A tale of two bounties: the impact of competing fees on physician behavior

This study examines how the volume of privately insured services provided in hospital inpatient and outpatient departments changes in response to reductions in Medicare physician payments. We hypothesize that physicians consider relative payment rates when choosing which patients to treat in their practices. When Medicare reduces its payments for surgical procedures, as it did in the late 1980s, physicians are predicted to treat more privately insured patients because they become more lucrative. We use data from 182 hospitals for seventeen major procedures groups, covering a forty-five-month period between 1988 and 1991 that encom passes a twenty-four-month period before the reduction in Medicare fees and twenty-one months after the reduction. Our findings are consistent with the predictions for a number of procedure groups, but not for all of them. One implication of the findings is that societal savings from Medicare fee reductions are overstated if one does not also consider spillover effects in the private insurance market.

Medicare physician payment reform and the utilization of cardiovascular procedures

Effective 1992, the US Congress implemented the Resource-Based Relative Value Scale (RBRVS) for pricing and reimbursing Medicare physician services. This study evaluates the post-1991 impacts of RBRVS on the utilization volumes of two leading cardiovascular procedures--Percutaneous Transluminal Coronary Artery (PTCA) and Coronary Artery Bypass Grafts (CABG). The regression model results based on HCFA-supplied data suggest that the new reimbursement policy reduced (increased) utilization volumes of the more (less) expensive CABG (PTCA) procedures. Physician adjustments to tightened HCFA reimbursements are partly aided by the increased percentage of Medicare patients enrolled in Medigap. The RBRVS fee schedule appears to be meeting its intended cost containment policy goals for the leading cardiovascular procedures.

Do interventional radiologists pose a significant threat to the practice of vascular surgery?

PURPOSE

Vascular surgeons have become concerned recently about perceived threats to their practices posed by the growth of interventional radiology. The authors studied nationwide 1996 Medicare Part B procedure data to determine the seriousness of these threats.

MATERIALS AND METHODS

The national Health Care Financing Administration (HCFA) Physician/Supplier Procedure Summary Master File for 1996 was searched. Two hundred thirteen distinct Current Procedural Terminology (CPT-4) codes were identified for therapeutic surgical and percutaneous interventional procedures performed to treat noncardiac vascular diseases. For each code, determination was made of total volume, specialty of the physician providers, and Medicare Part B reimbursement dollars paid to the providers as professional fees. In view of the conflicts among various specialties over peripheral vascular interventions, the authors also determined the percentages of these procedures performed by radiologists, surgeons, cardiologists, and other physicians.

RESULTS

A total of 759,548 noncardiac therapeutic vascular procedures (operations or percutaneous interventions) were performed during 1996 in patients receiving Medicare benefits. Radiologists performed 135,103 (17.8%) of these procedures but received only 10.4% of professional reimbursements. By contrast, surgeons performed 510,871 (67.3%) procedures, but received 78.0% of professional reimbursements. Cardiologists performed 4.7% of procedures and other specialists performed the remaining 10.3%. Radiologists performed 75.5% of percutaneous transluminal angioplasties, the majority of thrombolysis procedures, stent placements, and portal decompression procedures, and approximately half of inferior vena cava interruptions. Cardiologists performed 12.6% of percutaneous transluminal angioplasties, surgeons performed 6.3%, and other specialists performed 5.6%.

CONCLUSIONS

In terms of overall physician workload and professional reimbursements paid for invasive treatment of all types of noncardiac vascular disease, surgeons predominate and do not appear to be seriously threatened by interventional radiologists. Radiologists perform three-fourths of noncardiac percutaneous transluminal angioplasties and a majority of other percutaneous interventional therapies for vascular disease, but some inroads have been made by cardiologists and surgeons, particularly the former.

