Using Claims-Based Estimates of Post-Operative Visits to Revalue Procedures with 10- and 90-Day Global Periods: Updated Results Using Calendar Year 2019 Data.

Medicare payment for many health care procedures covers not only the procedure itself but also most post-operative care over a fixed period of time (the ""global period""). The Centers for Medicare & Medicaid Services (CMS) sets payment rates assuming that a certain number and type of post-operative visits specific to each procedure typically occur. This article describes how CMS might use claims-based data on the number of post-operative visits to adjust valuation for procedures with 10- and 90-day global periods. There are links between the number of bundled post-operative visits and the components of valuation addressed in this study: work, practice expense (PE), and malpractice relative value units (RVUs). There is some ambiguity regarding how a reduction in post-operative visits translates into changes in work RVUs. In contrast, a reduction in post-operative visits has clear implications on physician time and direct PE. Changes in physician work, physician time, and direct PE will, in turn, affect the allocation of pools of PE and malpractice RVUs to individual services. The idiosyncrasies of the resource-based relative value scale system used to determine payment for Medicare services result in some ambiguity about how procedures should be revalued to reflect reductions in post-operative visits. These results may inform further policy development around revaluation for global procedures.

Claims-Based Reporting of Post-Operative Visits for Procedures with 10- or 90-Day Global Periods: Updated Results Using Calendar Year 2018 Data.

Medicare payments for most surgical procedures cover both procedures and post-operative visits occurring within a global period of either ten or 90 days following procedures. There have been concerns that fewer post-operative visits are provided than the number of post-operative visits considered when the procedure was valued. To help inform accurate valuation of procedures with global periods, the Centers for Medicare & Medicaid Services (CMS) required select practitioners to report on post-operative visits after select procedures with 10- or 90-day global periods. The authors of this article summarize patterns of post-operative visits for procedures furnished during calendar year 2018, building on prior research that analyzed data for procedures with July 1, 2017, through June 30, 2018, service dates. During calendar year 2018, 96.5 percent of procedures with 10-day global periods did not have an associated post-operative visit. Approximately two-thirds of procedures with 90-day global periods had an associated post-operative visit; however, the ratio of observed to expected post-operative visits provided for 90-day global period procedures was only 0.38. Underreporting of post-operative visits might be driving these low rates. However, in sensitivity analyses limited to practitioners who were actively reporting their post-operative visits, post-operative patterns were largely similar to the main analysis. Collectively, these findings suggest that a large share of expected post-operative visits are not delivered, and that underreporting is unlikely to fully explain the low ratio of expected post-operative visits provided.

Claims-Based Reporting of Post-Operative Visits for Procedures with 10- or 90-Day Global Periods: Updated Results Using Calendar Year 2019 Data.

Medicare payments for most surgical procedures cover both procedures and post-operative visits occurring within a global period of either 10 or 90 days following procedures. There have been concerns that fewer post-operative visits are provided than the number of post-operative visits considered when the procedure was valued. To help inform accurate valuation of procedures with global periods, the Centers for Medicare & Medicaid Services (CMS) required select practitioners to report on post-operative visits after select procedures with 10- or 90-day global periods. The authors of this article summarize patterns of post-operative visits for procedures furnished during calendar year 2019, building on prior research that analyzed data for procedures furnished from July 1, 2017, through June 30, 2018, and for the entire 2018 calendar year. During calendar year 2019, 96.5 percent of procedures with 10-day global periods did not have an associated post-operative visit. Approximately two-thirds of procedures with 90-day global periods had an associated post-operative visit; however, the ratio of observed to expected post-operative visits provided for 90-day global period procedures was only 0.38. Underreporting of post-operative visits might be driving these low rates. However, in sensitivity analyses limited to practitioners who were actively reporting their post-operative visits, post-operative patterns were largely similar to the main analysis. Collectively, these findings suggest that many expected post-operative visits are not delivered and that underreporting is unlikely to fully explain the low ratio of expected post-operative visits provided.

