Evaluation of claims data from a commercial value-based insurance product shows pediatric imaging is not a major driver of overall or pediatric healthcare expenditures.

BACKGROUND: Initiatives to reduce healthcare expenditures often focus on imaging, suggesting that imaging is a major driver of cost. OBJECTIVE: To evaluate medical expenditures and determine if imaging was a major driver in pediatric as compared to adult populations. METHODS: We reviewed all claims data for members in a value-based contract between a commercial insurer and a healthcare system for calendar years 2021 and 2022. For both pediatric (<18 years of age) and adult populations, we analyzed average per member per year (PMPY) medical expenditures related to imaging as well as other categories of large medical expenses. Average PMPY expenditures were compared between adult and pediatric patients. RESULTS: Children made up approximately 20% of members and 21% of member months but only 8-9% of expenditures. Imaging expenditures in pediatric members were 0.2% of the total healthcare spend and 2.9% of total pediatric expenditures. Imaging expenditures per member were seven times greater in adults than children. The rank order of imaging expenditures and imaging modalities was also different in pediatric as compared to adult members. CONCLUSION: Evaluation of claims data from a commercial value-based insurance product shows that pediatric imaging is not a major driver of overall, nor pediatric only, healthcare expenditures.

Defining the 90-day cost structure of lower extremity revascularization for alternative payment model assessment.

BACKGROUND: The U.S. healthcare system is undergoing a broad transformation from the traditional fee-for-service model to value-based payments. The changes introduced by the Medicare Quality Payment Program, including the establishment of Alternative Payment Models, ensure that the practice of vascular surgery is likely to face significant reimbursement changes as payments transition to favor these models. The Society for Vascular Surgery Alternative Payment Model taskforce was formed to explore the opportunities to develop a physician-focused payment model that will allow vascular surgeons to continue to deliver the complex care required for peripheral arterial disease (PAD). METHODS: A financial analysis was performed based on Medicare beneficiaries who had undergone qualifying index procedures during fiscal year 2016 through the third quarter of 2017. Index procedures were defined using a list of Healthcare Common Procedural Coding (HCPC) procedure codes that represent open and endovascular PAD interventions. Inpatient procedures were mapped to three diagnosis-related group (DRG) families consistent with PAD conditions: other vascular procedures (codes, 252-254), aortic and heart assist procedures (codes, 268, 269), and other major vascular procedures (codes, 270-272). Patients undergoing outpatient or office-based procedures were included if the claims data were inclusive of the HCPC procedure codes. Emergent procedures, patients with end-stage renal disease, and patients undergoing interventions within the 30 days preceding the index procedure were excluded. The analysis included usage of postacute care services (PACS) and 90-day postdischarge events (PDEs). PACS are defined as rehabilitation, skilled nursing facility, and home health services. PDEs included emergency department visits, observation stays, inpatient readmissions, and reinterventions. RESULTS: A total of 123,180 cases were included. Of these 123,180 cases, 82% had been performed in the outpatient setting. The Medicare expenditures for all periprocedural services provided at the index procedure (ie, professional, technical, and facility fees) were higher in the inpatient setting, with an average reimbursement per index case of $18,755, $34,600, and $25,245 for DRG codes 252 to 254, DRG codes 268 and 269, and DRG codes 270 to 272, respectively. Outpatient facility interventions had an average reimbursement of $11,458, and office-based index procedures had costs of $11,533. PACS were more commonly used after inpatient index procedures. In the inpatient setting, PACS usage and reimbursement were 58.6% ($5338), 57.2% ($4192), and 55.9% ($5275) for DRG codes 252 to 254, DRG codes 268 and 269, and DRG codes 270 to 272, respectively. Outpatient facility cases required PACS for 13.7% of cases (average cost, $1352), and office-based procedures required PACS in 15% of cases (average cost, $1467). The 90-day PDEs were frequent across all sites of service (range, 38.9%-50.2%) and carried significant costs. Readmission was associated with the highest average PDE expenditure (range, $13,950-$18.934). The average readmission Medicare reimbursement exceeded that of the index procedures performed in the outpatient setting. CONCLUSIONS: The cost of PAD interventions extends beyond the index procedure and includes relevant spending during the long postoperative period. Despite the analysis challenges related to the breadth of vascular procedures and the site of service variability, the data identified potential cost-saving opportunities in the management of costly PDEs. Because of the vulnerability of the PAD patient population, alternative payment modeling using a bundled value-based approach will require reallocation of resources to provide longitudinal patient care extending beyond the initial intervention.

