Evaluation of the Reliability of Medicare Spending Per Beneficiary for Post-Acute Care.

BACKGROUND: A measure of episode spending, such as Medicare Spending Per Beneficiary (MSPB) is increasingly used to evaluate provider performance. Yet if the measure is unreliable, as is often true for low-volume providers, it cannot distinguish "good" from "poor" performance. OBJECTIVE: The objective of this study was to evaluate the reliability of a uniformly calculated MSPB measure for post-acute care (PAC) and the tradeoffs involved in setting a minimum case count threshold. DATA: Medicare claims for 15 million PAC episodes from April 2013 to March 2015. RESEARCH DESIGN: Given the overlap in patients treated in PAC settings, we developed a uniformly calculated MSPB measure for PAC providers that measures spending during the PAC stay and the following 30 days. We examine variation in the MSPB-PAC measure and characterize the measure's reliability and its relationship to provider case counts. RESULTS: Applied to our MSPB-PAC measure, a minimum threshold of 20 Medicare episodes as currently used by the Centers for Medicare & Medicaid Services (CMS) would not establish reasonably reliable measures and could result in drawing unduly erroneous conclusions about provider performance. The measures for home health agencies were considerably less stable and reliable than for institutional PAC providers. CONCLUSIONS: CMS should consider adopting a more stringent reliability standard for setting minimum case counts for MSPB-PAC and other measures. Its current threshold (R-statistic=0.4) reflects more random variation than differences in actual provider performance. To include as many providers as possible, CMS should consider pooling data over multiple years to avoid drawing incorrect conclusions about low-volume providers.

Professional, friend or family?: How home care companies sell emotional care.

While there is a growing literature on home care workers, less is known about how home care companies market their services. Through a content analysis of the 19 largest U.S. home care and home health providers' websites, we examined how companies describe services, desired outcomes of care, and job responsibilities and qualifications. Companies actively market family-like relationships as central to "good care". However, companies' emphasis on unmeasurable skills such as compassion and warmth may also create exploitative work environments. Supporting "good care" requires improved data collection, industry oversight, and policy change to recognize socio-emotional care and protect a marginalized workforce.

Certificate of need and the cost of competition in home healthcare markets.

We used 2010-16 Medicare Cost Reports for 10,737 freestanding home health agencies (HHAs) to examine the impact of home health (HH) and nursing home (NH) certificate-of-need (CON) laws on HHA caseload, total and per-patient variable costs. After adjusting for other HHA characteristics, total costs were higher in states with only HH CON laws ($2,975,698), only NH CON laws ($1,768,097), and both types of laws ($3,511,277), compared with no CON laws ($1,538,536). Higher costs were driven by caseloads, as CON reduced per-patient costs. Additional research is needed to distinguish whether this is due to skimping on quality vs. economies of scale.

Hospital ownership of postacute care providers and the cost of care.

BACKGROUND: Hospitals are facing incentives to manage the total cost of care for episodes of illness, including the costs of inpatient care as well as the cost of care provided by physicians and postacute care (PAC) providers. PAC is an especially important component of the overall cost of care. One strategy hospitals employ in managing this cost is to own PAC providers. Prior work on the relationship between PAC ownership and cost has reached mixed conclusions. PURPOSE: The aim of this study was to examine the associations between the episodic costs of care and hospital ownership of PAC providers, including skilled nursing facilities (SNFs), home health agencies (HHAs), and inpatient rehabilitation facilities (IRF). METHODOLOGY: We examine panel data on hospital ownership of PAC providers from the American Hospital Association for 2013-2015 and cost of care data from Centers for Medicare & Medicaid Services' Value-Based Purchasing Program. Using ordinary least squares, we quantify the association between a hospital's PAC ownership choice (both ownership of any PAC provider and ownership of particular types of providers) and the episodic cost of care. RESULTS: In 2015, 80% of hospitals owned some type of PAC provider. We find that ownership of SNFs and HHAs is associated with a lower episodic cost of care, whereas ownership of inpatient rehabilitation facilities is associated with higher episodic costs of care. The effects of ownership do not differ for hospitals that participate in a voluntary shared saving program (Bundled Payment for Care Improvement). CONCLUSION: The effects of PAC ownership vary by the type of PAC provider owned. Our results suggest that ownership of SNFs and HHAs may be a viable strategy for success in reimbursement programs that reward hospitals for managing the total costs for episodes of care.

Patient Outcomes After Hospital Discharge to Home With Home Health Care vs to a Skilled Nursing Facility.

