ratio per $1,000 increase in payments: 0.961; 95% confidence interval [CI]: 0.954 to 0.967). This relationship was slightly attenuated after accounting for hospital characteristics and HF volume, but remained significant (odds ratio per $1,000 increase: 0.968; 95% CI: 0.962 to 0.975). Additional adjustment for potential mediating factors, including cardiac service capability and post-acute service use, did not significantly affect the relationship. CONCLUSIONS:Higher hospital-level 30-day episode payments were associated with lower patient mortality following a hospitalization for HF. This has implications for policies that incentivize reduction in payments without considering value. Further investigation is needed to understand the mechanisms that underlie this relationship.

Project description:ObjectiveTo characterize the development and performance of a cataract surgery episode-based cost measure for the Medicare Quality Payment Program.DesignClaims-based analysis.ParticipantsMedicare clinicians with cataract surgery claims between June 1, 2016, and May 31, 2017.MethodsWe limited the analysis to claims with procedure code 66984 (routine cataract surgery), excluding cases with relevant ocular comorbidities. We divided episodes into subgroups by surgery location (Ambulatory Surgery Center [ASC] or Hospital Outpatient Department [HOPD]) and laterality (bilateral when surgeries were within 30 days apart). For the episode-based cost measure, we calculated costs occurring between 60 days before surgery and 90 days after surgery, limited to services identified by an expert committee as related to cataract surgery and under the influence of the cataract surgeon. We attributed costs to the clinician submitting the cataract surgery claim, categorized costs into clinical themes, and calculated episode cost distribution, reliability in detecting clinician-dependent cost variation, and costs with versus without complications. We compared episode-based cost scores with hypothetical "nonselective" cost scores (total Medicare beneficiary costs between 60 days before surgery and 90 days after surgery).Main outcome measuresEpisode costs with and without complications, clinician-dependent variation (proportion of total cost variance), and proportion of costs from cataract surgery-related clinical themes.ResultsWe identified 583 356 cataract surgery episodes attributed to 10 790 clinicians and 8189 with ≥ 10 episodes during the measurement period. Most surgeries were performed in an ASC (71%) and unilateral (66%). The mean episode cost was $2876. The HOPD surgeries had higher costs; geography and episodes per clinician did not substantially affect costs. The proportion of cost variation from clinician-dependent factors was higher in episode-based compared with nonselective cost measures (94% vs. 39%), and cataract surgery-related clinical themes represented a higher proportion of total costs for episode-based measures. Episodes with complications had higher costs than episodes without complications ($3738 vs. $2276).ConclusionsThe cataract surgery episode-based cost measure performs better than a comparable nonselective measure based on cost distribution, clinician-dependent variance, association with cataract surgery-related clinical themes, and quality alignment (higher costs in episodes with complications). Cost measure maintenance and refinement will be important to maintain clinical validity and reliability.Financial disclosuresProprietary or commercial disclosure may be found after the references.

Project description:BACKGROUND:Recent policy efforts have focused on improving the value of acute myocardial infarction (AMI) care. Medicare payment programs, for example, increasingly evaluate hospital performance based on spending, as determined by payments made to institutions and providers, and outcome measures for a longitudinal episode of AMI care. Little is known about the relationship between total 30-day payments-both in the inpatient and immediate postdischarge timeframe-and outcomes after an admission for AMI. METHODS AND RESULTS:Using Medicare claims data, we identified Medicare fee-for-service beneficiaries ?65 years of age who were hospitalized at an acute-care hospital for AMI between July 1, 2011, and June 30, 2014, and examined the association between hospital-level 30-day payments for an episode of AMI care and patient 30-day mortality using mixed regression models with a logit link function and random hospital intercepts. Our cohort included 642 105 index hospitalizations for AMI at 2319 acute-care hospitals. Overall mean 30-day episode payments per beneficiary were $22 128 (SD, $1750). The observed 30-day mortality rate was 12.9%. Higher 30-day payments were associated with lower 30-day mortality after adjustment for patient characteristics and comorbidities (adjusted odds ratio for additional $1000 payments, 0.986; 95% confidence interval, 0.979-0.992; P<0.001). Additional adjustment for potential mediating factors, including hospital characteristics, coronary revascularization rates, and discharge disposition, did not significantly attenuate the relationship (adjusted odds ratio for additional $1000 payments, 0.987; 95% confidence interval, 0.980-0.994; P<0.001). CONCLUSIONS:Higher hospital-level 30-day payments-both inpatient and in multiple settings after discharge-for AMI care were associated with lower 30-day mortality among beneficiaries. This may have implications for payment programs that incent reduction in payments without considering value.