A tool to assess homebound status

Although this specific instrument focuses solely on helping the home care nurse determine homebound status, this type of instrument can be developed for the other criteria used in assessing a client for Medicare-eligible home care services. For example, a similar instrument can be developed to assess whether a patient meets the criteria for part-time intermittent care or skilled care using the Medicare definitions as a guide to tool development. As we move into a time when there is more scrutiny of home care for compliance to Medicare regulations and increased productivity to assure cost effectiveness, instruments like this are essential for careful documentation that allows the agency to demonstrate accountability. In addition, home care agencies are expecting new home care nurses to know and be able to apply the Medicare regulations after a brief orientation. Instruments like this can shorten the orientation process and provide support for the home care nurse in the field.

Frequency of HgbA1c testing as a measure of diabetes care in Louisiana

The Frequency of HgbA1c Testing Project is a continuous quality improvement project designed to measure and improve the frequency of HgbA1c testing among Medicare diabetic patients in Louisiana. Louisiana Medicare Part B electronic claims data from June 1995 to December 1996 were used to construct diabetes quality of care type indicators. A total of 47,270 Medicare, Part B eligible, non-HMO, diabetic patients were identified and studied. The statewide baseline results indicated that only 24% of the Medicare diabetic patients were covered by an HgbA1c test within 180 days from their last physician office visit. Twenty-one percent (21%) of practicing primary care physicians had none of their diabetic patients tested for HgbA1c within 180 days from the patient's last office visit. Overall, only 18% of all primary care physicians "seized" the opportunity to perform an HgbA1c test within this time frame. Twenty-two percent (22%) of Louisiana primary care physicians had never seized the opportunity to check for HgbA1c on eligible patients. Interventions and strategies are being implemented statewide in order to improve the low HgbA1c testing rates.

Epidemiology of recurrent cerebral infarction: a medicare claims-based comparison of first and recurrent strokes on 2-year survival and cost

BACKGROUND AND PURPOSE

Because recurrent strokes will tend to leave patients with greater disability than first strokes, patients with recurrent strokes should have poorer outcomes on average than those with first strokes. The extent of this difference has, however, not yet been estimated with precision.

METHODS

Using a random 20% sample of Medicare patients aged 65 years and older admitted with a primary diagnosis of cerebral infarction during calendar year 1991, we used historical data from the previous 4 years to classify patients as having either first or recurrent stroke and followed survival and direct medical costs for 24 months after stroke. First and recurrent stroke groups were compared with the log-rank test (survival) and t test (cost) and also multivariate modeling.

RESULTS

Survival from first stroke is consistently better than that for recurrent stroke: 24-month survival was 56.7% versus 48.3%, respectively. Costs were similar for the initial hospital stay and in months 1 to 3 after stroke. During months 4 to 24 after stroke, total costs were higher among those with recurrent stroke by approximately $375/mo across all patients, with this difference being greatest for younger patients and least for patients aged 80 years or older. Most of the difference in total monthly cost was attributable to nursing home utilization (averaging approximately $150/mo) and acute hospitalization (averaging approximately $120/mo).

CONCLUSIONS

Patients with recurrent stroke have, on average, poorer outcomes than those with first stroke. To be as accurate as possible, clinical policy analyses should use different estimates of health and cost outcomes for first and recurrent stroke.

Physician response to Medicare fee reductions: changes in the volume of coronary artery bypass graft (CABG) surgeries in the Medicare and private sectors

The demand inducement hypothesis predicts that physicians will respond to reductions in their income by increasing the volume of their services when the income effect is strong and negative. I test for such inducement in the market for coronary artery bypass grafting (CABG), using a longitudinal panel of physicians in New York and Washington states. The results show that physicians whose incomes were reduced the most by Medicare fee cuts performed higher volumes of CABGs, and they did so in both the Medicare and private markets.

Health care payments: how low can they go?

Data Library: A new national pricing database features Medicare fee benchmarking data to help payers and providers who are trying to set market-based fees for a variety of services. Find out how Salt Lake City-based Medicode devised this tool to help define the market value of health care services.