Barriers to Price and Quality Transparency in Health Care Markets.

Consumers of health care in the United States often lack information on the actual prices of the care they receive and can also lack access to information about the quality of their care. RAND researchers gathered information on how health care prices are set, price variation in health care markets, barriers to price and quality transparency for consumers, and the extent to which price and quality information is used in marketing efforts. Public payers typically set prices for physicians and hospitals prospectively, and commercial health plans negotiate with physicians and hospitals to determine prices. Some research has shown substantial variation in negotiated prices, while other research suggests more moderate variation in some markets. Although the government does not directly affect prices paid by commercial health plans, commercial prices tend to be positively correlated with Medicare fee-for-service prices. Medicaid receives mandated rebates from drug manufacturers for dispensed prescriptions. Commercial health plans negotiate both the prices paid to pharmacies and any discounts and rebates received directly from drug manufacturers. Self-pay prices faced by consumers in pharmacies are set by individual pharmacies. The barriers to consumer price and quality transparency identified through this work generally represented limitations of existing tools. Consumer price transparency is being pursued by federal and state governments. Most commercial insurers have created price transparency tools to help members estimate the costs of various services. However, these tools can be difficult to navigate and do not always provide accurate pricing.

Prescription Drug Supply Chains: An Overview of Stakeholders and Relationships.

The authors describe the stakeholders involved in prescription drug supply chains and the flows of products, payments, and information between stakeholders. Many stakeholders and steps are involved in the life cycle of a prescription drug as it moves from chemical synthesis and formulation through dispensing or administration to patients. The specific steps involved in prescription drug supply chains often differ depending on the type of drug, the channel of distribution, and the patient's source of prescription drug coverage. Although the authors present a typical supply chain for retail pharmacy drugs, they also highlight the important supply chain distinctions for specific distribution channels and for specific types of drugs. Disparate sources exist describing each component of the supply chain, but, to the authors' knowledge, this study is the first to compile them to facilitate understanding of their interdependence and complexity. The typical stakeholders, relationships, and financial incentives in prescription drug supply chains vary depending on the characteristics of a drug and how it reaches patients. Even within a specific type of drug and a particular distribution channel, differences in business practices complicate a universal description of drug supply chains. There are four common core components of drug supply chains: manufacturing, distribution, coverage and payment, and prescribing and demand. Although prescription drugs are generally available to dispense when prescribed in the United States, there are important exceptions that warrant further investigation. The ability of policymakers to identify, assess, and respond to shortages and disruptions in supply chains is hampered by incomplete data.

Practice Expense Data Collection and Methodology: Phase II Final Report.

Each year, Medicare allocates tens of billions of dollars for indirect practice expense (PE) across services on the basis of data from the Physician Practice Information (PPI) Survey, which reflects 2006 expenses. Because these data are not regularly updated, and because there have been significant changes in the U.S. economy and health care system since 2006, there are concerns that continued reliance on PPI Survey data might result in PE payments that do not accurately capture the resources that are typically required to provide services. In this final phase of a study on PE methodology, the authors address how the Centers for Medicare & Medicaid Services (CMS) might improve the methodology used in PE rate-setting, update data that inform PE rates, or both. The authors conclude that this information is best provided by a survey; therefore, they focus on the advantages and disadvantages of survey-based approaches. They also describe the use of a lean model survey instrument, as well as partnering with another agency to collect data. Finally, the authors describe a virtual town hall meeting held in June 2021 to give stakeholders an opportunity to provide feedback on PE data collection and rate-setting. The system of data and methods that CMS uses to support PE rate-setting is complex; thus, CMS must take into account a number of competing priorities when considering changes to the system. With this in mind, the authors offer a number of near- and longer-term recommendations.

Practice Expenses Associated with Comprehensive Primary Care Capabilities.

