Association of the Home Health Value-Based Purchasing Model With Quality, Utilization, and Medicare Payments After the First 5 Years.

Importance: The original Home Health Value-Based Purchasing (HHVBP) model provided financial incentives to home health agencies for quality improvement in 9 randomly selected US states. Objective: To evaluate quality, utilization, and Medicare payments for home health patients in HHVBP states compared with those in comparison states. Design, Setting, and Participants: This cohort study was conducted in 2021 with secondary data from January 2013 to December 2020. A difference-in-differences design and multivariate linear regression were used to compare outcomes for Medicare and Medicaid beneficiaries who received home health care in HHVBP states with those in 41 comparison states during 3 years of preintervention (2013-2015) and the subsequent 5 years (2016-2020). Exposures: Home health care provided by a home health agency in HHVBP states and comparison states. Main Outcomes and Measures: Utilization (unplanned hospitalizations, emergency department visits, skilled nursing facility [SNF] visits) for Medicare beneficiaries within 60 days of beginning home health, Medicare payments during and 37 days after home health episodes, and quality of care (functional status, patient experience) during home health episodes. Results: Among 34 058 796 home health episodes (16 584 870 beneficiaries; mean [SD] age of 76.6 [11.7] years; 60.5% female; 11.2% Black non-Hispanic; 79.5% White non-Hispanic) from January 2016 to December 2020, 22.6% were in HHVBP states and 77.4% were in non-HHVBP states. For the HHVBP and non-HHVBP groups, 60.4% and 61.0% of episodes were provided to female patients; 10.0% and 13.6% were provided to Black non-Hispanic patients, and 82.4% and 75.2% were provided to White non-Hispanic patients, respectively. Unplanned hospitalizations decreased by 0.15 percentage points (95% CI, -0.30 to -0.01) more in HHVBP states, a 1.0% decline compared with 15.7% at baseline. The use of SNFs decreased by 0.34 percentage points (95% CI, -0.40 to -0.27) more in HHVBP states, a 6.9% decline compared with the 4.9% baseline average. There was an association between HHVBP and a reduction in average Medicare payments per day of $2.17 (95% CI, -$3.67 to -$0.68) in HHVBP states, primarily associated with reduced inpatient and SNF services, which corresponded to an average annual Medicare savings of $190 million. There was greater functional improvement in HHVBP states than comparison states and no statistically significant change in emergency department use or most measures of patient experience. Conclusions and Relevance: In this cohort study, the HHVBP model was associated with lower Medicare payments that were associated with lower utilization of inpatient and SNF services, with better or similar quality of care.

The Role of Social Risk Factors in Dialysis Quality and Patient Outcomes Under a Medicare Quality Incentive Program.

BACKGROUND: There have been critical improvements in dialysis care and mortality in the last decade. These improvements track with the implementation of the end-stage renal disease (ESRD) Quality Incentive Program (QIP) beginning in 2012, which aligns Medicare payments to dialysis facilities with performance on quality measures. This study explores whether the improvements in dialysis care and patient outcomes under the ESRD QIP have been shared equally among patient groups. METHODS: Our analyses focus on 4 social risk factors: Black race, Hispanic ethnicity, dual eligibility for Medicare and Medicaid, and rurality. We estimated multivariable regressions using longitudinal Medicare and Consolidated Renal Operations in a Web-Enabled Network data. RESULTS: ESRD QIP payment reductions were more common at dialysis facilities with higher proportions of Black and dual-eligible ESRD patients. Patients with dual eligibility and Black race had persistently worse relative outcomes as the ESRD QIP was implemented. This finding was true for differences in outcomes when comparing patients within and across facilities and was not affected by the addition of specific quality measures to the ESRD QIP measure set. Hispanic patients and patients at rural facilities have generally not had worse outcomes since the start of the ESRD QIP. CONCLUSIONS: There is no evidence of widening disparities in dialysis care or patient outcomes across patient groups under the ESRD QIP, which is a longstanding and well-publicized concern with value-based purchasing programs. Relative changes between patient groups since the start of ESRD QIP have not favored any patient group. Many disparities in dialysis quality measures and assessment of dialysis facility payment reductions persist.

