The Financial Effect of Value-Based Purchasing and the Hospital Readmissions Reduction Program on Safety-Net Hospitals in 2014: A Cohort Study.

BACKGROUND: Medicare's value-based purchasing (VBP) and the Hospital Readmissions Reduction Program (HRRP) could disproportionately affect safety-net hospitals. OBJECTIVE: To determine whether safety-net hospitals incur larger financial penalties than other hospitals under VBP and HRRP. DESIGN: Cross-sectional analysis. SETTING: United States in 2014. PARTICIPANTS: 3022 acute care hospitals participating in VBP and the HRRP. MEASUREMENTS: Safety-net hospitals were defined as being in the top quartile of the Medicare disproportionate share hospital (DSH) patient percentage and Medicare uncompensated care (UCC) payments per bed. The differences in penalties in both total dollars and dollars per bed between safety-net hospitals and other hospitals were estimated with the use of bivariate and graphical regression methods. RESULTS: Safety-net hospitals in the top quartile of each measure were more likely to be penalized under VBP than other hospitals (62.9% vs. 51.0% under the DSH definition and 60.3% vs. 51.5% under the UCC per-bed definition). This was also the case under the HRRP (80.8% vs. 69.0% and 81.9% vs. 68.7%, respectively). Safety-net hospitals also had larger payment penalties ($115 900 vs. $66 600 and $150 100 vs. $54 900, respectively). On a per-bed basis, this translated to $436 versus $332 and $491 versus $314, respectively. Sensitivity analysis setting the cutoff at the top decile rather than the top quartile decile led to similar conclusions with somewhat larger differences between safety-net and other hospitals. The quadratic fit of the data indicated that the larger effect of these penalties is in the middle of the distribution of the DSH and UCC measures. LIMITATION: Only 2 measures of safety-net status were included in the analyses. CONCLUSION: Safety-net hospitals were disproportionately likely to be affected under VBP and the HRRP, but most incurred relatively small payment penalties in 2014. PRIMARY FUNDING SOURCE: Patient-Centered Outcomes Research Institute.

Safety-net hospitals more likely than other hospitals to fare poorly under Medicare's value-based purchasing.

Medicare's value-based purchasing (VBP) program potentially puts safety-net hospitals at a financial disadvantage compared to other hospitals. In 2014, the second year of the program, patient mortality measures were added to the VBP program's algorithm for assigning penalties and rewards. We examined whether the inclusion of mortality measures in the second year of the program had a disproportionate impact on safety-net hospitals nationally. We found that safety-net hospitals were more likely than other hospitals to be penalized under the VBP program as a result of their poorer performance on process and patient experience scores. In 2014, 63 percent of safety-net hospitals versus 51 percent of all other sample hospitals received payment rate reductions under the program. However, safety-net hospitals' performance on mortality measures was comparable to that of other hospitals, with an average VBP survival score of thirty-two versus thirty-one among other hospitals. Although safety-net hospitals are still more likely than other hospitals to fare poorly under the VBP program, increasing the weight given to mortality in the VBP payment algorithm would reduce this disadvantage.

California safety-net hospitals likely to be penalized by ACA value, readmission, and meaningful-use programs.

The Affordable Care Act includes provisions to increase the value obtained from health care spending. A growing concern among health policy experts is that new Medicare policies designed to improve the quality and efficiency of hospital care, such as value-based purchasing (VBP), the Hospital Readmissions Reduction Program (HRRP), and electronic health record (EHR) meaningful-use criteria, will disproportionately affect safety-net hospitals, which are already facing reduced disproportionate-share hospital (DSH) payments under both Medicare and Medicaid. We examined hospitals in California to determine whether safety-net institutions were more likely than others to incur penalties under these programs. To assess quality, we also examined whether mortality outcomes were different at these hospitals. Our study found that compared to non-safety-net hospitals, safety-net institutions had lower thirty-day risk-adjusted mortality rates in the period 2009-11 for acute myocardial infarction, heart failure, and pneumonia and marginally lower adjusted Medicare costs. Nonetheless, safety-net hospitals were more likely than others to be penalized under the VBP program and the HRRP and more likely not to meet EHR meaningful-use criteria. The combined effects of Medicare value-based payment policies on the financial viability of safety-net hospitals need to be considered along with DSH payment cuts as national policy makers further incorporate performance measures into the overall payment system.

Telehealth and Medicare: payment policy, current use, and prospects for growth.

OBJECTIVE: Evaluate the growth in various types of Medicare-paid telehealth services. BACKGROUND: There has been a long-standing hope that telehealth could be used to reduce rural patients' travel times to specialty physicians. Medicare covers telehealth services provided through live, interactive videoconferencing between a beneficiary located at a certified rural site and a distant practitioner. METHODS: We analyzed 100% of telehealth Medicare claims for 2009 matched to individual patient ZIP codes and individual provider characteristics. RESULTS: Despite increases in Medicare payment rates for telehealth services, expansions of covered services, reductions in provider requirements, and provisions of federal grants to encourage telehealth, growth in adoption of telehealth among providers has been modest. Medicare claims indicate that only 369 providers had 10 or more Medicare telehealth consultations in 2009. Roughly half of the 369 were mental health professionals, and about one-in-five of the 369 were non-physician professionals (e.g., physician assistants and nurse practitioners). On balance, the strong areas of telehealth are mental health and, surprisingly, nonphysician professionals. The comparative advantage of mental health could be the verbal (rather than physical contact) nature of mental health care, and the comparative advantage of non-physician professionals could be their lower labor costs.