Through the Comprehensive Primary Care (CPC) and Comprehensive Primary Care Plus (CPC+) programs, the Centers for Medicare & Medicaid Services (CMS) has encouraged primary care practices to invest in "comprehensive primary care" capabilities. Empirical evidence suggests these capabilities are under-reimbursed or not reimbursed under prevailing fee-for-service payment models. To help CMS design alternative payment models (APMs) that reimburse the costs of these capabilities, the authors developed a method for estimating related practice expenses. Fifty practices, sampled for diversity across CPC+ participation status, geographic region, rural status, size, and parent-organization affiliation, completed the study. Researchers developed a mixed-methods strategy, beginning with interviews of practice leaders to identify their capabilities and the types of costs incurred. This was followed by researcher-assisted completion of a workbook tailored to each practice, which gathered related labor and nonlabor costs. In a final interview, practice leaders reviewed cost estimates and made any needed corrections before approval. A main goal was to address a persistent question faced by CMS: When practices reported widely divergent costs for a given capability, was that divergence due to practices having different prices for the same capability or from their having substantially different capabilities? The cost estimation method developed in this project collected detailed data on practice capabilities and their costs. However, the small sample did not allow quantitative estimation of the contributions of service level and pricing to the variation in overall costs. This cost estimation method, deployed on a larger scale, could generate robust data to inform new payment models aimed at incentivizing and sustaining comprehensive primary care.

Integrating Department of Defense and Department of Veterans Affairs Purchased Care: Preliminary Feasibility Assessment.

The U.S. Department of Defense (DoD) and U.S. Department of Veterans Affairs (VA) health systems provide services through a mix of direct care, delivered at government facilities, and purchased care, provided through the private sector, mainly by community-based providers who have entered into contracts with third-party administrators (TPAs). In the interest of expanding DoD-VA resource sharing that may lead to greater efficiencies and cost savings, the DoD/VA Joint Executive Committee is exploring options to integrate DoD and VA's purchased care programs. This preliminary feasibility assessment examined how an integrated approach to purchasing care could affect access, quality, and costs for beneficiaries, DoD, and VA and identified general legislative, policy, and contractual challenges to implementing an integrated purchased care program. An integrated approach to purchasing care is feasible under current legal and regulatory authorities, but policy changes may be needed-and the practicality of such an approach depends on the contract and network design. For example, legal/regulatory changes in how contracts are established would be required to achieve any real savings to the government. There are also differences in the populations served by TRICARE (DoD health care) and VA, particularly in terms of age and geographic location. Implementation would be further complicated by contractual differences in the TPA contracts for VA and DoD as they relate to network standards, provider payments, network participation requirements, and reporting requirements and incentive structures. As a result, there are significant uncertainties with respect to increased efficiency or cost savings for the government.

Evaluating the Impact of Policies to Regulate Involuntary Out-of-Network Charges on New Jersey Hospitals.

Policymakers must balance the complex and sometimes conflicting objectives of ensuring access to care, limiting the financial burden on patients, and controlling overall costs. States differ in how they handle involuntary out-of-network charges-i.e., payment for care when a patient does not have the option of selecting a hospital in his or her health plan's network. New Jersey's current regulations emphasize patient protection, in that patients are only responsible for the portion of the cost that they would have incurred for in-network care, and health plans must pay the remainder of the provider's charges. This policy is seen as contentious by health plans, who argue that they have been made responsible for paying whatever charges a hospital submits, and proposals to limit payments for involuntary out-of-network care are being debated in the state legislature. This study seeks to inform the current debate (as of October 2016) by analyzing the role of out-of-network payments in New Jersey hospitals' financial performance and simulating the effect of policies to limit charges for involuntary out-of-network care. The authors' estimates suggest that implementing New Jersey Bill A1952, which proposes a limit of between 90 and 200 percent of Medicare rates for involuntary out-of-network hospital care, would have reduced payments for hospital care by commercial plans by between 6 and 10 percent during 2010 through 2014. Assuming no change in operating expenses and no recoupment of lost out-of-network revenues, the cap would have led to an operating loss at between 48 and 70 percent of hospitals.