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Spending On Postacute Care After Hospitalization In Commercial Insurance And Medicare Around Age Sixty-Five.

ABSTRACT: Postacute care costs are the primary determinant of episode spending around hospitalization. Yet there is little evidence that greater spending on postacute care improves readmission rates or functional recovery. Recent Medicare payment reform evaluations have suggested that postacute care spending is responsive to episode-based incentives. However, it remains unknown whether Medicare payment policies are responsible for excess postacute care spending, compared with that of commercial payers. In a population-based, statewide collaborative of Michigan hospitals, we used regression discontinuity design among propensity-weighted, age-adjusted cohorts to compare postacute care spending between patients with commercial insurance and those with Medicare around age sixty-five. Spending was 68-230 percent greater among fee-for-service Medicare beneficiaries than among similar commercially insured people across varied medical and surgical conditions. Despite greater spending, there were no differences in readmission rates. These findings suggest that postacute care utilization is highly sensitive to payer influence, and there may be an opportunity for additional savings in Medicare without sacrificing quality.

SUBMITTER: Regenbogen SE

PROVIDER: S-EPMC7795720 | biostudies-literature | 2019 Sep

REPOSITORIES: biostudies-literature

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Spending On Postacute Care After Hospitalization In Commercial Insurance And Medicare Around Age Sixty-Five.

Regenbogen Scott E SE Cain-Nielsen Anne H AH Syrjamaki John D JD Chen Lena M LM Norton Edward C EC

Health affairs (Project Hope) 20190901 9

Postacute care costs are the primary determinant of episode spending around hospitalization. Yet there is little evidence that greater spending on postacute care improves readmission rates or functional recovery. Recent Medicare payment reform evaluations have suggested that postacute care spending is responsive to episode-based incentives. However, it remains unknown whether Medicare payment policies are responsible for excess postacute care spending, compared with that of commercial payers. In ...[more]

PMID: 31479364

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Project description:ImportanceLittle is known about how out-of-pocket burden differs between Medicare and commercial insurance for ultra-expensive drugs.ObjectiveTo investigate out-of-pocket spending for ultra-expensive drugs in the Medicare Part D program vs commercial insurance.Design, setting, and participantsThis was a retrospective, population-based cohort study of individuals using ultra-expensive drugs included in a 20% nationally random sample of prescription drug claims from Medicare Part D and individuals aged 45 to 64 years using ultra-expensive drugs included in a large national convenience sample of outpatient pharmaceutical claims from commercial insurance plans. Claims data from 2013 through 2019 were used, and data were analyzed in February 2023.Main outcomes and measuresClaims-weighted mean out-of-pocket spending per beneficiary per drug by insurance type, plan, and age.ResultsIn 2019, 37 324 and 24 159 individuals using ultra-expensive drugs were identified in the 20% Part D and commercial samples, respectively (mean [SD] age, 66.2 [11.7] years; 54.9% female). A statistically significant higher share of commercial enrollees vs Part D beneficiaries were female (61.0% vs 51.0%; P < .001), and a statistically significantly lower share were using 3 or more branded medications (28.7% vs 42.6%; P < .001). Mean out-of-pocket spending per beneficiary per drug in 2019 was $4478 in Part D (median [IQR], $4169 [$3369-$5947]) compared with $1821 for commercial (median [IQR], $1272 [$703-$1924]); these differences were statistically significant every year. Differences in out-of-pocket spending comparing commercial enrollees aged 60 to 64 years and Part D beneficiaries aged 65 to 69 years exhibited similar magnitudes and trends. By plan, mean out-of-pocket spending per beneficiary per drug in 2019 was $4301 (median [IQR], $4131 [$3000-$6048]) in Medicare Advantage prescription drug (MAPD) plans, $4575 (median [IQR], $4190 [$3305-$5799]) in stand-alone prescription drug plans (PDPs), $1208 (median [IQR], $752 [$317-$1240]) in health maintenance organization plans, $1569 (median [IQR], $838 [$481-$1472]) in preferred provider organization plans, and $4077 (median [IQR], $2882 [$1075-$4226]) in high-deductible health plans. There were no statistically significant differences between MAPD plans and stand-alone PDPs in any study year. Mean out-of-pocket spending was statistically significantly higher in MAPD plans compared with health maintenance organization plans and in stand-alone PDPs compared with preferred provider organization plans in each study year.Conclusions and relevanceThis cohort study demonstrated that the $2000 out-of-pocket cap included in the Inflation Reduction Act may substantially moderate the potential increase in spending faced by individuals who use ultra-expensive drugs when moving from commercial insurance to Part D coverage.

Project description:ObjectivesTo investigate the consequences of endogeneity bias on the estimated effect of having health insurance on health at age 63 or 64, just before most people qualify for Medicare, and to simulate the implications for total and public insurance (Medicare and Medicaid) spending on newly enrolled beneficiaries in their first years of Medicare coverage.DataThe longitudinal Health and Retirement Survey of people who were 55-61 years old in 1992, followed through biannual surveys to age 63-64 or until 2000 (whichever came first), and those who were 66-70 years olds from the Medicare Current Beneficiary Surveys, 1992-1998.Study designInstrumental variable (IV) estimation of a simultaneous equation model of insurance choice and health at age 63-64 as a function of baseline health and sociodemographic characteristics in 1992 and endogenous insurance coverage over the observation period.FindingsContinuous insurance coverage is associated with significantly fewer deaths prior to age 65 and, among those who survive, a significant upward shift in the distribution of health states from fair and poor health with disabilities to good to excellent health. Treating insurance coverage as endogenous increases the magnitude of the estimated effect of having insurance on improved health prior to age 65. The medical spending simulations suggest that if the near-elderly had continuous insurance coverage, average annual medical spending per capita for new Medicare beneficiaries in their first few years of coverage would be slightly lower because of the improvement in health status. In addition, total Medicare and Medicaid spending for new beneficiaries over their first few years of coverage would be about the same or slightly lower, even though more people survive to age 65.ConclusionsExtending insurance coverage to all Americans between the ages of 55 and 64 would improve health (increase survival and shift people from good-fair-poor health to excellent-very good health) at age 65, and possibly reduce total short-term spending by Medicare and Medicaid for newly eligible Medicare beneficiaries, even though more people would enter the program because of increased survival.