The Society for Vascular Surgery Alternative Payment Model Task Force report on opportunities for value-based reimbursement in care for patients with peripheral artery disease.

The Society for Vascular Surgery Alternative Payment Model (APM) Taskforce document explores the drivers and implications for developing objective value-based reimbursement plans for the care of patients with peripheral arterial disease (PAD). The APM is a payment approach that highlights high-quality and cost-efficient care and is a financially incentivized pathway for participation in the Quality Payment Program, which aims to replace the traditional fee-for-service payment method. At present, the participation of vascular specialists in APMs is hampered owing to the absence of dedicated models. The increasing prevalence of PAD diagnosis, technological advances in therapeutic devices, and the increasing cost of care of the affected patients have financial consequences on care delivery models and population health. The document summarizes the existing measurement methods of cost, care processes, and outcomes using payor data, patient-reported outcomes, and registry participation. The document also evaluates the existing challenges in the evaluation of PAD care, including intervention overuse, treatment disparities, varied clinical presentations, and the effects of multiple comorbid conditions on the cost potentially attributable to the vascular interventionalist. Medicare reimbursement data analysis also confirmed the prolonged need for additional healthcare services after vascular interventions. The Society for Vascular Surgery proposes that a PAD APM should provide patients with comprehensive care using a longitudinal approach with integration of multiple key medical and surgical services. It should maintain appropriate access to diagnostic and therapeutic advancements and eliminate unnecessary interventions. It should also decrease the variability in care but must also consider the varying complexity of the presenting PAD conditions. Enhanced quality of care and physician innovation should be rewarded. In addition, provisions should be present within an APM for high-risk patients who carry the risk of exclusion from care because of the naturally associated high costs. Although the document demonstrates clear opportunities for quality improvement and cost savings in PAD care, continued PAD APM development requires the assessment of more granular data for accurate risk adjustment, in addition to largescale testing before public release. Collaboration between payors and physician specialty societies remains key.

The Impact of Medicare's Alternative Payment Models on the Value of Care.

Over the past decade, the Centers for Medicare and Medicaid Services (CMS) have led the nationwide shift toward value-based payment. A major strategy for achieving this goal has been to implement alternative payment models (APMs) that encourage high-value care by holding providers financially accountable for both the quality and the costs of care. In particular, the CMS has implemented and scaled up two types of APMs: population-based models that emphasize accountability for overall quality and costs for defined patient populations, and episode-based payment models that emphasize accountability for quality and costs for discrete care. Both APM types have been associated with modest reductions in Medicare spending without apparent compromises in quality. However, concerns about the unintended consequences of these APMs remain, and more work is needed in several important areas. Nonetheless, both APM types represent steps to build on along the path toward a higher-value national health care system.

Value-based care for the treatment and evaluation of benign prostatic hyperplasia: an analysis of a metropolitan service area claims database.

