CMS Hospital Value-Based Programs: Refinements Are Needed To Reduce Health Disparities And Improve Outcomes.

Several Centers for Medicare and Medicaid Services (CMS) programs aim to transform how health care is delivered by adjusting Medicare inpatient hospital payments through a system of rewards and penalties based on performance on measures of quality. These programs are the Hospital Readmissions Reduction Program, the Hospital Value-Based Purchasing Program, and the Hospital-Acquired Condition Reduction Program. We analyzed value-based program penalty results for various groups of hospitals across these three programs and assessed the impact of patient and community health equity risk factors on hospital penalties. We found statistically significant positive relationships between hospital penalties and several factors that affect hospital performance but that hospitals cannot control-namely, medical complexity (as measured by Hierarchical Condition Categories scores), uncompensated care, and the portion of hospital catchment area populations who live alone. Moreover, these environmental conditions can be worse for hospitals that operate in areas with historically underserved populations. This suggests that the CMS programs might not adequately account for health equity factors at the community level. Refinements to these programs (including an explicit incorporation of patient and community health equity risk factors) and continued monitoring will help ensure that the programs work as intended in a fair and equitable fashion.

Cryopreserved Placental Membrane Allograft Reduces the Likelihood of Developing a New or Recurring Foot Ulcer and All-Cause Mortality in Diabetic Patients When Compared with Other Cellular- and Tissue-Based Products.

Objective: To compare outcomes for Medicare patients with diabetic foot ulcer(s) (DFU) receiving cryopreserved placental membrane containing viable cells (vCPM) to other Cellular- and Tissue-Based Products (CTPs). Approach: Patients with DFU and CTP use were selected in Medicare claims (2013-2017) by using a strict definition of DFU with demonstrated diabetes etiology. We compared the effectiveness of vCPM with other CTPs on: (1) reduction of post-treatment ulcer occurrence, and (2) reduction in 1 year mortality. We controlled for selection bias and differential risk characteristics between comparison groups in a two-stage inverse probability treatment weighting model. Results: Overall, 7,869 DFU episodes with CTP use met inclusion criteria: 786 received vCPM, 4,546 received another "cellular" CTP, and 2,537 received "acellular" CTP. For ulcer occurrence, we examined: 30-, 90-, 180-, and 365 days post-treatment. We found a significant reduction in ulcers at each period for vCPM compared with either alternative CTP-results range from a 36.7% percentage point reduction in ulcer occurrence at 30 days compared with cellular CTP, and a 58.5% percentage point reduction at 365 days compared with acellular CTP. Further, the application of vCPM reduces mortality within 1 year by 2.3 percentage points (13-13.8% change) compared with other CTPs. Innovation: This study examines the differences in ulcer occurrence and mortality for Medicare DFU patients receiving vCPM and other CTPs. Our strict DFU definition excludes beneficiaries without foot ulcer with demonstrated diabetes etiology. Conclusion: Among CTPs, vCPM users have reduced ulcer rates (recurrent or new) and reduced all-cause mortality compared with other "cellular" and "acellular" CTPs.

Six Months of Remote Patient Monitoring Is Associated with Blood Pressure Reduction in Hypertensive Patients: An Uncontrolled Observational Study.

Background: Remote physiological monitoring (RPM) is a form of telehealth that measures vital signs at home and automatically reports the results to providers, thereby possibly improving chronic disease management. Medicare payment for RPM began in 2019. Two potential obstacles to RPM growth are the paucity of published clinical outcomes data and the Medicare requirement that monitoring be done at least 16 days per month to bill for the service. To help address these issues, we report the following uncontrolled observational study. Methods: A total of 1,102 consecutive patients enrolled in RPM were divided into four groups based on initial average mean arterial pressure (MAP) and into six groups based on the number of days per month MAP was measured. We report changes in MAP after 6 months of RPM as a function of initial MAP, and number of days per month MAP was monitored. Results: After 6 months of RPM, average MAP dropped from 97 to 93 (p < 0.01). This drop was greatest in the 50% of patients initially hypertensive. These patients saw average MAP reductions from 106 to 97 (p < 0.001) and became normotensive. Although MAP reduction was greatest the more frequently patients measured, significant reduction occurred in the hypertensive patients whether they measured more or less than 16 days per month (p < 0.001). No minimum threshold of measurements was found that predicted failure of RPM to lower MAP. Conclusions: RPM is associated with clinically and statistically significant reductions in average MAP in patients who were initially hypertensive. This benefit occurred irrespective of the number of days per month patients measured MAP.