Project description:ImportanceNearly one-third of Medicare beneficiaries are enrolled in a Medicare Advantage (MA) plan, yet little is known about the prices that MA plans pay for physician services. Medicare Advantage insurers typically also sell commercial plans, and the extent to which MA physician reimbursement reflects traditional Medicare (TM) rates vs negotiated commercial prices is unclear.ObjectiveTo compare prices paid for physician and other health care services in MA, traditional Medicare, and commercial plans.Design, setting, and participantsRetrospective analysis of claims data evaluating MA prices paid to physicians and for laboratory services and durable medical equipment between 2007 and 2012 in 348 US core-based statistical areas. The study population included all MA and commercial enrollees with a large national health insurer operating in both markets, as well as a 20% sample of TM beneficiaries.ExposuresEnrollment in an MA plan.Main outcomes and measuresMean reimbursement paid to physicians, laboratories, and durable medical equipment suppliers for MA and commercial enrollees relative to TM rates for 11 Healthcare Common Procedure Coding Systems (HCPCS) codes spanning 7 sites of care.ResultsThe sample consisted of 144 million claims. Physician reimbursement in MA was more strongly tied to TM rates than commercial prices, although MA plans tended to pay physicians less than TM. For a mid-level office visit with an established patient (Current Procedural Terminology [CPT] code 99213), the mean MA price was 96.9% (95% CI, 96.7%-97.2%) of TM. Across the common physician services we evaluated, mean MA reimbursement ranged from 91.3% of TM for cataract removal in an ambulatory surgery center (CPT 66984; 95% CI, 90.7%-91.9%) to 102.3% of TM for complex evaluation and management of a patient in the emergency department (CPT 99285; 95% CI, 102.1%-102.6%). However, for laboratory services and durable medical equipment, where commercial prices are lower than TM rates, MA plans take advantage of these lower commercial prices, ranging from 67.4% for a walker (HCPCS code E0143; 95% CI, 66.3%-68.5%) to 75.8% for a complete blood cell count (CPT 85025; 95% CI, 75.0%-76.6%).Conclusions and relevanceTraditional Medicare's administratively set rates act as a strong anchor for physician reimbursement in the MA market, although MA plans succeed in negotiating lower prices for other health care services for which TM overpays. Reforms that transition the Medicare program toward some premium support models could substantially affect how physicians and other clinicians are paid.

Project description:ImportanceThe benefits of public payment policy may extend to private populations through "spillover" effects. If cost-saving efforts in Medicare also reduce costs among commercially insured patients, Medicare payment systems could be a versatile policy tool in future reform efforts.ObjectivesTo determine whether physicians who participated in a Medicare Accountable Care Organization (ACO) reduced spending among their commercial patients.DesignThis was a retrospective, longitudinal study which was conducted using Blue Cross Blue Shield of Michigan (BCBSM) claims data from 2010 to 2015. We compared patients seen by physicians who participated in a Medicare ACO to patients whose physicians were not part of an ACO. We used a difference-in-differences (DIDs) design to test whether physician participation in an ACO was associated with reduced spending among their commercially insured patients. We also tested for heterogeneous effects: we assessed whether spillovers were larger among patients with clinical conditions (acute myocardial infarction, pneumonia, congestive heart failure) that have previously been targeted by Medicare payment programs.SettingThis was a population-based study of commercially insured patients in Michigan.ParticipantsPatients who experienced a significant clinical episode (eg, labor and delivery, acute myocardial infarction) between 2010 and 2015.ExposureOur patient-level exposure is treatment by a Medicare ACO-affiliated physician.Main outcomes and measuresMedical spending of 0-90 days and 91-365 days after a clinical episode.ResultsPatients in the exposure group (n=54,750) and in the control group (n=137,883) were similar in demographic characteristics of age, sex, and type of clinical episodes. Adjusted mean 90-day spending in the preexposure period was $21,292 among the exposure group and $21,157 among the comparison group; these means declined to $21,250 and $20,995 in the postperiod, yielding a DIDs estimate of $119 [95% confidence interval (CI), -$170 to $408]. Adjusted means for 91-365 days spending in the preperiod were $4258 among the exposure group and $4251 among the comparison group; these means rose to $4338 and $4421 in the postperiod, yielding a DIDs estimate of -$90 (95% CI, -$312 to $132). We also separately examined patients with conditions that have been targeted by other Medicare payment programs. Among these patients, 90-day spending did not differ between exposure and comparison groups (DIDs, -$223; 95% CI, -$2037 to $1591), although 91-365 days spending decreased among the exposure group with marginal statistical significance (DIDs, -$1160; 95% CI, -$2459 to $140).Conclusions and relevancePhysicians who participated in Medicare ACOs did not reduce spending among most of their commercially insured patients. Medicare policy is unlikely to confer significant spillover benefits to the commercially insured population.

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Spending On Postacute Care After Hospitalization In Commercial Insurance And Medicare Around Age Sixty-Five.

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Spending On Postacute Care After Hospitalization In Commercial Insurance And Medicare Around Age Sixty-Five.

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