Hospital Responses to Incentives in Episode-Based Payment for Joint Surgery: A Controlled Population-Based Study.

Importance: Medicare's Comprehensive Care for Joint Replacement (CJR) model, initiated in 2016, is a national episode-based payment model for lower-extremity joint replacement (LEJR). Metropolitan statistical areas (MSAs) were randomly assigned to participation. In the third year of the program, Medicare made hospital participation voluntary in half of the MSAs and enabled LEJRs for knees to be performed in the outpatient setting without being subject to episode-based payment. How these changes affected program savings is unclear. Objective: To estimate savings from the CJR program over time and assess how responses by hospitals to changing incentives were associated with those savings. Design, Participants, and Setting: This controlled population-based study used Medicare claims data from January 1, 2014, to December 31, 2019, to analyze the spending for beneficiaries who received LEJR in 171 MSAs randomized to CJR vs typical payment. One-quarter of beneficiaries before and after the April 1, 2016, start date were excluded as a 6-month washout period (January 1 to June 30, 2016) to allow time in the evaluation period for hospitals to respond to the program rules. Main Outcomes and Measures: The main outcomes were episode spending and, starting in year 3 of the program, the hospitals' decision to no longer participate in CJR and perform LEJRs in the outpatient setting. Results: Data from 1 087 177 patients (mean [SD] age, 74.4 [8.4] years; 692 604 women [63.7%]; 980 635 non-Hispanic White patients [90.2%]) were analyzed. Over the first 4 years of CJR, 321 038 LEJR episodes were performed at 702 CJR hospitals, and 456 792 episodes were performed at 826 control hospitals. From the second to the fourth year of the program, savings in CJR vs control MSAs diminished from -$976 per LEJR episode (95% CI, -$1340 to -$612) to -$331 (95% CI, -$792 to $130). In MSAs where hospital participation was made voluntary in the third year, more hospitals in the highest quartile of baseline spending dropped out compared with the lowest quartile (56 of 60 [93.3%] vs 29 of 56 [51.8%]). In MSAs where participation remained mandatory, CJR hospitals shifted fewer knee replacements to the outpatient setting in years 3 to 4 than controls (12 571 of 59 182 [21.2%] vs 21 650 of 68 722 [31.5%] of knee LEJRs). In these mandatory MSAs, 75% of the reduction in savings per episode from years 1 to 2 to years 3 to 4 of the program ($455; 95% CI, $137-$722) was attributable to CJR hospitals' decision on which patients would undergo surgery or whether the surgical procedure would occur in the outpatient setting. Conclusions and Relevance: This controlled population-based study found that savings observed in the second year of CJR largely dissipated by the fourth year owing to a combination of responses among hospitals to changes in the program. These results suggest a need for caution regarding the design of new alternative payment models.

Integrated Medicare and Medicaid managed care and rehospitalization of dual eligibles.

OBJECTIVES: Healthcare expenditures for dually eligible individuals covered by both Medicare and Medicaid constitute a disproportionate share of spending for the 2 programs. Fragmentation, inefficiency, and low-quality care have been long standing issues for this population. The objective of this study was to conduct an early evaluation of an innovative program that coordinates benefits for elderly dual eligibles. STUDY DESIGN: Longitudinal cohort study. METHODS: Comparable sources of administrative claims from 2007 to 2009 were used to examine differences in 30-day rehospitalization between dual eligibles in Massachusetts participating in Senior Care Options (SCO), an integrated managed care program, and dual eligibles in Medicare fee-for-service. Multivariable logistic regression models with county and time fixed effects were used for estimation. RESULTS: We found no statistically significant effect of SCO on rehospitalization, an area where coordinated care would be expected to make a substantial difference. CONCLUSIONS: Our results suggest that coordinating the financing and delivery of services through an integrated managed program may not sufficiently address the problems of inefficiency and fragmentation in care for hospitalized dual eligible enrollees.

Creating a network of high-quality skilled nursing facilities: preliminary data on the postacute care quality improvement experiences of an accountable care organization.

Postacute care (PAC) is an important source of cost growth and variation in the Medicare program and is critical to accountable care organization (ACO) and bundled payment efforts to improve quality and value in the Medicare program, but ACOs must often look outside their walls to identify high-value external PAC partners, including skilled nursing facilities (SNFs). As a solution to this problem, the integrated health system, Partners HealthCare System (PHS) and its Pioneer ACO launched the PHS SNF Collaborative Network in October 2013 to identify and partner with high-quality SNFs. This study details the method by which PHS selected SNFs using minimum criteria based on public scores and secondary criteria based on self-reported measures, describes the characteristics of selected and nonselected SNFs, and reports SNF satisfaction with the collaborative. The selected SNFs (n = 47) had significantly higher CMS Five-Star scores than the nonselected SNFs (n = 93) (4.6 vs 3.2, P < .001) and were more likely than nonselected SNFs that met the minimum criteria (n = 35) to have more than 5 days of clinical coverage (17.0% vs 2.9%, P = .02) and to have a physician see admitted individuals within 24 (38.3% vs 17.1%, P = .02) and 48 hours (93.6% vs 80.0%, P = .03). A survey sent to collaborative SNFs found high satisfaction with the process (average satisfaction, 4.6/5, with 1 = very dissatisfied and 5 = very satisfied, n = 19). Although the challenges of improving care in SNFs remain daunting, this approach can serve as a first step toward greater clinical collaboration between acute and postacute settings that will lead to better outcomes for frail older adults.

Unintended consequences of steps to cut readmissions and reform payment may threaten care of vulnerable older adults.

The US health care system is characterized by fragmentation and misaligned incentives, which creates challenges for both providers and recipients. These challenges are magnified for older adults who receive long-term services and supports. The Affordable Care Act attempts to address some of these challenges. We analyzed three provisions of the act: the Hospital Readmissions Reduction Program; the National Pilot Program on Payment Bundling; and the Community-Based Care Transitions Program. These three provisions were designed to enhance care transitions for the broader population of adults coping with chronic illness. We found that these provisions inadequately address the unique needs of vulnerable subgroup members who require long-term services and supports and, in some instances, could produce unintended consequences that would contribute to avoidable poor outcomes. We recommend that policy makers anticipate such unintended consequences and advance payment policies that integrate care. They should also prepare the delivery system to keep up with new requirements under the Affordable Care Act, by supporting providers in implementing evidence-based transitional care practices, recrafting strategic and operational plans, developing educational and other resources for frail older adults and their family caregivers, and integrating measurement and reporting requirements into performance systems.