Early Initiation of non-invasive ventilation at home improves survival and reduces healthcare costs in COPD patients with chronic hypercapnic respiratory failure: A retrospective cohort study.

BACKGROUND: While non-invasive ventilation at home (NIVH) is gaining wider acceptance as a treatment option for chronic obstructive pulmonary disease with chronic respiratory failure (COPD-CRF), uncertainty remains about the optimal time to begin NIVH, whether a specific phenotype of COPD-CRF predicts improved outcomes, and how NIVH affects healthcare costs. MATERIALS AND METHODS: Using 100% research identifiable fee-for-service Medicare claims from 2016 through 2020, we designed an observational, retrospective, cohort study to determine how NIVH use in COPD-CRF patients stratified by CRF phenotype and by timing of initiation affected mortality, healthcare utilization, and total healthcare costs compared to a matched control group. RESULTS: In hypercapnic COPD-CRF patients starting NIVH within the first week following diagnosis, risk of death was reduced by 43% (HR, 0.57; 95% CI 0.51-0.63, p < .0001), those starting 8-15 days following diagnosis had mortality reduction of 31% (HR, 0.69; 95% CI 0.62-0.77, p < .0001), and those starting 16-30 days following diagnosis showed mortality reduction of 16% (HR 0.84, CI 0.073-0.096, p < .01) compared to controls. Medicare spending was also associated with timing of NIVH initiation in hypercapnic COPD-CRF. Those beginning treatment 0-7 days and 0-15 days following diagnosis had a $5484 and a $3412 reduction in Medicare expenditures respectively the next year. NIVH was not associated with improved clinical outcomes or decreased Medicare spending in COPD-CRF patients who were not hypercapnic. CONCLUSION: In this study, early initiation of NIVH for hypercapnic COPD-CRF patients was associated with reductions in the risk of death and in total Medicare spending.

Impact of liposomal bupivacaine and provider choice on opioid use and service outcomes in Medicare outpatient surgical patients.

AIMS: There is wide variation in opioid prescribing patterns after common surgical procedures. This study examines outcomes for beneficiaries undergoing hospital outpatient department (HOPD) procedures using liposomal bupivacaine (LB) for control of post-surgical pain. As a non-opioid surgical analgesic, LB may afford beneficial outcomes for reducing subsequent opioid use and improving post-surgical service use outcomes. METHODS: This retrospective cohort comparison study analyzed 100% Medicare claims data from 2014-2019. HOPD claims were matched to approximately 100 of the most common surgical procedures where LB was utilized. Within these procedures, a one-to-many, with replacement propensity score matching model was used to control for possible selection bias. By procedure, those claims which were identified as using LB for control of post-surgical pain were matched to those not receiving LB. Outcomes were the probability of a subsequent Part D opioid prescription fill, emergency department (ED) visit, and short-term acute care hospital admission. RESULTS: Higher provider use rates of LB are significantly correlated with a decrease in post-HOPD opioid use and a reduction in post-operative ED visits. For each 10% increase in LB use rate by a given provider, Part D opioid events by Day 30 decreased by 2.6 percentage points and by 2.1 percentage points by day 90 (p < .01). Similarly, for each 10% increase in provider LB use rate, there is a 0.4 percentage point reduction in post-operative ED use by day 30 (p < .01) and a 0.3 percentage point reduction by day 90 (p < .05). LIMITATIONS: Part D data only indicate that a prescription was filled, not whether the drug was taken. CONCLUSIONS: Increased provider use of LB is correlated with improved patient outcomes in real-world provider experience with the Medicare population for many outpatient procedures. Policies that support increased provider use of LB should reduce reliance on opioid drugs for post-surgical pain management.

