Medicare's Bundled Payments For Care Improvement Initiative Maintained Quality Of Care For Vulnerable Patients.

The Bundled Payments for Care Improvement (BPCI) initiative established four models to test whether linking payments for an episode of care could reduce Medicare payments while maintaining or improving quality. Evaluations concluded that model 2, the largest, generally lowered payments without reducing quality for the average beneficiary, but these global results could mask adverse findings among vulnerable subpopulations. We analyzed changes in emergency department visits, unplanned hospital readmissions, and all-cause mortality within ninety days of hospital discharge among beneficiaries with one or more of three vulnerable characteristics-dementia, dual eligibility for Medicare and Medicaid, and recent institutional care-in 105,458 beneficiary episodes in the period October 2013-December 2016. The results for twelve types of medical and surgical BPCI episodes were evaluated relative to results in matched comparison groups. Our findings suggest that BPCI model 2 did not adversely affect care quality for beneficiaries with vulnerabilities. While this conclusion does not discourage the further development of bundled payment models, policy makers should support ongoing research to ensure that vulnerable populations are not adversely affected by these approaches.

Association Between Hospital Participation in a Medicare Bundled Payment Initiative and Payments and Quality Outcomes for Lower Extremity Joint Replacement Episodes.

IMPORTANCE: Bundled Payments for Care Improvement (BPCI) is a voluntary initiative of the Centers for Medicare & Medicaid Services to test the effect of holding an entity accountable for all services provided during an episode of care on episode payments and quality of care. OBJECTIVE: To evaluate whether BPCI was associated with a greater reduction in Medicare payments without loss of quality of care for lower extremity joint (primarily hip and knee) replacement episodes initiated in BPCI-participating hospitals that are accountable for total episode payments (for the hospitalization and Medicare-covered services during the 90 days after discharge). DESIGN, SETTING, AND PARTICIPANTS: A difference-in-differences approach estimated the differential change in outcomes for Medicare fee-for-service beneficiaries who had a lower extremity joint replacement at a BPCI-participating hospital between the baseline (October 2011 through September 2012) and intervention (October 2013 through June 2015) periods and beneficiaries with the same surgical procedure at matched comparison hospitals. EXPOSURE: Lower extremity joint replacement at a BPCI-participating hospital. MAIN OUTCOMES AND MEASURES: Standardized Medicare-allowed payments (Medicare payments), utilization, and quality (unplanned readmissions, emergency department visits, and mortality) during hospitalization and the 90-day postdischarge period. RESULTS: There were 29 441 lower extremity joint replacement episodes in the baseline period and 31 700 in the intervention period (mean [SD] age, 74.1 [8.89] years; 65.2% women) at 176 BPCI-participating hospitals, compared with 29 440 episodes in the baseline period (768 hospitals) and 31 696 episodes in the intervention period (841 hospitals) (mean [SD] age, 74.1 [8.92] years; 64.9% women) at matched comparison hospitals. The BPCI mean Medicare episode payments were $30 551 (95% CI, $30 201 to $30 901) in the baseline period and declined by $3286 to $27 265 (95% CI, $26 838 to $27 692) in the intervention period. The comparison mean Medicare episode payments were $30 057 (95% CI, $29 765 to $30 350) in the baseline period and declined by $2119 to $27 938 (95% CI, $27 639 to $28 237). The mean Medicare episode payments declined by an estimated $1166 more (95% CI, -$1634 to -$699; P < .001) for BPCI episodes than for comparison episodes, primarily due to reduced use of institutional postacute care. There were no statistical differences in the claims-based quality measures, which included 30-day unplanned readmissions (-0.1%; 95% CI, -0.6% to 0.4%), 90-day unplanned readmissions (-0.4%; 95% CI, -1.1% to 0.3%), 30-day emergency department visits (-0.1%; 95% CI, -0.7% to 0.5%), 90-day emergency department visits (0.2%; 95% CI, -0.6% to 1.0%), 30-day postdischarge mortality (-0.1%; 95% CI, -0.3% to 0.2%), and 90-day postdischarge mortality (-0.0%; 95% CI, -0.3% to 0.3%). CONCLUSIONS AND RELEVANCE: In the first 21 months of the BPCI initiative, Medicare payments declined more for lower extremity joint replacement episodes provided in BPCI-participating hospitals than for those provided in comparison hospitals, without a significant change in quality outcomes. Further studies are needed to assess longer-term follow-up as well as patterns for other types of clinical care.

Medicare's bundling pilot: including post-acute care services.

Fee-for-service Medicare, in which a separate payment is made for each service, rewards health care providers for delivering more services, but not necessarily coordinating those services over time or across settings. To help address these concerns, the Patient Protection and Affordable Care Act of 2010 requires Medicare to experiment with making a bundled payment for a hospitalization plus post-acute care, that is, the recuperative or rehabilitative care following a hospital discharge. This bundled payment approach is intended to promote more efficient care across the acute/post-acute episode because the entity that receives the payment has financial incentives to keep episode costs below the payment. Although the entity is expected to control costs through improved care coordination and efficiency, it could stint on care or avoid expensive patients instead. This issue brief focuses on the unique challenges posed by the inclusion of post-acute care services in a payment bundle and special considerations in implementing and evaluating the episode payment approach.

