Study Compares Hospitals Enrolled in Medicare’s Voluntary vs Mandatory Bundled Payment Programs

MedicalResearch.com Interview with:

Amol Navathe, MD, PhD Assistant Professor, Health Policy and Medicine Perelman School of Medicine University of Pennsylvania

Dr. Navathe

Amol Navathe, MD, PhD
Assistant Professor, Health Policy and Medicine
Perelman School of Medicine
University of Pennsylvania

MedicalResearch.com: What is the background for this study?

Response: Bundled payment is a key Medicare Alternative Payment Model (APM) developed by the Centers for Medicare and Medicaid Services (CMS) to increase health care value by holding health care organizations accountable for spending across an episode of care. The model provides financial incentives to maintain quality and contain spending below a predefined benchmark.

In 2013, CMS launched the Bundled Payments for Care Improvement (BPCI) initiative to expand bundled payment nationwide. BPCI’s bundled payment design formed the basis for CMS’s Comprehensive Care for Joint Replacement (CJR) Model beginning in 2016. While the programs are similar in design, BPCI is voluntary while CJR is mandatory for hospitals in selected markets. Moreover, CJR is narrower in scope, focusing only on lower extremity joint replacement (LEJR) and limiting participation to hospitals.

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Rate of End-of-Life Medicare Spending Falls

MedicalResearch.com Interview with:

William B Weeks, MD, PhD, MBA The Dartmouth Institute

Dr. Weeks

William B Weeks, MD, PhD, MBA
The Dartmouth Institute

MedicalResearch.com: What is the background for this study? What are the main findings?

Response: The background for the study is that a common narrative is that end-of-life healthcare costs are driving overall healthcare cost growth.  Growth in end-of-life care has been shown, in research studies through the mid 2000’s, to be attributable to increasing intensity of care at the end-of-life (i.e., more hospitalizations and more use of ICUs).

The main findings of our study are that indeed there have been substantial increases in per-capita end-of-life care costs within the Medicare fee-for-service population between 2004-2009, but those per-capita costs dropped pretty substantially between 2009-2014.  Further, the drop in per-capita costs attributable to Medicare patients who died (and were, therefore, at the end-of-life) accounts for much of the mitigation in cost growth that has been found since 2009 in the overall Medicare fee-for-service population.

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Maryland’s Global Budget Plan Did Not Change Hospital or Primary Care Usage

MedicalResearch.com Interview with:

Eric T. Roberts, PhD Assistant Professor of Health Policy & Management University of Pittsburgh Graduate School of Public Health Pittsburgh, PA 15261

Dr. Roberts

Eric T. Roberts, PhD
Assistant Professor of Health Policy & Management
University of Pittsburgh Graduate School of Public Health
Pittsburgh, PA 15261

MedicalResearch.com: What is the background for this study?

Response: There is considerable interest nationally in reforming how we pay health care providers and in shifting from fee-for-service to value-based payment models, in which providers assume some economic risk for their patients’ costs and outcomes of care.  One new payment model that has garnered interest among policy makers is the global budget, which in 2010 Maryland adopted for rural hospitals.  Maryland subsequently expanded the model to urban and suburban hospitals in 2014.  Maryland’s global budget model encompasses payments to hospitals for inpatient, emergency department, and hospital outpatient department services from all payers, including Medicare, Medicaid, and commercial insurers.  The intuition behind this payment model is that, when a hospital is given a fixed budget to care for the entire population it serves, it will have an incentive to avoid costly admissions and focus on treating patients outside of the hospital (e.g., in primary care practices).  Until recently, there has been little rigorous evidence about whether Maryland’s hospital global budget model met policy makers’ goals of reducing hospital use and strengthening primary care.

Our Health Affairs study evaluated how the 2010 implementation of global budgets in rural Maryland hospitals affected hospital utilization among Medicare beneficiaries.  This study complements work our research group published in JAMA Internal Medicine (January 16, 2018) that examined the impact of the statewide program on hospital and primary care use, also among Medicare beneficiaries.

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Increased Hospital Spending After Heart Attack Linked To Modestly Lower Mortality

MedicalResearch.com Interview with:
Dr. Rishi K. Wadhera MD
Clinical Fellow in Medicine
Brigham and Women’s Hospital 

MedicalResearch.com: What is the background for this study?  