Economic value of orthotic and prosthetic services among medicare beneficiaries: a claims-based retrospective cohort study, 2011-2014.

BACKGROUND: There are few studies of the economic value of orthotic and prosthetic services. A prior cohort study of orthotic and prosthetic Medicare beneficiaries based on Medicare Parts A and B claims from 2007 to 2010 concluded that patients who received timely orthotic or prosthetic care had comparable or lower total health care costs than a comparison group of untreated patients. This follow-up study reports on a parallel analysis based on Medicare claims from 2011 to 2014 and includes Part D in addition to Parts A and B services and expenditures. Its purpose is to validate earlier findings on the extent to which Medicare patients who received select orthotic and prosthetic services had less health care utilization, lower Medicare payments, and potentially fewer negative outcomes compared to matched patients not receiving these services. METHODS: This is a retrospective cohort analysis of 78,707 matched pairs of Medicare beneficiaries with clinical need for orthotic and prosthetic services (N = 157,414) using 2011-2014 Medicare claims data. It uses propensity score matching techniques to control for observable selection bias. Economically, a cost-consequence evaluation over a four-year time horizon was performed. RESULTS: Patients who received lower extremity orthotics had 18-month episode costs that were $1939 lower than comparable patients who did not receive orthotic treatment ($22,734 vs $24,673). Patients who received spinal orthotic treatment had 18-month episode costs that were $2094 lower than comparable non-treated patients ($23,560 vs $25,655). Study group beneficiaries receiving both types of orthotics had significantly lower Part D spending than those not receiving treatment (p < 0.05). Patients who received lower extremity prostheses had comparable 15-month episode payments to matched beneficiaries not receiving prostheses ($68,877 vs $68,893) despite the relatively high cost of the prosthesis. CONCLUSIONS: These results were consistent with those found in the prior study and suggest that orthotic and prosthetic services provide value to the Medicare program and to the patient.

Comparing the Affordable Care Act's Financial Impact on Safety-Net Hospitals in States That Expanded Medicaid and Those That Did Not.

Issue: Safety-net hospitals play a vital role in delivering health care to Medicaid enrollees, the uninsured, and other vulnerable patients. By reducing the number of uninsured Americans, the Affordable Care Act (ACA) was also expected to lower these hospitals' significant uncompensated care costs and shore up their financial stability. Goal: To examine how the ACA's Medicaid expansion affected the financial status of safety-net hospitals in states that expanded Medicaid and in states that did not. Methods: Using Medicare hospital cost reports for federal fiscal years 2012 and 2015, the authors compared changes in Medicaid inpatient days as a percentage of total inpatient days, Medicaid revenues as a percentage of total net patient revenues, uncompensated care costs as a percentage of total operating costs, and hospital operating margins. Findings and Conclusions: Medicaid expansion had a significant, favorable financial impact on safety-net hospitals. From 2012 to 2015, safety-net hospitals in expansion states, compared to those in nonexpansion states, experienced larger increases in Medicaid inpatient days and Medicaid revenues as well as reduced uncompensated care costs. These changes improved operating margins for safety-net hospitals in expansion states. Margins for safety-net hospitals in nonexpansion states, meanwhile, declined.

For Disproportionate-Share Hospitals, Taxes And Fees Curtail Medicaid Payments.

After accounting for supplemental payments, we found that in 2011, disproportionate-share hospitals, on average, received gross Medicaid payments that totaled 108 percent of their costs for treating Medicaid patients but only 89 percent of their costs for Medicaid and uninsured patients combined. However, these payments were reduced by approximately 4-11 percent after we accounted for provider taxes and local government contributions that are used to help finance Medicaid payments.

Making It Safe to Grow Old: A Financial Simulation Model for Launching MediCaring Communities for Frail Elderly Medicare Beneficiaries.