Peritoneal Dialysis Patient Outcomes under the Medicare Expanded Dialysis Prospective Payment System.

BACKGROUND AND OBJECTIVES: Peritoneal dialysis (PD) use increased in the United States with the introduction of a new Medicare prospective payment system in January 2011 that likely reduced financial disincentives for facility use of this home therapy. The expansion of PD to a broader population and facilities having less PD experience may have implications for patient outcomes. We assessed the impact of PD expansion on PD discontinuation and patient mortality. DESIGN, SETTING, PARTICIPANTS, & MEASUREMENTS: A prospective cohort study was conducted of patients treated with PD at 90 days of ESKD. Patients were grouped by study start date relative to the Medicare payment reform: prereform (July 1, 2008 to December 31, 2009; n=10,585), interim (January 1, 2010 to December 31, 2010; n=7832), and reform period (January 1, 2011 to December 31, 2012; n=18,742). Patient characteristics and facility PD experience were compared at baseline (day 91 of ESKD). Patients were followed for 3 years for the major outcomes of PD discontinuation and mortality using Cox proportional hazards models. RESULTS: Patient characteristics, including age, sex, race, ethnicity, rurality, cause of ESKD, and comorbidity, were similar or showed small changes across the three study periods. There was an increasing tendency for patients on PD to be treated in facilities with less PD experience (from 34% during the prereform period being treated in facilities averaging <14 patients on PD per year to 44% in the reform period). Patients treated in facilities with less PD experience had a higher rate of PD discontinuation than patients treated in facilities with the most experience (hazard ratio [HR], 1.16; 95% confidence interval [95% CI], 1.10 to 1.23 for the first versus fifth quintile of PD experience). Nevertheless, the risk of PD discontinuation fell during the late interim period (HR, 0.88; 95% CI, 0.82 to 0.95) and most of the reform period (from HR, 0.85; 95% CI, 0.79 to 0.91 to HR, 0.94; 95% CI, 0.87 to 1.01). Mortality risk was stable across the three study periods. CONCLUSIONS: In the context of expanding PD use and declining facility PD experience, the risk of PD discontinuation fell, and there was no adverse effect on mortality. PODCAST: This article contains a podcast at https://www.asn-online.org/media/podcast/CJASN/2019_09_12_CJN01610219.mp3.

Does One Size Fit All With the Effects of Payment Reform? Dialysis Facility Payer Mix and Anemia Management Under the Expanded Medicare Prospective Payment System.

BACKGROUND: The effects of Medicare payment reforms aiming to improve the efficiency and quality of care by establishing greater financial accountability for providers may vary based on the extent and types of other coverage for their patient populations. Providers who are more resource constrained due to a less favorable payer mix face greater financial risks under such reforms. The impact of the expanded Medicare dialysis prospective payment system (PPS) on quality of care in independent dialysis facilities may vary based on the extent of higher payments from private insurers available for managing increased risks. OBJECTIVES: To evaluate whether anemia outcomes for dialysis patients in independent facilities differ under the Medicare PPS based on facility payer mix. DESIGN: We examined changes in anemia outcomes for 122,641 Medicare dialysis patients in 921 independent facilities during 2009-2014 among facilities with differing levels of employer insurance (EI). We performed similar analyses of facilities affiliated with large dialysis organizations, whose practices were not expected to change based on facility-specific payer mix. RESULTS: Among independent facilities, similar modeled trends in low hemoglobin for all 3 facility EI groups in 2009-2010 were followed by increased low hemoglobin during 2012-2014 for facilities with lower EI (P<0.01). Post-PPS standardized blood transfusion ratios were 9% higher for lower EI versus higher EI independent facilities (P<0.01). Among large dialysis organizations facilities, there was no divergence in low hemoglobin by payer mix under the PPS. CONCLUSIONS: There is evidence of poorer quality of care for anemia under the PPS in independent facilities with lower versus higher EI. Provider responses to payment reform may vary based on attributes such as payer mix that could have implications for health disparities.

Secular Trends in the Cost of Immunosuppressants after Solid Organ Transplantation in the United States.