Project description:ObjectiveThis study examines the relationship between evidence-based appropriateness criteria for neurologic imaging procedures and Medicare payment determinations. The primary research question is whether Medicare is more likely to pay for imaging procedures as the level of appropriateness increases.Data sourcesThe American College of Radiology Appropriateness Criteria (ACRAC) for neurological imaging, ICD-9-CM codes, CPT codes, and payment determinations by the Medicare Part B carrier for Florida and Connecticut.Study designCross-sectional study of appropriateness criteria and Medicare Part B payment policy for neurological imaging. In addition to descriptive and bivariate statistics, multivariate logistic regression on payment determination (yes or no) was performed.Data collection methodsThe American College of Radiology Appropriateness Criteria (ACRAC) documents specific to neurological imaging, ICD-9-CM codes, and CPT codes were used to create 2,510 medical condition/imaging procedure combinations, with associated appropriateness scores (coded as low/middle/high).Principal findingsAs the level of appropriateness increased, more medical condition/imaging procedure combinations were payable (low = 61 percent, middle = 70 percent, and high = 74 percent). Logistic regression indicated that the odds of a medical condition/imaging procedure combination with a middle level of appropriateness being payable was 48 percent higher than for an otherwise similar combination with a low appropriateness score (95 percent CI on odds ratio=1.19-1.84). The odds ratio for being payable between high and low levels of appropriateness was 2.25 (95 percent CI: 1.66-3.04).ConclusionsMedicare could improve its payment determinations by taking advantage of existing clinical guidelines, appropriateness criteria, and other authoritative resources for evidence-based practice. Such an approach would give providers a financial incentive that is aligned with best-practice medicine. In particular, Medicare should review and update its payment policies to reflect current information on the appropriateness of alternative imaging procedures for the same medical condition.

Project description:BACKGROUND:Nearly 1.5 million clinicians in the United States will be affected by Centers for Medicare and Medicaid Services' (CMS) new payment program, the Merit-based Incentive Program (MIPS), where clinicians will be penalized or rewarded based on the health care expenditures of their patients. We therefore examined expenditures for major cancer surgery to understand physician-specific variation in episode payments. METHODS:We used Surveillance, Epidemiology and End Results-Medicare data to identify patients aged 66-99 y who underwent a prostatectomy, nephrectomy, lung, or colorectal resection for cancer from 2008 to 2012. We calculated 90-d episode payments, attributed each episode to a physician, and evaluated physician-level payment variation. Next, we determined which component (index admission, readmission, physician services, postacute care, hospice) drove differences in payments. Finally, we evaluated payments by geographic region, number of comorbidities, and cancer stage. RESULTS:We identified 39,109 patients who underwent surgery by 1 of 7182 providers. There was wide variation in payments for each procedure (prostatectomy: $7046-$40,687; nephrectomy: $8855-$82,489; lung resection: $11,167-$223,467; colorectal resection: $9711-$199,480). The largest component difference in episode payments varied by condition: physician payments for prostatectomy (29%), postacute care for nephrectomy (38%) and colorectal resections (38%), and index hospital admission for lung resections (43%) but were fairly stable across region, comorbidity number, and cancer stage. CONCLUSIONS:For patients undergoing major cancer surgery, 90-d episode payments vary widely across surgeons. The components driving such variation differ by condition but remain stable across region, number of comorbidities, and cancer stage. These data suggest that programs to reduce specific component payments may have advantages over those targeting individual physicians for decreasing health care expenditures.

Project description:BackgroundEpisode-of-care payments are defined as a single lump-sum payment for all services associated with a single medical event or surgery and are designed to incentivize efficiency and integration among providers and healthcare systems. A TKA is considered an exemplar for an episode-of-care payment model by many policymakers, but data describing variation payments between hospitals for TKA are extremely limited.Questions/purposesWe asked: (1) How much variation is there between hospitals in episode-of-care payments for primary TKA? (2) Is variation in payment explained by differences in hospital structural characteristics such as teaching status or geographic location, patient factors (age, sex, ethnicity, comorbidities), and discharge disposition during the postoperative period (home versus skilled nursing facility)? (3) After accounting for those factors, what proportion of the observed variation remains unexplained?MethodsWe used Medicare administrative data to identify fee-for-service beneficiaries who underwent a primary elective TKA in 2009. After excluding low-volume hospitals, we created longitudinal records for all patients undergoing TKAs in eligible hospitals encompassing virtually all payments by Medicare for a 120-day window around the TKA (30 days before to 90 days after). We examined payments for the preoperative, perioperative, and postdischarge periods based on the hospital where the TKA was performed. Confounding variables were controlled for using multivariate analyses to determine whether differences in hospital payments could be explained by differences in patient demographics, comorbidity, or hospital structural factors.ResultsThere was considerable variation in payments across hospitals. Median (interquartile range) hospital preoperative, perioperative, postdischarge, and 120-day payments for patients who did not experience a complication were USD 623 (USD 516-768), USD 13,119 (USD 12,165-14,668), USD 8020 (USD 6403-9933), and USD 21,870 (USD 19,736-25,041), respectively. Variation cannot be explained by differences in hospital structure. Median (interquartile range) episode payments were greater for hospitals in the Northeast (USD 26,291 [22,377-30,323]) compared with the Midwest, South, and West (USD 20,614, [USD 18,592-22.968]; USD 21,584, [USD 19,663-23,941]; USD 22,421, [USD 20,317-25,860]; p < 0.001) and for teaching compared with nonteaching hospitals (USD 23,152 [USD 20,426-27,127] versus USD 21,336 [USD 19,352-23,846]; p < 0.001). Patient characteristics explained approximately 15% of the variance in hospital payments, hospital characteristics (teaching status, geographic region) explained 30% of variance, and approximately 55% of variance was not explained by either factor.ConclusionsThere is much unexplained variation in episode-of-care payments at the hospital-level, suggesting opportunities for enhanced efficiency. Further research is needed to ensure an appropriate balance between such efficiencies and access to care.Level of evidenceLevel II, economic analysis.

Dataset Information

Medicare payments for common inpatient procedures: implications for episode-based payment bundling.

Publications

Medicare payments for common inpatient procedures: implications for episode-based payment bundling.

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