POLICY POINTS: At age 65, the average man and woman can respectively expect 1.5 years and 2.5 years of requiring daily help with "activities of daily living." Available services fail to match frail elders' needs, thereby routinely generating errors, unreliability, unwanted services, unmet needs, and high costs. The number of elderly Medicare beneficiaries likely to be frail will triple between 2000 and 2050. Low retirement savings, rising medical and long-term care costs, and declining family caregiver availability portend gaps in badly needed services. The financial simulation reported here for 4 diverse MediCaring Communities shows lower per capita costs. Program savings are substantial and can improve coverage and function of local supportive services within current overall Medicare spending levels. CONTEXT: The Altarum Institute Center for Elder Care and Advanced Illness has developed a reform model, MediCaring Communities, to improve services for frail elderly Medicare beneficiaries through longitudinal care planning, better-coordinated and more desirable medical and social services, and local monitoring and management of a community's quality and supply of services. This study uses financial simulation to determine whether communities could implement the model within current Medicare and Medicaid spending levels, an important consideration to enable development and broad implementation. METHODS: The financial simulation for MediCaring Communities uses 4 diverse communities chosen for adequate size, varying health care delivery systems, and ability to implement reforms and generate data rapidly: Akron, Ohio; Milwaukie, Oregon; northeastern Queens, New York; and Williamsburg, Virginia. For each community, leaders contributed baseline population and program effect estimates that reflected projections from reported research to build the model. FINDINGS: The simulation projected third-year savings between $269 and $537 per beneficiary per month and cumulative returns on investment between 75% and 165%. CONCLUSIONS: The MediCaring Communities financial simulation demonstrates that better care at lower cost for frail elderly Medicare beneficiaries is possible within current financing levels. Long-term success of the initiative will require reinvestment of Medicare savings to bolster nonmedical supportive services in the community. Successful implementation will necessitate waiving certain regulations and developing new infrastructure in pilot communities. This financial simulation methodology will help leadership in other communities to project fiscal performance. Since the MediCaring Communities model also achieves the Centers for Medicare and Medicaid Services' vision for care for frail elders (better care, healthier people, smarter spending) and since these reforms can proceed with limited waivers from Medicare, willing communities should explore implementation and share best practices about how to achieve fundamental service delivery changes that can meet the challenges of a much older population in the 21st century.

Economic Value of Prosthetic Services Among Medicare Beneficiaries: A Claims-Based Retrospective Cohort Study.

CONTEXT: There are few studies of the economic impact or value of lower extremity prosthetic services. Results from this study can inform the value proposition concerning prosthetic services within military health, where over 40,000 Veterans with limb-loss receive care for their amputations through the Veterans Administration health care system. PURPOSE: To determine the extent to which Medicare patients who received selected prosthetic services had less health care utilization, lower Medicare payments, and/or fewer negative outcomes compared to matched patients not receiving these services. METHODS: This retrospective cohort analysis using Medicare claims data (2007-2010) and propensity score matching techniques to control for observable selection bias based on etiological diagnosis, comorbidities, patient characteristics, and historical health care utilization one year before the etiological diagnosis. FINDINGS: Patients who received lower extremity prostheses had comparable Medicare episode payments ($6,099 per-member-per-month for study group, $6,015 per-member-per-month for comparison group) and better outcomes than patients who did not receive prostheses. Study group patients were more likely to receive extensive outpatient therapy than comparison group patients (p < 0.05). Receiving physical therapy is associated with fewer hospitalizations and emergency room visits, and less facility-based care (p < 0.05), essentially offsetting the cost of the prosthetic over a 12-month time frame.

With "big data" comes big responsibility: outreach to North Carolina Medicaid patients with 10 or more computed tomography scans in 12 months.

BACKGROUND: Patients are being exposed to increasing levels of ionizing radiation, much of it from computed tomography (CT) scans. METHODS: Adults without a cancer diagnosis who received 10 or more CT scans in 2010 were identified from North Carolina Medicaid claims data and were sent a letter in July 2011 informing them of their radiation exposure; those who had undergone 20 or more CT scans in 2010 were also telephoned. The CT scan exposure of these high-exposure patients during the 12 months following these interventions was compared with that of adult Medicaid patients without cancer who had at least 1 CT scan but were not in the intervention population. RESULTS: The average number of CT scans per month for the high-exposure population decreased over time, but most of that reduction occurred 6-9 months before our interventions took place. At about the same time, the number of CT scans per month also decreased in adult Medicaid patients without cancer who had at least 1 CT scan but were not in the intervention population. LIMITATIONS: Our data do not include information about CT scans that may have been performed during times when patients were not covered by Medicaid. Some of our letters may not have been received or understood. Some high-exposure patients were unintentionally excluded from our study because organization of data on Medicaid claims varies by setting of care. CONCLUSION: Our patient education intervention was not temporally associated with significant decreases in subsequent CT exposure. Effecting behavior change to reduce exposure to ionizing radiation requires more than an educational letter or telephone call.