BACKGROUND AND OBJECTIVES: Immunosuppressive medications are critical for maintenance of graft function in transplant recipients but can represent a substantial financial burden to patients and their insurance carriers. DESIGN, SETTING, PARTICIPANTS, & MEASUREMENTS: To determine whether availability of generic immunosuppressive medications starting in 2009 may have alleviated some of that burden, we used Medicare Part D prescription drug events between 2008 and 2013 to estimate the average annualized per-patient payments made by patients and Medicare in a large national sample of kidney, liver, and heart transplant recipients. Repeated measures linear regression was used to determine changes in payments over the study period. RESULTS: Medicare Part D payments for two commonly used immunosuppressive medications, tacrolimus and mycophenolic acid (including mycophenolate mofetil and mycophenolate sodium), decreased overall by 48%-67% across organs and drugs from 2008 to 2013, reflecting decreasing payments for brand and generic tacrolimus (21%-54%), and generic mycophenolate (72%-74%). Low-income subsidy payments, which are additional payments made under Medicare Part D, also decreased during the study period. Out-of-pocket payments by patients who did not receive the low-income subsidy decreased by more than those who did receive the low-income subsidy (63%-79% versus 24%-44%). CONCLUSIONS: The decline in payments by Medicare Part D and by transplant recipients for tacrolimus and mycophenolate between 2008 and 2013 suggests that the introduction of generic immunosuppressants during this period has resulted in substantial cost savings to Medicare and to patients, largely reflecting the transition from brand to generic products.

The adoption of generic immunosuppressant medications in kidney, liver, and heart transplantation among recipients in Colorado or nationally with Medicare part D.

The transplant community is divided regarding whether substitution with generic immunosuppressants is appropriate for organ transplant recipients. We estimated the rate of uptake over time of generic immunosuppressants using US Medicare Part D Prescription Drug Event (PDE) and Colorado pharmacy claims (including both Part D and non-Part D) data from 2008 to 2013. Data from 26 070 kidney, 15 548 liver, and 6685 heart recipients from Part D, and 1138 kidney and 389 liver recipients from Colorado were analyzed. The proportions of patients with PDEs or claims for generic and brand-name tacrolimus or mycophenolate mofetil were calculated over time by transplanted organ and drug. Among Part D kidney, liver, and heart beneficiaries, the proportion dispensed generic tacrolimus reached 50%-56% at 1 year after first generic approval and 78%-81% by December 2013. The proportion dispensed generic mycophenolate mofetil reached 70%-73% at 1 year after generic market entry and 88%-90% by December 2013. There was wide interstate variability in generic uptake, with faster uptake in Colorado compared with most other states. Overall, generic substitution for tacrolimus and mycophenolate mofetil for organ transplant recipients increased rapidly following first availability, and utilization of generic immunosuppressants exceeded that of brand-name products within a year of market entry.

Persistent Variation in Medicare Payment Authorization for Home Hemodialysis Treatments.

OBJECTIVE: To analyze variation in medical care use attributable to Medicare's decentralized claims adjudication process as exemplified in home hemodialysis (HHD) therapy. DATA SOURCES/STUDY SETTING: Secondary data analysis using 2009-2012 paid Medicare claims for HHD and in-center hemodialysis (IHD). STUDY DESIGN: We compared variation across Medicare administrative contractors (MACs) in predicted paid treatments per standardized patient-month for HHD and IHD patients. We used ordinary least-squares regression to determine whether higher paid HHD treatment counts expanded HHD programs' presence among dialysis facilities. DATA COLLECTION: We identified HHD and IHD treatments using procedure, revenue center, and claim condition codes on type 72x claims. PRINCIPAL FINDINGS: MACs varied persistently in predicted HHD treatments per patient-month, ranging from 14.3 to 21.9 treatments versus 10.9 to 12.4 IHD treatments. The presence of facilities' HHD programs was uncorrelated with average HHD payment counts. CONCLUSIONS: Medicare's claims adjudication process promotes variation in medical care use, as we observe among HHD patients. MACs' discretionary decision making, while potentially facilitating innovation, may admit inefficiency in care practice as well as inequitable access to health care services. Regulators should weigh the benefits of flexibility in local coverage decisions against those of national standards for medical necessity.

Payment Reform and Health Disparities: Changes in Dialysis Modality under the New Medicare Dialysis Payment System.