PURPOSE: With an aging population, cost containment and improved outcomes will be crucial for a sustainable healthcare ecosystem. Current data demonstrate great variation in payments for procedures and diagnostic workup of benign prostatic hyperplasia (BPH). To help determine the best financial value in BPH care, we sought to analyze the major drivers of total payments in BPH. MATERIALS AND METHODS: Commercial and Medicare claims from the Truven Health Analytics Markestscan® database for the Austin, Texas Metropolitan Service Area from 2012 to 2014 were queried for encounters with diagnosis and procedural codes related to BPH. Linear regression was utilized to assess factors related to BPH-related payments. Payments were then compared between surgical patients and patients managed with medication alone. RESULTS: Major drivers of total payments in BPH care were operative, namely transurethral resection of prostate (TURP) [$2778, 95% CI ($2385-$3171), p < 0.001) and photoselective vaporization (PVP) ($3315, 95% CI ($2781-$3849) p < 0.001). Most office procedures were also associated with significantly higher payments, including cystoscopy [$708, 95% CI ($417-$999), p < 0.001], uroflometry [$446, 95% CI ($225-668), p < 0.001], urinalysis [$167, 95% CI ($32-$302), p = 0.02], postvoid residual (PVR) [$245, 95% CI ($83-$407), p < 0.001], and urodynamics [$1251, 95% CI ($405-2097), p < 0.001]. Patients who had surgery had lower payments for their medications compared to patients who had no surgery [$120 (IQR: $0, $550) vs. $532 (IQR: $231, $1852), respectively, p < 0.001]. CONCLUSION: Surgery and office-based procedures are associated with increased payments for BPH treatment. Although payments for surgery were more in total, surgical patients paid significantly less for BPH medications.

Value of Information Analysis for Research Decisions-An Introduction: Report 1 of the ISPOR Value of Information Analysis Emerging Good Practices Task Force.

Healthcare resource allocation decisions made under conditions of uncertainty may turn out to be suboptimal. In a resource constrained system in which there is a fixed budget, these suboptimal decisions will result in health loss. Consequently, there may be value in reducing uncertainty, through the collection of new evidence, to make better resource allocation decisions. This value can be quantified using a value of information (VOI) analysis. This report, from the ISPOR VOI Task Force, introduces VOI analysis, defines key concepts and terminology, and outlines the role of VOI for supporting decision making, including the steps involved in undertaking and interpreting VOI analyses. The report is specifically aimed at those tasked with making decisions about the adoption of healthcare or the funding of healthcare research. The report provides a number of recommendations for good practice when planning, undertaking, or reviewing the results of VOI analyses.

Value-Based Pharmaceutical Contracts: Value for Whom?

Value-based pharmaceutical contracts (VBPCs) are performance-based reimbursement agreements between healthcare payers and pharmaceutical manufacturers in which the price, amount, or nature of reimbursement is tied to value-based outcomes. VBPCs are often complex, and the nature of who benefits and in what ways can be unclear. We discuss how VBPCs compare with value-based payer-provider arrangements in terms of performance-based reimbursements and alignment of incentives. In addition, we examine how VBPCs can affect costs, clinical outcomes, and access to medications. Because these contracts are unlikely to reduce costs in isolation, we recommend taking a patient-centered approach when developing VBPCs and tying VBPCs to more overarching payer drug cost reduction strategies.

Deprescribing in Advanced Illness: Aligning Patient, Clinician, and Health Plan Goals.

Polypharmacy has been linked to adverse outcomes including increased risk of hospitalization, falls, and death and contributes to unnecessary healthcare spending. Deprescribing efforts aim to reduce medication burden while improving or maintaining patients' quality of life. While the practice of deprescribing is gaining momentum, quality measurement and provider reimbursement are barriers that must be addressed for deprescribing to achieve widespread adoption. Because many quality measures are focused on medication use and adherence, deprescribing efforts may negatively impact primary care provider and health plan quality ratings and value-based reimbursement. In addressing this conflict, there are opportunities to proactively align the priorities and incentives of patients, providers, and plans to promote deprescribing. In this report, we propose several actionable steps to address quality and reimbursement-based barriers such as facilitating the exclusion of those engaged in deprescribing efforts from quality measures and the development of deprescribing-based quality measures.

Association of Patient Social, Cognitive, and Functional Risk Factors with Preventable Hospitalizations: Implications for Physician Value-Based Payment.