A retrospective comparison of clinical outcomes and Medicare expenditures in skilled nursing facility residents with chronic wounds.

Medicare skilled nursing facility (SNF) residents with chronic wounds require more resources and have relatively high healthcare expenditures compared to Medicare patients without wounds. A retrospective cohort study was conducted using 2006 Medicare Chronic Condition Warehouse claims data for SNF, inpatient, outpatient hospital, and physician supplier settings along with 2006 Long-Term Care Minimum Data Set (MDS) information to compare Medicare expenditures between two groups of SNF residents with a diagnosis of pressure, venous, ischemic, or diabetic ulcers whose wounds healed during the 10-month study period. The study group (n = 372) was managed using a structured, comprehensive wound management protocol provided by an external wound management team. The matched comparison group consisted of 311 SNF residents who did not receive care from the wound management team. Regression analyses indicate that after controlling for resident comorbidities and wound severity, study group residents experienced lower rates of wound-related hospitalization per day (0.08% versus 0.21%, P < 0.01) and shorter wound episodes (94 days versus 115 days, P < 0.01) than comparison group patients. Total Medicare costs were $21,449.64 for the study group and $40,678.83 for the comparison group (P < 0.01) or $229.07 versus $354.26 (P < 0.01) per resident episode day. Additional studies including wounds that do not heal are warranted. Increasing the number of SNF residents receiving the care described in this study could lead to significant Medicare cost savings. Incorporating wound clinical outcomes into a pay-for-performance measures for SNFs could increase broader SNF adoption of comprehensive wound care programs to treat chronic wounds.

Infrastructure for large-scale quality-improvement projects: early lessons from North Carolina Improving Performance in Practice.

INTRODUCTION: Little is known regarding how to accomplish large-scale health care improvement. Our goal is to improve the quality of chronic disease care in all primary care practices throughout North Carolina. METHODS: Methods for improvement include (1) common quality measures and shared data system; (2) rapid cycle improvement principles; (3) quality-improvement consultants (QICs), or practice facilitators; (4) learning networks; and (5) alignment of incentives. We emphasized a community-based strategy and developing a statewide infrastructure. Results are reported from the first 2 years of the North Carolina Improving Performance in Practice (IPIP) project. RESULTS: A coalition was formed to include professional societies, North Carolina AHEC, Community Care of North Carolina, insurers, and other organizations. Wave One started with 18 practices in 2 of 9 regions of the state. Quality-improvement consultants recruited practices. Over 80 percent of practices attended all quarterly regional meetings. In 9 months, almost all diabetes measures improved, and a bundled asthma measure improved from 33 to 58 percent. Overall, the magnitude of improvement was clinically and statistically significant (P = .001). Quality improvements were maintained on review 1 year later. Wave Two has spread to 103 practices in all 9 regions of the state, with 42 additional practices beginning the enrollment process. DISCUSSION: Large-scale health care quality improvement is feasible, when broadly supported by statewide leadership and community infrastructure. Practice-collected data and lack of a control group are limitations of the study design. Future priorities include maintaining improved sustainability for practices and communities. Our long-term goal is to transform all 2000 primary-care practices in our state.

How a new 'public plan' could affect hospitals' finances and private insurance premiums.

