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Effects of the Medicare Modernization Act on Spending for Outpatient Surgery.

ABSTRACT: OBJECTIVES:To examine the effects of Medicare's revised ambulatory surgery center (ASC) payment schedule on overall payments for outpatient surgery. DATA SOURCES:Twenty percent sample of national Medicare beneficiaries. STUDY DESIGN:We conducted a pre-post study of Medicare beneficiaries who underwent outpatient surgery in a hospital outpatient department (HOPD), ASC, or physician office between 2004 and 2011. Specifically, we used multivariable regression to compare temporal trends in outpatient surgery before and after implementation of Medicare's revised payment schedule in 2008, which reduced ASC facility payments to roughly two-thirds that of HOPDs. Our outcome measures included overall Medicare payments, utilization rates, per beneficiary spending, and average episode payments for outpatient surgery. PRINCIPAL FINDINGS:Between the last quarters of 2007 and 2008, overall Medicare payments for outpatient surgery grew by $334 million-an amount nearly three times higher than would have been expected without the policy change (p < .001 for the difference). While utilization rates of outpatient surgery were attenuated, per beneficiary spending and average surgical episode payments increased by 10.4 percent and 7.8 percent, respectively, over the same period. By the end of 2011, Medicare payments for outpatient surgery reached $5.1 billion. Without the policy change, they would have totaled only $4.1 billion. CONCLUSIONS:Despite lessening demand, reduced ASC facility payments did not curb spending for outpatient surgery. In fact, overall payments actually increased following the policy change, driven by higher average episode payments.

SUBMITTER: Hollingsworth JM

PROVIDER: S-EPMC6056603 | biostudies-literature | 2018 Aug

REPOSITORIES: biostudies-literature

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Effects of the Medicare Modernization Act on Spending for Outpatient Surgery.

Hollingsworth John M JM Oerline Mary K MK Ellimoottil Chandy C Herrel Lindsey A LA Hollenbeck Brent K BK

Health services research 20171130

<h4>Objectives</h4>To examine the effects of Medicare's revised ambulatory surgery center (ASC) payment schedule on overall payments for outpatient surgery.<h4>Data sources</h4>Twenty percent sample of national Medicare beneficiaries.<h4>Study design</h4>We conducted a pre-post study of Medicare beneficiaries who underwent outpatient surgery in a hospital outpatient department (HOPD), ASC, or physician office between 2004 and 2011. Specifically, we used multivariable regression to compare tempor ...[more]

PMID: 29194621

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Project description:BackgroundHealth care providers who participate as an accountable care organization (ACO) in the voluntary Medicare Shared Savings Program (MSSP) have incentives to lower spending for Medicare patients while achieving high performance on a set of quality measures. Little is known about the extent to which early savings achieved by ACOs in the program have grown and been replicated by ACOs that entered the program in later years. ACOs that are physician groups have stronger incentives to lower spending than hospital-integrated ACOs.MethodsUsing fee-for-service Medicare claims from 2009 through 2015, we performed difference-in-differences analyses to compare changes in Medicare spending for patients in ACOs before and after entry into the MSSP with concurrent changes in spending for local patients served by providers not participating in the MSSP (control group). We estimated differential changes (i.e., the between-group difference in the change from the pre-entry period) separately for hospital-integrated ACOs and physician-group ACOs that entered the MSSP in 2012, 2013, or 2014.ResultsMSSP participation was associated with differential spending reductions in physician-group ACOs. These reductions grew with longer participation in the program and were significantly greater than the reductions in hospital-integrated ACOs. By 2015, the mean differential change in per-patient Medicare spending was -$474 (-4.9% of the pre-entry mean, P<0.001) for physician-group ACOs that entered in 2012, -$342 (-3.5% of the pre-entry mean, P<0.001) for those that entered in 2013, and -$156 (-1.6% of the pre-entry mean, P=0.009) for those that entered in 2014. The corresponding differential changes for hospital-integrated ACOs were -$169 (P=0.005), -$18 (P=0.78), and $88 (P=0.14), which were significantly lower than for physician-group ACOs (P<0.001). Spending reductions in physician-group ACOs constituted a net savings to Medicare of $256.4 million in 2015, whereas spending reductions in hospital-integrated ACOs were offset by bonus payments.ConclusionsAfter 3 years of the MSSP, participation in shared-savings contracts by physician groups was associated with savings for Medicare that grew over the study period, whereas hospital-integrated ACOs did not produce savings (on average) during the same period. (Funded by the National Institute on Aging.).

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Effects of the Medicare Modernization Act on Spending for Outpatient Surgery.

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Effects of the Medicare Modernization Act on Spending for Outpatient Surgery.

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