BACKGROUND: Ambulatory care-sensitive condition (ACSC) hospitalizations are used to evaluate physicians' performance in Medicare value-based payment programs. However, these measures may disadvantage physicians caring for vulnerable populations because they omit social, cognitive, and functional factors that may be important determinants of hospitalization. OBJECTIVE: To determine whether social, cognitive, and functional risk factors are associated with ACSC hospitalization rates and whether adjusting for them changes outpatient safety-net providers' performance. DESIGN: Using data from the Medicare Current Beneficiary Survey, we conducted patient-level multivariable regression to estimate the association (as incidence rate ratios (IRRs)) between patient-reported social, cognitive, and functional risk factors and ACSC hospitalizations. We compared outpatient safety-net and non-safety-net providers' performance after adjusting for clinical comorbidities alone and after additional adjustment for social, cognitive, and functional factors captured in survey data. SETTING: Safety-net and non-safety-net clinics. PARTICIPANTS: Community-dwelling Medicare beneficiaries contributing 38,616 person-years from 2006 to 2013. MEASUREMENTS: Acute and chronic ACSC hospitalizations. RESULTS: After adjusting for clinical comorbidities, Alzheimer's/dementia (IRR 1.30, 95% CI 1.02-1.65), difficulty with 3-6 activities of daily living (ADLs) (IRR 1.43, 95% CI 1.05-1.94), difficulty with 1-2 instrumental ADLs (IADLs, IRR 1.54, 95% CI 1.26-1.90), and 3-6 IADLs (IRR 1.90, 95% CI 1.49-2.43) were associated with acute ACSC hospitalization. Low income (IRR 1.28, 95% CI 1.03-1.58), lack of educational attainment (IRR 1.33, 95% CI 1.04-1.69), being unmarried (IRR 1.18, 95% CI 1.01-1.36), difficulty with 1-2 IADLs (IRR 1.30, 95% CI 1.05-1.60), and 3-6 IADLs (IRR 1.44, 95% CI 1.16-1.80) were associated with chronic ACSC hospitalization. Adding these factors to standard Medicare risk adjustment eliminated outpatient safety-net providers' performance gap (p < .05) on ACSC hospitalization rates relative to non-safety-net providers. CONCLUSIONS: Social, cognitive, and functional risk factors are independently associated with ACSC hospitalizations. Failure to account for them may penalize outpatient safety-net providers for factors that are beyond their control.

New Cost-Effectiveness Methods to Determine Value-Based Prices for Potential Cures: What Are the Options?

Evaluating different approaches to assessing the clinical effectiveness and value of potential cures will be essential to arm the policymaker, payer, and manufacturer communities with a platform that can reward innovation while supporting a sustainable health insurance system. Potential cures will accentuate concerns about substantial uncertainty in long-term outcomes. They will also focus attention on whether broader elements of value need to be incorporated and whether specific social values have a special place in evaluations of potential cures. In addition, the large magnitudes of potential health gain and cost offsets may require new methods before translation into value-based price recommendations. This article analyzes the challenges and presents several options to modify the conduct and presentation of cost-effectiveness analyses to ensure they provide policy-relevant assessments of the value of potential cures.

Higher Volume Surgeons Have Lower Medicare Payments, Readmissions, and Mortality After THA.