Response: The Hospital Value Based Purchasing program, in which over 3,000 hospitals participate, is a Centers for Medicare and Medicaid Services (CMS) pay-for-performance program that links hospital fee per service reimbursement to performance, through measures like 30-day mortality rates after an acute myocardial infarction (a heart attack), and other measures such as average spending for an episode of care for Medicare beneficiaries. Hospitals that perform poorly on these measures are financially penalized by CMS.

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Nonphysician Clinicians Provide Wide Variety of Dermatology Services To Medicare Patients

MedicalResearch.com Interview with:

Adewole Adamson, MD, MPP Department of Dermatology UNC – Chapel Hill North Carolina

Dr. Adamson

Adewole Adamson, MD, MPP
Department of Dermatology
UNC – Chapel Hill North Carolina 

MedicalResearch.com: What is the background for this study? What are the main findings?

Response: Nurses practitioners and physician assistants, collectively known as non-physician clinicians (NPCs), provide many dermatology services, some which are billed for independently. Little is known about the types of these services provided. Even less is known about where these independently billed services are provided. Given that there is a purported shortage of dermatologists in the United States (US),  NPCs have been suggested as way to fill in the gap.

In this study, we found that NPCs independently billed for many different types of dermatology associated procedures, including surgical treatment of skin cancer, flaps, grafts, and billing for pathology. Most of these NPCs worked with dermatologists. Much like dermatologists, NPCs were unevenly distributed across the US, concentrating mostly in non-rural areas.

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Penalties for Readmissions Widens Financial Losses At Delta Safety Net Hospitals

MedicalResearch.com Interview with:

Hsueh-Fen Chen, Ph.D. Associate Professor Department of Health Policy and Management College of Public Health University of Arkansas for Medical Sciences Little Rock, AR 72205

Dr. Chen

Hsueh-Fen Chen, Ph.D.
Associate Professor
Department of Health Policy and Management
College of Public Health
University of Arkansas for Medical Sciences
Little Rock, AR 72205

MedicalResearch.com: What is the background for this study? What are the main findings?

Response: The Centers for Medicare and Medicaid Services announced the Hospital Readmissions Reduction Program (HRRP) and Hospital Value-based Purchasing (HVBP) Program in 2011 and implemented the two programs in 2013. These two programs financially motivate hospitals to reduce readmission rates and improve quality of care, efficiency, and patient experience. The Mississippi Delta Region is one of the most impoverished areas in the country, with a high proportion of minorities occupying in the region.  Additionally, these hospitals are  safety-net resources for the poor. It was largely unknown what the financial performance for the hospitals in the Mississippi Delta Region was under the HRRP and HVBP programs.

Dr. Chen and colleagues in the Fay W. Boozman College of Public Health at the University of Arkansas for Medical Sciences compared the financial performance between Delta hospitals and non-Delta hospitals (namely, other hospitals in the nation) from 2008 through 2014 that were covered before and after the implementation of the HRRP and HVBP programs. The financial performance was measured by using the operating margin (profitability from patient care) and total margin (profitability from patient care and non-patient care)

Before the implementation of the HRRP and HVBP programs, Delta hospitals had weaker financial performance than non-Delta hospitals but their differences were not statistically significant. After the implementation of the HRRP and HVBP programs, the gap in financial performance between Delta and non-Delta hospitals became wider and significant. The unadjusted operating margin for Delta hospitals was about -4.0% in 2011 and continuously fell to -10.4% in 2014, while the unadjusted operating margin for non-Delta hospitals was about 0.1% in 2011 and dropped to -1.5% in 2014. The unadjusted total margin for Delta hospitals significantly fell from 3.6% in 2012 to 1.1% in 2013 and reached 0.2% in 2014, while the unadjusted total margin for non-Delta hospitals remained about 5.3% from 2012 through 2014. After adjusting hospital and community characteristics, the difference in financial performance between Delta and non-Delta remained significant.

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Maryland All-Payer Model Produced Outpatient and ER Medicare Savings

MedicalResearch.com Interview with:
Susan G. Haber, Sc.D.

Director, Health Coverage for Low-Income and Uninsured Populations
RTI International
Waltham, MA

MedicalResearch.com: What is the background for this study? What are the main findings?