Two key health reform bills in the House of Representatives and Senate include the option of a "public plan" as an additional source of health coverage. At least initially, the plan would primarily be structured to cover many of the uninsured and those who now have individual coverage. Because it is possible, and perhaps even likely, that this new public payer would pay less than private payers for the same services, such a plan could negatively affect hospital margins. Hospitals may attempt to recoup losses by shifting costs to private payers. We outline the financial pressures that hospitals and private payers could experience under various assumptions. High uninsured enrollment in a public plan would bolster hospital margins; however, this effect is reversed if the privately insured enter a public plan in large proportions, potentially stressing the hospital industry and increasing private insurance premiums.

Measuring efficiency: the association of hospital costs and quality of care.

Providers with lower costs may be more efficient and, therefore, provide better care than those with higher costs. However, the relationship between risk-adjusted costs (often described as efficiency) and quality is not well understood. We examined the relationship between hospitals' risk-adjusted costs and their structural characteristics, nursing levels, quality of care, and outcomes. U.S. hospitals with low risk-adjusted costs were more likely to be for-profit, treat more Medicare patients, and employ fewer nurses. They provided modestly worse care for acute myocardial infarction and congestive heart failure but had comparable rates of risk-adjusted mortality. We found no evidence that low-cost providers provide better care.

The cost-shift payment 'hydraulic': foundation, history, and implications.

The cost-shift payment "hydraulic" is an integral component of the fragmented U.S. health care financing system. If private payers' acceptance of the cost-shifting burden were to erode, our system of health care financing could become unstable. This is especially true for the hospital industry. In this paper we provide a series of examples of cost shifting and a historical profile of the cost shift in the hospital industry since 1980, noting that cost-shifting pressures seem to fluctuate over time and across health care markets. Cost shifting need not be dollar per dollar, as hospitals can absorb some degree of cost-shifting pressure through increased efficiency and decreases in service provision.

The rise of the entrepreneurial physican.

The policy issues surrounding physician-owned specialty hospitals are highly controversial. Central to the controversy is the trade-off between the role these hospitals might play in increasing competition and the impact they might have on community hospitals' ability to cross-subsidize unfunded missions. Key policy questions relate to quality, efficiency, and the degree to which specialty hospitals are fairly paid for their services. This commentary reviews Jean Mitchell's basic thesis in relation to both the emerging specialty hospital literature and earlier work performed by the Lewin Group for MedCath, a corporation that owns and manages heart specialty hospitals.

Estimating the mission-related costs of teaching hospitals.

Academic health centers and other teaching hospitals face higher patient care costs than nonteaching community hospitals face, because of their missions of graduate medical education (GME), biomedical research, and the maintenance of standby capacity for medically complex patients. We estimate that total mission-related costs were dollar 27 billion in 2002 for all teaching hospitals, with GME (including indirect and direct GME) and standby capacity accounting for roughly 60 and 35 percent of these costs, respectively. To assure their continued ability to perform important social missions in a competitive environment, it may be necessary to reassess the way in which these activities are financed.

Drivers of expenditure growth in outpatient care services.

OBJECTIVE: To identify and analyze drivers of costs for healthcare services delivered in outpatient settings. STUDY DESIGN: We estimated 2 regression models of state-level annual outpatient expenditures. The first model uses data on operating costs for hospital outpatient services from hospital cost reports. The second model uses outpatient claims data from a large, national, group health insurer, and covers all varieties of outpatient providers for a specific insured population. RESULTS: Several different cost drivers affected the growth of outpatient costs in the late 1990s. Foremost among the drivers is the change associated with demographics and general economic conditions, and economy-wide inflation, which together accounted for 60% of the growth in outpatient costs. Characteristics directly related to the healthcare sector had a smaller, but still significant role in cost growth. The supply of physicians and specialists accounted for 10% of cost growth, whereas supply and structure of outpatient facilities were responsible for an additional 5% of outpatient cost increase. The health status of the population was associated with 8% of expenditure growth; technology and treatment practices accounted for 7% of growth; and provider operating costs, such as wage levels, were linked to 9% of the growth. CONCLUSIONS: Some level of growth in outpatient care spending may be cost effective, because outpatient services can substitute for more expensive care in other settings. Strategies for limiting growth in the costs of outpatient care will be more effective if focused on enhancing cooperation between payers, providers, and other stakeholders in assuring an appropriate and cost-effective supply of outpatient care resources.