BACKGROUND: The advent of value-based care, in which surgeons and hospitals accept more responsibility for clinical and financial results, has increased the focus on surgeon- and hospital-specific outcomes. However, methods to identify high-quality, low-cost surgeons are not well developed. QUESTIONS/PURPOSES: (1) Is there an association between surgeon THA volume and 90-day Centers for Medicare & Medicaid Services (CMS) Part A payments, readmissions, or mortality? (2) What proportion of THAs in the United States is performed by low- and high-volume surgeons? METHODS: We performed a retrospective analysis of the CMS Limited Data Set on all primary elective THAs performed in the United States (except Maryland) between January 2013 and June 2016 on patients insured by Medicare. This represented 409,844 THAs totaling more than USD 7.7 billion in direct CMS expenditures. Surgeons were divided into five groups based on annualized volume of CMS elective THAs over the study period. Using linear and logistic regression, we calculated and compared 90-day CMS Part A payments, readmissions, and mortality among the groups. For each episode, demographic information (age, sex, and race), geographic location, and Elixhauser comorbidities were calculated to control for major confounding factors in the regression. RESULTS: When compared with the highest volume group, each lower volume group had increased payments, increased readmission rates, and increased mortality rates in a stepwise fashion when controlling for patient-specific variables including Elixhauser comorbidity index, demographic information, region, and background trend. The lowest volume group resulted in 27.2% more CMS payments per case (p < 0.001; 95% confidence interval [CI], 26.6%-27.8%), had an increased readmission odds ratio (OR) of 1.8 (p < 0.001; 95% CI, 1.7-1.9), and an increased mortality OR of 4.7 (p < 0.001; 95% CI, 4.0-5.5) when compared with the highest volume group. There was also variation within volume groups: some lower volume surgeons had lower payments, readmissions, and mortality than some higher volume surgeons despite the general trend. In terms of CMS volume, surgeons who were at least moderate volume (11+ annual cases) performed 78% of THAs and represented 26% of operating surgeons. The low- and lowest volume surgeons (10 or fewer annual cases) performed only 22% of THAs in the United States while representing 74% of unique operating surgeons. CONCLUSIONS: There is a strong association between a surgeon's Medicare volume and lower CMS payments, readmissions, and mortality. Furthermore, the majority of Medicare THAs in the United States are performed by surgeons who perform > 10 CMS operations annually. Compared with previous work, these results suggest a trend toward higher volume surgeons in the Medicare population. The results also suggest a benefit to the shift toward higher volume surgeons in reducing payments, readmissions, and mortality for elective THA in the United States. However, given that payments, readmission, and mortality of surgeons varied widely, it is important to note that available individual CMS data can be used to directly evaluate each individual surgeon based on their actual results well as through association with volume. LEVEL OF EVIDENCE: Level III, therapeutic study.

Critical Care Organizations: Business of Critical Care and Value/Performance Building.

OBJECTIVE: New, value-based regulations and reimbursement structures are creating historic care management challenges, thinning the margins and threatening the viability of hospitals and health systems. The Society of Critical Care Medicine convened a taskforce of Academic Leaders in Critical Care Medicine on February 22, 2016, during the 45th Critical Care Congress to develop a toolkit drawing on the experience of successful leaders of critical care organizations in North America for advancing critical care organizations (Appendix 1). The goal of this article was to provide a roadmap and call attention to key factors that adult critical care medicine leadership in both academic and nonacademic setting should consider when planning for value-based care. DESIGN: Relevant medical literature was accessed through a literature search. Material published by federal health agencies and other specialty organizations was also reviewed. Collaboratively and iteratively, taskforce members corresponded by electronic mail and held monthly conference calls to finalize this report. SETTING: The business and value/performance critical care organization building section comprised of leaders of critical care organizations with expertise in critical care administration, healthcare management, and clinical practice. MEASUREMENTS AND MAIN RESULTS: Two phases of critical care organizations care integration are described: "horizontal," within the system and regionalization of care as an initial phase, and "vertical," with a post-ICU and postacute care continuum as a succeeding phase. The tools required for the clinical and financial transformation are provided, including the essential prerequisites of forming a critical care organization; the manner in which a critical care organization can help manage transformational domains is considered. Lastly, how to achieve organizational health system support for critical care organization implementation is discussed. CONCLUSIONS: A critical care organization that incorporates functional clinical horizontal and vertical integration for ICU patients and survivors, aligns strategy and operations with those of the parent health system, and encompasses knowledge on finance and risk will be better positioned to succeed in the value-based world.

Balancing early access with uncertainties in evidence for drugs authorized by prospective case series - systematic review of reimbursement decisions.