Medicare physician fees: the data behind the numbers.

Medicare's physician fee schedule distributes nearly $60 billion annually and is a critical determinant of individual physicians' incomes, beneficiaries' access to health care services, and Medicare spending, as well as the basis for physician fees used by many private payers. The Centers for Medicare & Medicaid Services (CMS) relies on data derived from expert judgment and other sources to update the fee schedule. Although CMS's methods and data for maintaining the fee schedule have improved over the years, concerns remain about medical specialty society involvement and the lack of an effective "counterweight" to vested interests in establishing and updating the relative values in the fee schedule. This issue brief reviews the data used in the fee schedule, including the new, multispecialty practice expense survey, and the role of the American Medical Association/Specialty Society Relative Value Scale Update Committee.

Primary care physician supply, physician compensation, and Medicare fees: what is the connection?

Primary care, a cornerstone of several health reform efforts, is believed by many to be in a crisis because of inadequate supply to meet future demand. This belief has focused attention on the adequacy of primary care physician supply and ways to boost access to primary care. One suggested approach is to raise Medicare fees for primary care services. Whether higher Medicare fees would increase physician interest in primary care specialties by reducing compensation disparities between primary care and other specialties has not been established. Further, many questions remain about the assumptions underlying these policy concerns. Is there really a primary care physician crisis? Why does compensation across physician specialties vary so widely? Can Medicare physician fee changes affect access to primary care? These questions defy simple answers. This issue brief lays out the latest information on physician workforce, compensation differences across physician specialties, and Medicare's physician fee-setting process.

Physician profiling: can Medicare paint an accurate picture?

Physician profiling, that is, the comparison of the health care services used by a physician's patients to average service use or another benchmark, has been proposed as a way to improve Medicare. It has been used by private health plans and physician groups to identify both efficient practice patterns and the physicians who practice efficiently. The Medicare Payment Advisory Commission (MedPAC) and the Government Accountability Office (GAO) have recommended that Medicare adopt physician profiling to slow spending growth and improve efficiency. Recent legislation would mandate that Medicare employ profiling. This issue brief reviews MedPAC and GAO's analyses of profiling, concerns about using this type of information, and the obstacles in incorporating profiling in the Medicare program.

Updating Medicare's physician fees: the sustainable growth rate methodology.

Medicare's method to annually update the fees it pays physicians has been under fire for some time--specifically, since the method determined that physician fees should be reduced rather than increased. The update method, called the sustainable growth rate (SGR), was implemented to control the growth in Medicare physician spending. Yet Congress, in response to physician concerns about beneficiary access to care, has acted to avert physician fee cuts since 2003. Although this signals dissatisfaction with the SGR methodology, there is yet to be a widely accepted physician fee update proposal that balances federal budgetary realities with the need to ensure beneficiary access. And the cost of changing the update method continues to mount, adding to the difficulties of developing a solution that meets the needs of all stakeholders. This issue brief describes the SGR methodology, the reasons why projected physician fee updates are negative, and some options that have been proposed to remedy the current situation. This issue brief is the second of two related papers on physician spending and Medicare's sustainable growth rate methodology. The companion paper was published on October 9, 2006 (see Issue Brief 815, available at www.nhpf.org/pdfs_ib/IB815_PhysicianSpending_10-09-06.pdf).

Medicare physician payments and spending.

The Medicare program's physician payment method is intended to control spending while ensuring beneficiary access to physician services, but there are signs that it may not be working. The physician's role in the health care delivery system as the primary source of information and treatment options, together with growing demand for services and the imperfect state of knowledge about appropriate service use, challenge Medicare's ability to achieve these two goals. This issue brief describes the history of physician spending and the contribution of escalating service use and intensity of services to the rise in Medicare outlays, setting the stage for further discussion about the use of the Medicare payment system to control spending and ensure access.

Specialty hospitals: can general hospitals compete?

The rapid increase in specialty cardiac, surgical, and orthopedic hospitals has captured the attention of general hospitals and policymakers. Although the number of specialty hospitals remains small in absolute terms, their entry into certain health care markets has fueled arguments about the rules of "fair" competition among health care providers. To allow the smoke to clear, Congress effectively stalled the growth in new specialty hospitals by temporarily prohibiting physicians from referring Medicare or Medicaid patients to specialty hospitals in which they had an ownership interest. During this 18-month moratorium, which expired June 8, 2005, two mandated studies of specialty hospitals provided information to help assess their potential effect on health care delivery. This issue brief discusses the research on specialty hospitals, including their payments under Medicare's hospital inpatient payment system, the quality and cost of care they deliver, their effect on general hospitals and on overall health care delivery, and the regulatory and legal environment in which they have proliferated. It concludes with open issues concerning physician self-referral and the role of general hospitals in providing a range of health care services.