OBJECTIVE: To evaluate the effect of the Medicare dialysis payment reform on potential disparities in the selection of peritoneal dialysis (PD) for the treatment of end-stage renal disease (ESRD). DATA SOURCES: Centers for Medicare & Medicaid Services (CMS) ESRD Medical Evidence Form, Medicare claims, and other CMS data for 2008-2013. STUDY DESIGN: We examined the association of patient age, race/ethnicity, urban/rural location, pre-ESRD care, comorbidities, insurance, and other factors with the selection of PD as initial dialysis modality across prereform (2008-2009), interim (2010), and postreform (2011-2013) time periods. PRINCIPAL FINDINGS: Selection of PD increased among diverse patient subgroups following the payment reform. However, the lower PD selection observed with older age, black race, Hispanic ethnicity, less pre-ESRD care, and Medicaid insurance before the reform largely remained in the initial postreform years. CONCLUSIONS: Despite recent growth in PD, there may be ongoing disparities in access to PD that have largely not been mitigated by the payment reform. There is potential for modifying provider financial incentives to achieve policy goals related to cost and quality of care. However, even with a substantial shift in financial incentives, separate initiatives to reduce existing disparities in care may be needed.

Risk Adjustment and the Assessment of Disparities in Dialysis Mortality Outcomes.

Standardized mortality ratios (SMRs) reported by Medicare compare mortality at individual dialysis facilities with the national average, and are currently adjusted for race. However, whether the adjustment for race obscures or clarifies disparities in quality of care for minority groups is unknown. Cox model-based SMRs were computed with and without adjustment for patient race for 5920 facilities in the United States during 2010. The study population included virtually all patients treated with dialysis during this period. Without race adjustment, facilities with higher proportions of black patients had better survival outcomes; facilities with the highest percentage of black patients (top 10%) had overall mortality rates approximately 7% lower than expected. After adjusting for within-facility racial differences, facilities with higher proportions of black patients had poorer survival outcomes among black and non-black patients; facilities with the highest percentage of black patients (top 10%) had mortality rates approximately 6% worse than expected. In conclusion, accounting for within-facility racial differences in the computation of SMR helps to clarify disparities in quality of health care among patients with ESRD. The adjustment that accommodates within-facility comparisons is key, because it could also clarify relationships between patient characteristics and health care provider outcomes in other settings.

Has dialysis payment reform led to initial racial disparities in anemia and mineral metabolism management?

Implementation of the Medicare ESRD prospective payment system (PPS) and changes to dosing guidelines for erythropoiesis-stimulating agents (ESAs) in 2011 appear to have influenced use of injectable medications among dialysis patients. Given historically higher ESA and vitamin D use among black patients, we assessed the effect of these policy changes on racial disparities in the management of anemia and mineral metabolism. Analyses used cross-sectional monthly cohorts for a period-prevalent sample of 7384 maintenance hemodialysis patients at 132 facilities from the Dialysis Outcomes and Practice Patterns Study (DOPPS) Practice Monitor. Linear splines with knots at each policy change were used in survey-weighted regressions to estimate time trends in hemoglobin (Hgb), erythropoietin (EPO) dose, intravenous (IV) iron dose, ferritin, transferrin saturation (TSAT) concentration, parathyroid hormone (PTH), IV vitamin D dose, cinacalcet use, and phosphate binder use. From August 2010 to December 2011, mean Hgb declined from 11.5 to 11.0 g/dl (P<0.001), mean EPO dose declined from 20,506 to 14,777 U/wk (P<0.001), and mean serum PTH increased from 340 to 435 pg/ml (P<0.001). No meaningful differences by race were observed regarding the rates of change of management practices or laboratory measures (all P>0.21). Mean EPO and vitamin D dose and serum PTH levels remained higher in blacks. Despite evidence that anemia and mineral metabolism management practices have changed significantly over time, there was no immediate indication of racial disparities resulting from implementation of the PPS or ESA label change. Further studies are needed to examine effects among patient and facility subgroups.

Blood transfusion practices in dialysis patients in a dynamic regulatory environment.