Importance: Use of postacute care is common and costly in the United States, but there is significant uncertainty about whether the choice of postacute care setting matters. Understanding these tradeoffs is particularly important as new alternative payment models push patients toward lower-cost settings for care. Objective: To investigate the association of patient outcomes and Medicare costs of discharge to home with home health care vs discharge to a skilled nursing facility. Design, Setting, and Participants: A retrospective cohort study used Medicare claims data from short-term acute-care hospitals in the United States and skilled nursing facility and home health assessment data from January 1, 2010, to December 31, 2016, on Medicare beneficiaries who were discharged from the hospital to home with home health care or to a skilled nursing facility. To address the endogeneity of treatment choice, an instrumental variables approach used the differential distance between the beneficiary's home zip code and the closest home health agency and the closest skilled nursing facility as an instrument. Exposures: Receipt of postacute care at home vs in a skilled nursing facility. Main Outcomes and Measures: Readmission within 30 days of hospital discharge, death within 30 days of hospital discharge, improvement in functional status during the postacute care episode, and Medicare payment for postacute care and total payment for the 60-day episode. Results: A total of 17 235 854 hospitalizations (62.2% women and 37.8% men; mean [SD] age, 80.5 [7.9] years) were discharged either to home with home health care (38.8%) or to a skilled nursing facility (61.2%) during the study period. Discharge to home was associated with a 5.6-percentage point higher rate of readmission at 30 days compared with discharge to a skilled nursing facility (95% CI, 0.8-10.3; P = .02). There were no significant differences in 30-day mortality rates (-2.0 percentage points; 95% CI, 0.8-10.3; P = .12) or improved functional status (-1.9 percentage points; 95% CI, -12.0 to 8.2; P = .71). Medicare payment for postacute care was significantly lower for those discharged to home compared with those discharged to a skilled nursing facility (-$5384; 95% CI, -$6932 to -$3837; P < .001), as was total Medicare payment within the first 60 days after admission (-$4514; 95% CI, -$6932 to -$3837; P < .001). Conclusions and Relevance: Among Medicare beneficiaries eligible for postacute care at home or in a skilled nursing facility, discharge to home with home health care was associated with higher rates of readmission, no detectable differences in mortality or functional outcomes, and lower Medicare payments.

The effect of integration of hospitals and post-acute care providers on Medicare payment and patient outcomes.

In this paper we examine empirically the effect of integration on Medicare payment and rehospitalization. We use 2005-2013 data on Medicare beneficiaries receiving post-acute care (PAC) in the U.S. to examine integration between hospitals and the two most common post-acute care settings: skilled nursing facilities (SNFs) and home health agencies (HHA), using two measures of integration-formal vertical integration and informal integration representing preferential relationships between providers without formal relationships. Our identification strategy is twofold. First, we use longitudinal models with a fixed effect for each hospital-PAC pair in a market to test how changes in integration impact patient outcomes. Second, we use an instrumental variable approach to account for patient selection into integrated providers. We find that vertical integration between hospitals and SNFs increases Medicare payments and reduces rehospitalization rates. However, vertical integration between hospitals and HHAs has little effect, nor does informal integration between hospitals and either PAC setting.

The Cost of Caring: Economic Vulnerability, Serious Emotional Distress, and Poor Health Behaviors Among Paid and Unpaid Family and Friend Caregivers.

This study examined differences between paid and unpaid family/friend caregivers to better understand the consumer-driven caregiving workforce. We compared economic vulnerability, unhealthy behavior, and serious emotional distress for 475 paid and 10,500 unpaid family/friend informal caregivers from the 2009 California Health Interview Survey. We then estimated whether caregiver status moderated the relationship between economic vulnerability and health outcomes. Compared to unpaid family/friend caregivers, paid family/friend caregivers had a 27% greater risk ( p = .002) of economic vulnerability. Among all family/friend caregivers, the probabilities of serious emotional distress and unhealthy behaviors increased by >100% and 28% for those with the greatest compared to the least economic vulnerability, and caregiver type did not moderate these relationships. To address economic and health vulnerabilities of paid informal caregivers, policy makers might increase wages in consumer-driven programs. These changes could prove beneficial to both paid informal caregivers and their care recipients, while reducing long-term inefficiencies in consumer-driven programs.

Home Health Chains and Practice Patterns: Evidence of 2008 Medicare Reimbursement Revision.

Home health agencies (HHAs) are known to exploit the Medicare reimbursement schedule by targeting a specific number of therapy visits. These targeting behaviors cause unnecessary medical spending. The Centers for Medicare & Medicaid Services estimates that during fiscal year 2015, Medicare made more than $10 billion in improper payments to HHAs. Better understanding of heterogeneous gaming behaviors among HHAs can inform policy makers to more effectively oversee the home health care industry. This article aims to study how home health chains adjust and adopt new targeting behaviors as compared to independent agencies under the new reimbursement schedule. The analytic data are constructed from: (1) 5% randomly sampled Medicare home health claim data, and (2) HHA chain information extracted from the Medicare Cost Report. The study period spans from 2007 to 2010, and the sample includes 7800 unique HHAs and 380,118 treatment episodes. A multivariate regression model is used to determine whether chain and independent agencies change their practice patterns and adopt different targeting strategies after the revision of the reimbursement schedule in 2008. This study finds that independent agencies are more likely to target 6 and 14 visits, while chain agencies are more likely to target 20 visits. Such a change of practice patterns is more significant among for-profit HHAs. The authors expect these findings to inform policy makers that organizational structures, especially the combination of for-profit status and chain affiliation, should be taken into the consideration when detecting medical fraud and designing the reimbursement schedule.

Provision of hearing aids to children in Bangladesh: costs and cost-effectiveness of a community-based and a centre-based approach.