Response: In 2014, the state of Maryland and the federal Centers for Medicare and Medicaid Services (CMS) began testing an alternative payment structure for inpatient and outpatient hospital services. Known as the All-Payer Model, the new system limits hospitals’ revenues from Medicare, Medicaid, and private insurers to a global budget for the year. This builds on Maryland’s hospital rate-setting system that had operated since the 1970s, where all payers pay the same rates. CMS wanted to test whether global budgets could help Maryland limit cost growth and reduce avoidable hospital use. The goal of the model is to limit per capita total hospital cost growth for both Medicare and all payers and to generate $330 million in Medicare savings over 5 years.

RTI researchers studied the impact of hospital global budgets on Medicare beneficiary expenditures and utilization, using Medicare claims data to compare changes in Maryland before and after adoption of global budgets with changes in matched comparison areas outside of the state. Our report found Maryland has reduced total Medicare expenditures by approximately $293 million and total hospital expenditures by about $200 million in its first two years of operation. The reduction in overall expenditures indicates that “squeezing the balloon” on hospital expenditures did not simply produce a cost-shift to other health care sectors. Hospital expenditure savings for Medicare were achieved by reducing expenditures for outpatient emergency department and other hospital outpatient department services. Although inpatient admissions declined, there were no savings in Medicare expenditures for inpatient hospital services because the payment per admission increased. Maryland hospitals reduced avoidable utilization, including admissions for ambulatory care sensitive conditions, and readmissions and emergency department visits following hospital discharge. Despite the success in reducing expenditures, interviews with senior leaders at Maryland hospitals and focus group discussions with physicians and nurses suggest that many hospitals had not yet made fundamental changes in how they operate or developed partnerships with community physicians to divert care from the hospital, although there was variation in how hospitals responded.

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Global Budget in Maryland Saved Medicare Money By Limiting Hospital Costs

MedicalResearch.com Interview with:
RTI
Susan G. Haber, Sc.D. 
Director, Health Coverage for Low-Income and Uninsured Populations
RTI International
Waltham, MA 02452-8413

MedicalResearch.com: What is the background for this study?

Response: In 2014, the state of Maryland and the federal Centers for Medicare and Medicaid Services (CMS) began testing an alternative payment structure for inpatient and outpatient hospital services. Known as the All-Payer Model, the new system limits hospitals’ revenues from Medicare, Medicaid, and private insurers to a global budget for the year. This builds on Maryland’s hospital rate-setting system that had operated since the 1970s, where all payers pay the same rates. CMS wanted to test whether global budgets could help Maryland limit cost growth and reduce avoidable hospital use. The goal of the model is to limit per capita total hospital cost growth for both Medicare and all payers and to generate $330 million in Medicare savings over 5 years.

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Medicare Has Cut Radiology Payments To Physicians by 33% Over Ten Years

MedicalResearch.com Interview with:
David C. Levin, MD

Department of Radiology
Thomas Jefferson University Hospital
Philadelphia, PA 19107.

MedicalResearch.com: What is the background for this study? What are the main findings?

Response: Radiology had been previously identified as the most rapidly growing of all physician services in the Medicare program during the early years of the 2000-2009 decade. But there have been deep cuts in imaging reimbursement since then. We wanted to determine how these cuts have affected total Medicare payments for imaging.

Our main findings were that since 2006, payments to physicians for imaging under the Medicare Physician Fee schedule have dropped by $4 billion per year, or about 33%.

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End-of-Life Care Transition Patterns of Medicare Beneficiaries

MedicalResearch.com Interview with:
Shi-Yi Wang MD, PhD.

Department of Chronic Disease Epidemiology
Yale School of Public Health
New Haven, CT

MedicalResearch.com: What is the background for this study? What are the main findings?

Response: Care at the end of life is often fragmented and poorly coordinated across different health providers. Multiple transitions in care settings can be burdensome to patients and their families as well as costly to society. Despite these concerns about care transitions in the end of life, we lack contemporary data on the number, timing, and overall pattern of healthcare transitions in the last 6 months of life.

This study adds to the extant literature by understanding transition trajectories, national variation of the transitions, and factors associated with transitions. We found that more than 80% of Medicare fee-for-service decedents had at least one health care transition and approximately one-third had ≥ 4 transitions in the last 6 months of life. We produced Sankey diagrams to visualize the sequences of healthcare transitions. The most frequent transition pattern involving at least four transitions: home-hospital-home (or skilled nursing facility)-hospital-healthcare setting other than hospital. There was substantial geographic variation in healthcare transitions in the United States. We found that several factors were associated with a significantly increased risk of having multiple transitions, including female gender, blacks, residence in lower income areas, presence of heart disease or kidney disease.

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