BACKGROUND: In 2011, Medicare implemented a prospective payment system (PPS) covering an expanded bundle of services that excluded blood transfusions. This led to concern about inappropriate substitution of transfusions for other anemia management methods. STUDY DESIGN: Medicare claims were used to calculate transfusion rates among dialysis patients pre- and post-PPS. Linear probability regressions adjusted transfusion trends for patient characteristics. SETTING & PARTICIPANTS: Dialysis patients for whom Medicare was the primary payer between 2008 and 2012. PREDICTOR: Pre-PPS (2008-2010) versus post-PPS (2011-2012). OUTCOMES & MEASUREMENTS: Monthly and annual probability of receiving one or more blood transfusions. RESULTS: Monthly rates of one or more transfusions varied from 3.8%-4.8% and tended to be lowest in 2010. Annual rates of transfusion events per patient were -10% higher in relative terms post-PPS, but the absolute magnitude of the increase was modest (-0.05 events/patient). A larger proportion received 4 or more transfusions (3.3% in 2011 and 2012 vs 2.7%-2.8% in prior years). Controlling for patient characteristics, the monthly probability of receiving a transfusion was significantly higher post-PPS (ß = 0.0034; P < 0.001), representing an -7% relative increase. Transfusions were more likely for females and patients with more comorbid conditions and less likely for blacks both pre- and post-PPS. LIMITATIONS: Possible underidentification of transfusions in the Medicare claims, particularly in the inpatient setting. Also, we do not observe which patients might be appropriate candidates for kidney transplantation. CONCLUSIONS: Transfusion rates increased post-PPS, but these increases were modest in both absolute and relative terms. The largest increase occurred for patients already receiving several transfusions. Although these findings may reduce concerns regarding the impact of Medicare's PPS on inappropriate transfusions that impair access to kidney transplantation or stress blood bank resources, transfusions should continue to be monitored.

The initial impact of Medicare's new prospective payment system for kidney dialysis.

BACKGROUND: Medicare implemented a new prospective payment system (PPS) on January 1, 2011. This PPS covers an expanded bundle of services, including services previously paid on a fee-for-service basis. The objectives of the new PPS include more efficient decisions about treatment service combinations and modality choice. METHODS: Primary data for this study are Medicare claims files for all dialysis patients for whom Medicare is the primary payer. We compare use of key injectable medications under the bundled PPS to use when those drugs were separately billable and examine variability across providers. We also compare each patient's dialysis modality before and after the PPS. RESULTS: Use of relatively expensive drugs, including erythropoiesis-stimulating agents, declined substantially after institution of the new PPS, whereas use of iron products, often therapeutic substitutes for erythropoiesis-stimulating agents, increased. Less expensive vitamin D products were substituted for more expensive types. Drug spending overall decreased by ∼$25 per session, or about 5 times the mandated reduction in the base payment rate of ∼$5. Use of peritoneal dialysis increased in 2011 after being nearly flat in the years prior to the PPS, with the increase concentrated in patients in their first or second year of dialysis. Home hemodialysis continued to increase as a percentage of total dialysis services, but at a rate similar to the pre-PPS trend. CONCLUSION: The expanded bundle dialysis PPS provided incentives for the use of lower cost therapies. These incentives seem to have motivated dialysis providers to move toward lower cost methods of care in both their use of drugs and choice of modalities.

The Dialysis Outcomes and Practice Patterns Study (DOPPS) Practice Monitor: rationale and methods for an initiative to monitor the new US bundled dialysis payment system.

A new initiative of the US Dialysis Outcomes and Practice Patterns Study (DOPPS), the DOPPS Practice Monitor (DPM), provides up-to-date data and analyses to monitor trends in dialysis practice during implementation of the new Centers for Medicare & Medicaid Services (CMS) end-stage renal disease Prospective Payment System (PPS; 2011-2014). We review DPM rationale, design, sampling approach, analytic methods, and facility sample characteristics. Using stratified random sampling, the sample of ~145 US facilities provides results representative nationally and by facility type (dialysis organization size, rural/urban, free standing/hospital based), achieving coverage similar to the CMS sample frame at average values and tails of the distributions for key measures and patient characteristics. A publicly available web report (www.dopps.org/DPM) provides detailed trends, including demographic, comorbidity, and dialysis data; medications; vascular access; and quality of life. Findings are updated every 4 months with a lag of only 3-4 months. Baseline data are from mid-2010, before the new PPS. In sum, the DPM provides timely representative data to monitor effects of the expanded PPS on dialysis practice. Findings can serve as an early warning system for possible adverse effects on clinical care and as a basis for community outreach, editorial comment, and informed advocacy.