PURPOSE: The aim of this study is to provide evidence on the costs and health effects of two alternative hearing aid delivery models, a community-based and a centre-based approach. The study is set in Bangladesh and the study population is children between 12 and 18 years old. METHODS: Data on resource use by participants and their caregivers were collected by a household survey. Follow-up data were collected after two months. Data on the costs to providers of the two approaches were collected by means of key informant interviews. RESULTS: The total cost per participant in the community-based model was BDT 6,333 (USD 79) compared with BDT 13,718 (USD 172) for the centre-based model. Both delivery models are found to be cost-effective with an estimated cost per DALY averted of BDT 17,611 (USD 220) for the community-based model and BDT 36,775 (USD 460) for the centre-based model. CONCLUSIONS: Using a community-based approach to deliver hearing aids to children in a resource constrained environment is a cost-effective alternative to the traditional centre-based approach. Further evidence is needed to draw conclusions for scale-up of approaches; rigorous analysis is possible using well-prepared data collection tools and working closely with sector professionals. Implications for Rehabilitation Delivery models vary by resources needed for their implementation. Community-based deliver models of hearing aids to children in low-income countries are a cost-effective alternative. The assessment of costs and effects of hearing aids delivery models in low-income countries is possible through planned collaboration between researchers and sector professionals.

Disparities in home health service providers among Medicare beneficiaries with stroke.

This study examined the intensity of home health services, as defined by the number of visits and service delivery by rehabilitation specialists, among Medicare beneficiaries with stroke. A cross-sectional secondary data analysis was conducted using 2009 home health claims data obtained from the Centers for Medicare and Medicaid Services' Research Data Assistance Center. There were no significant rural-urban differences in the number of home health visits. Rural beneficiaries were significantly less likely than urban beneficiaries to receive services from rehabilitation specialists. Current home health payment reform recommendations may have unintended consequences for rural home health beneficiaries who need therapy services.

For-profit medicare home health agencies' costs appear higher and quality appears lower compared to nonprofit agencies.

For-profit, or proprietary, home health agencies were banned from Medicare until 1980 but now account for a majority of the agencies that provide such services. Medicare home health costs have grown rapidly since the implementation of a risk-based prospective payment system in 2000. We analyzed recent national cost and case-mix-adjusted quality outcomes to assess the performance of for-profit and nonprofit home health agencies. For-profit agencies scored slightly but significantly worse on overall quality indicators compared to nonprofits (77.18 percent and 78.71 percent, respectively). Notably, for-profit agencies scored lower than nonprofits on the clinically important outcome "avoidance of hospitalization" (71.64 percent versus 73.53 percent). Scores on quality measures were lowest in the South, where for-profits predominate. Compared to nonprofits, proprietary agencies also had higher costs per patient ($4,827 versus $4,075), were more profitable, and had higher administrative costs. Our findings raise concerns about whether for-profit agencies should continue to be eligible for Medicare payments and about the efficiency of Medicare's market-oriented, risk-based home care payment system.

The policy implications of the cost structure of home health agencies.

PURPOSE: To examine the cost structure of home health agencies by estimating an empirical cost function for those that are Medicare-certified, ten years following the implementation of prospective payment. DESIGN AND METHODS: 2010 national Medicare cost report data for certified home health agencies were merged with case-mix information from the Outcome and Assessment Information Set (OASIS). We estimated a fully interacted (by tax status) hybrid cost function for 7,064 agencies and calculated marginal costs as percent of total costs for all variables. RESULTS: The home health industry is dominated by for-profit agencies, which tend to be newer than the non-profit agencies and to have higher average costs per patient but lower costs per visit. For-profit agencies tend to have smaller scale operations and different cost structures, and are less likely to be affiliated with chains. Our estimates suggest diseconomies of scale, zero marginal cost for contracting with therapy workers, and a positive marginal cost for contracting with nurses, when controlling for quality. IMPLICATIONS: Our findings suggest that efficiencies may be achieved by promoting non-profit, smaller agencies, with fewer contract nursing staff. This conclusion should be tested further in future studies that address some of the limitations of our study.

Medicare home health payment reform may jeopardize access for clinically complex and socially vulnerable patients.

The Affordable Care Act directed Medicare to update its home health prospective payment system to reflect more recent data on costs and use of services-an exercise known as rebasing. As a result, the Centers for Medicare and Medicaid Services will reduce home health payments 3.5 percent per year in the period 2014-17. To determine the impact that these reductions could have on beneficiaries using home health care, we examined the Medicare reimbursement margins and the use of services in a national sample of 96,621 episodes of care provided by twenty-six not-for-profit home health agencies in 2011. We found that patients with clinically complex conditions and social vulnerability factors, such as living alone, had substantially higher service delivery costs than other home health patients. Thus, the socially vulnerable patients with complex conditions represent less profit-lower-to-negative Medicare margins-for home health agencies. This financial disincentive could reduce such patients' access to care as Medicare payments decline. Policy makers should consider the unique characteristics of these patients and ensure their continued access to Medicare's home health services when planning rebasing and future adjustments to the prospective payment system.