AIMS: To review clinical and cost-effectiveness evidence underlying reimbursement decisions relating to drugs whose authorization mainly is based on evidence from prospective case series. METHODS: A systematic review of all new drugs evaluated in 2011-2016 within a health care profession-driven resource prioritization process, with a market approval based on prospective case series, and a reimbursement decision by the Swedish Dental and Pharmaceutical Benefits Agency (TLV). Public assessment reports from the European Medicines Agency, published pivotal studies, and TLV, Scottish Medicines Consortium and National Institute of Health and Care Excellence decisions and guidance documents were reviewed. RESULTS: Six drug cases were assessed (brentuximab vedotin, bosutinib, ponatinib, idelalisib, vismodegib, ceritinib). The validity of the pivotal studies was hampered by the use of surrogate primary outcomes and the absence of recruitment information. To quantify drug treatment effect sizes, the reimbursement agencies primarily used data from another source in indirect comparisons. TLV granted reimbursement in five cases, compared with five in five cases for Scottish Medicines Consortium and four in five cases for National Institute of Health and Care Excellence. Decision modifiers, contributing to granted reimbursement despite hugely uncertain cost-effectiveness ratios, were, for example, small population size, occasionally linked to budget impact, severity of disease, end of life and improved life expectancy. CONCLUSION: For drugs whose authorization is based on prospective case series, most applications for reimbursement within public health care are granted. The underlying evidence has limitations over and above the design per se, and decision modifiers are frequently referred to in the value-based pricing decision making.

Considerations in the Care of Non-Small-Cell Lung Cancer: The Value Imperative.

Cancer costs in the United States continue to escalate at an alarming and unsustainable rate. These costs are not driven exclusively by a higher demand for services or by an aging population; rather, a number of systemic failures, highlighted by the Institute of Medicine (IOM), continue to plague our cancer care delivery systems and need to be rectified. Drug costs, plus expensive diagnostic tests, hospital admissions/readmissions, and unreasonable end-of-life care, combine to inflate the total cost of care. Cancer, particularly lung cancer, is one of the most expensive diseases in the United States. While individual oncologists are unlikely to influence costs in the short term, they can become more proficient at evaluating the value derived from new treatment options and maximizing the clinical benefit for their patients. Discussions of cost and patient values need not hinder patient-physician relationships, and, in fact, can strengthen them. This article discusses ways in which the oncologist can incorporate value into the management of patients with lung cancer and comply with the underlying principles of the Choose Wisely Campaign, as well as recent American Society of Clinical Oncology and European Society for Medical Oncology initiatives, to bend the cost curve downwards while maintaining efficacy.

Supporting Transformation through Delivery System Reform Incentive Payment Programs: Lessons from New York State.

The New York Delivery System Reform Incentive Payment (DSRIP) waiver was viewed as a prototype for Medicaid and safety net redesign waivers in the Affordable Care Act (ACA) era. After the insurance expansions of the ACA were implemented, it was apparent that accountability, value, and quality improvement would be priorities in future waivers in many states. Despite New York's distinct provider relationships, previous coverage expansions, and local and state politics, it is important to understand the key characteristics of the waiver so that other states can learn how to better incorporate value-based arrangements into future waivers or attempts to limit spending under proposed Medicaid per-capita caps or block grants. In this article, we examine the New York DSRIP waiver by drawing on its design, early experiences, and evolution to inform recommendations for the future renewal, implementation, and expansion of redesigned or transformational Medicaid waivers.

The imperative for emergency medicine to create its own alternative payment model.

Seven years after the Affordable Care Act legislated Alternative Payment Models, it is time for Emergency Medicine to find its place within this value-based trend by developing its own Alternative Payment Model.

Quality measures and pediatric radiology: suggestions for the transition to value-based payment.

Recent political and economic factors have contributed to a meaningful change in the way that quality in health care, and by extension value, are viewed. While quality is often evaluated on the basis of subjective criteria, pay-for-performance programs that link reimbursement to various measures of quality require use of objective and quantifiable measures. This evolution to value-based payment was accelerated by the 2015 passage of the Medicare Access and CHIP (Children's Health Insurance Program) Reauthorization Act (MACRA). While many of the drivers of these changes are rooted in federal policy and programs such as Medicare and aimed at adult patients, the practice of pediatrics and pediatric radiology will be increasingly impacted. This article addresses issues related to the use of quantitative measures to evaluate the quality of services provided by the pediatric radiology department or sub-specialty section, particularly as seen from the viewpoint of a payer that may be considering ways to link payment to performance. The paper concludes by suggesting a metric categorization strategy to frame future work on the subject.