Using race as a case-mix adjustment factor in a renal dialysis payment system: potential and pitfalls.

BACKGROUND: Racial disparities in health care are widespread in the United States. Identifying contributing factors may improve care for underserved minorities. To the extent that differential utilization of services, based on need or biological effect, contributes to outcome disparities, prospective payment systems may require inclusion of race to minimize these adverse effects. This research determines whether costs associated with end-stage renal disease (ESRD) care varied by race and whether this variance affected payments to dialysis facilities. STUDY DESIGN: We compared the classification of race across Medicare databases and investigated differences in cost of care for long-term dialysis patients by race. SETTING & PARTICIPANTS: Medicare ESRD database including 890,776 patient-years in 2004-2006. PREDICTORS: Patient race and ethnicity. OUTCOMES: Costs associated with ESRD care and estimated payments to dialysis facilities under a prospective payment system. RESULTS: There were inconsistencies in race and ethnicity classification; however, there was significant agreement for classification of black and nonblack race across databases. In predictive models evaluating the cost of outpatient dialysis care for Medicare patients, race is a significant predictor of cost, particularly for cost of separately billed injectable medications used in dialysis. Overall, black patients had 9% higher costs than nonblack patients. In a model that did not adjust for race, other patient characteristics accounted for only 31% of this difference. LIMITATIONS: Lack of information about biological causes of the link between race and cost. CONCLUSIONS: There is a significant racial difference in the cost of providing dialysis care that is not accounted for by other factors that may be used to adjust payments. This difference has the potential to affect the delivery of care to certain populations. Of note, inclusion of race into a prospective payment system will require better understanding of biological differences in bone and anemia outcomes, as well as effects of inclusion on self-reported race.

Do resource utilization and clinical measures still vary across dialysis chains after controlling for the local practices of facilities and physicians?

BACKGROUND: Because of adverse survival effects, anemia management and financial incentives to increase doses of erythropoiesis-stimulating agents (ESAs) have been controversial. Prior studies showed more aggressive anemia management in dialysis facilities owned by for-profit chains, but have been criticized for not accounting for practices of individual physicians and facilities. OBJECTIVE: To improve understanding of how dialysis practices and resource utilization are influenced by physicians, facilities, and chains. DESIGN: Mixed models with chain fixed effects and facility and physician random effects. SETTING: Medicare hemodialysis patients in 2004. PARTICIPANTS: A total of 234,158 patients, 3995 facilities, 4838 physicians, and 7 chain classifications were included. MEASUREMENTS: Spending per session for dialysis-related services billed separately from the dialysis treatment and for ESAs. Achievement of hematocrit (HCT) and urea reduction ratio (URR) targets. RESULTS: Of the 4 largest for-profit chains, 3 had higher resource use than independents, with differences up to $17.92 higher ESA/session. Utilization was positively associated with achieving target HCT. Despite incurring lower costs, patients treated by a large nonprofit chain were as likely as patients of independents to achieve the HCT target. The largest chains were more likely than independents to achieve the URR target. Substantial variation occurred across physicians and facilities, and adjustment for chain only modestly decreased this variation. LIMITATION: Chains' methods of influencing practices were not directly observed. CONCLUSIONS: Chains appear to have the ability to implement protocols that shift practices, but not the ability to substantially reduce local variation. Assertions that chain effects found by earlier studies were spurious are not supported.

When payment systems collide: the effect of hospitalization on anemia in renal dialysis patients.

BACKGROUND: Different types of providers often face differing financial incentives for providing similar types of care. This may have implications for payment systems that target improvements in care requiring multiple types of providers. OBJECTIVES: The objective of this study was to determine how hospitalization influences the anemia of Medicare patients with chronic renal failure, where anemia is treated under a prospective payment system during hospitalizations and under a fee-for-service system during outpatient renal dialysis. METHODS: We examined the effects of time in hospital and reason for hospitalization on levels of anemia among 87,263 Medicare renal dialysis patients with a hospital stay of 3 days or more during 2004. Medicare claims were used to measure changes in hematocrit between the month before and the month after hospital discharge, and to classify admissions with a high risk of anemia. Multilevel models were used to study variation in outcomes across providers. RESULTS: Longer time in the hospital was associated with worsening anemia. As expected, larger declines in hematocrit occurred following admissions for conditions or procedures with a high risk of anemia. However, we observed a similar effect of time in the hospital for admissions both with and without a high risk of anemia. There were relatively large differences in anemia outcomes across both individual hospitals and physicians. CONCLUSIONS: Hospitalization-related anemia increases the need for care by outpatient renal dialysis providers. Efforts to improve care through payment system design are more likely to be successful if financial incentives are aligned across care settings.

Provider monitoring and pay-for-performance when multiple providers affect outcomes: An application to renal dialysis.

OBJECTIVE: To characterize the influence of dialysis facilities and nephrologists on resource use and patient outcomes in the dialysis population and to illustrate how such information can be used to inform payment system design. DATA SOURCES: Medicare claims for all hemodialysis patients for whom Medicare was the primary payer in 2004, combined with the Medicare Enrollment Database and the CMS Medical Evidence Form (CMS Form 2728), which is completed at onset of renal replacement therapy. STUDY DESIGN: Resource use (mainly drugs and laboratory tests) per dialysis session and two clinical outcomes (achieving targets for anemia management and dose of dialysis) were modeled at the patient level with random effects for nephrologist and dialysis facility, controlling for patient characteristics. RESULTS: For each measure, both the physician and the facility had significant effects. However, facilities were more influential than physicians, as measured by the standard deviation of the random effects. CONCLUSIONS: The success of tools such as P4P and provider profiling relies upon the identification of providers most able to enhance efficiency and quality. This paper demonstrates a method for determining the extent to which variation in health care costs and quality of care can be attributed to physicians and institutional providers. Because variation in quality and cost attributable to facilities is consistently larger than that attributable to physicians, if provider profiling or financial incentives are targeted to only one type of provider, the facility appears to be the appropriate locus.

Using knowledge of multiple levels of variation in care to target performance incentives to providers.

BACKGROUND: In developing "pay-for-performance" and capitation systems that provide incentives for improving the quality and efficiency of care, policymakers need to determine which healthcare providers to evaluate and reward. OBJECTIVES: This study demonstrates methods for determining and understanding the relative contributions of facilities and physicians to the quality and cost of care. Specifically, this study distinguishes levels of variation in resource utilization (RU), based on research to support the development of an expanded Medicare dialysis prospective payment system. RESEARCH DESIGN: Mixed models were used to estimate the variation in RU across institutional providers, physicians, patients, and months (within patients), after adjusting for case-mix. SUBJECTS: The study includes 10,367 Medicare hemodialysis patients treated in a 4.2% stratified random sample of dialysis facilities in 2003. MEASURES: Monthly RU was measured by the average Medicare allowable charge per dialysis session for separately billable dialysis-related services (mainly injectable medications and laboratory tests) from Medicare claims. RESULTS: There was financially significant variation in RU across institutional providers and to a lesser degree across physicians, after adjusting for differences in case-mix. The remaining variation in RU reflects unexplained differences across patients that persist over time and transitory fluctuations for individual patients. CONCLUSIONS: The greater variation in RU occurring across dialysis facilities than across physicians is consistent with targeting payments to facilities, but alignment of incentives between facilities and physicians remains an important goal. Similar analytic methods may be useful in designing payment policies that reward providers for improving the quality of care.

Case-mix adjustment for an expanded renal prospective payment system.

Medicare is considering an expansion of the bundle of dialysis-related services to be paid on a prospective basis. Exploratory models were developed to assess the potential limitations of case-mix adjustment for such an expansion. A broad set of patient characteristics explained 11.8% of the variation in Medicare allowable charges per dialysis session. Although adding recent hematocrit values or prior health care utilization to the model did increase explanatory power, it could also create adverse incentives. Projected gains or losses relative to prevailing fee-for-service payments, assuming no change in practice patterns, were significant for some individual providers. However, systematic gains or losses for different classes of providers were modest.