The spillover effects of Medicare managed care: Medicare Advantage and hospital utilization

The effects of dental hygienist autonomy on dental care utilization

We investigate the effects of regulations governing the practice autonomy of dental hygienists on dental care use with the 2001-2014 Medical Expenditure Panel Survey. We measure the strength of autonomy regulations by extending the Dental Hygiene Professional Practice Index to the years 2001-2014, allowing us to capture changes in regulations within states over time. Using a difference-in-differences framework applied to selected states, we find that relaxing supervision requirements to provide dental hygienists moderate autonomy results in an increase in total dental visits due to greater use of preventive dental care. However, the use of dental treatment decreases when states adopt the highest level of autonomy. Both sets of estimates increase in magnitude when we subset the sample to dental care provider shortage areas. In support of these findings, we show that dental visits shift to dental hygienists in shortage areas when states expand the scope of practice of hygienists, and that there is an increase in tasks performed by hygienists, such as cleanings and dental exams.

Regional variation in length of stay for stroke inpatient rehabilitation in traditional Medicare and Medicare Advantage

Regional variation in health care use threatens efficient and equitable resource allocation. Within the Medicare program, variation in care delivery may differ between centrally administered traditional Medicare (TM) and privately managed Medicare Advantage (MA) plans, which rely on different strategies to control care utilization. As MA enrollment grows, it is particularly important for program design and long-term health care equity to understand regional variation between TM and MA plans. This study examined regional variation in length of stay (LOS) for stroke inpatient rehabilitation between TM and MA plans in 2019 and how that changed in 2020, the first year of the COVID-19 pandemic. Results showed that MA plans had larger across-region variations than TM (SD = 0.26 vs 0.24 days; 11% relative difference). In 2020, across-region variation for MA further increased, but the trend for TM stayed relatively stable. Market competition among all inpatient rehabilitation facilities (IRFs) within a region was associated with a moderate increase in within-region variation of LOS (elasticity = 0.46). Policies reducing administrative variation across MA plans or increasing regional market competition among IRFs can mitigate regional variation in health care use.

Primary Care Physicians In Medicare Advantage Were Less Costly, Provided Similar Quality Versus Regional Average

The use of many services is lower in Medicare Advantage (MA) compared with traditional Medicare, generating cost savings for insurers, whereas the quality of ambulatory services is higher. This study examined the role of selective contracting with providers in achieving these outcomes, focusing on primary care physicians. Assessing primary care physician costliness based on the gap between observed and predicted costs for their traditional Medicare patients, we found that the average primary care physician in MA networks was $433 less costly per patient (2.9 percent of baseline) compared with the regional mean, with less costly primary care physicians included in more networks than more costly ones. Favorable selection of patients by MA primary care physicians contributed partially to this result. The quality measures of MA primary care physicians were similar to the regional mean. In contrast, primary care physicians excluded from all MA networks were $1,617 (13.8 percent) costlier than the regional mean, with lower quality. Primary care physicians in narrow networks were $212 (1.4 percent) less costly than those in wide networks, but their quality was slightly lower. These findings highlight the potential role of selective contracting in reducing costs in the MA program.

Is there an advantage? Considerations for researchers studying the effects of the type of Medicare coverage

OBJECTIVE

To describe common methodological problems that arise in comparisons of Medicare Advantage (MA) and Traditional Medicare (TM) and within-MA studies and provide suggestions of how researchers can address these issues.

STUDY SETTING

Published research evaluating Medicare coverage options in the United States.

STUDY DESIGN

We considered key conceptual challenges and promising solutions that have been used thus far and suggest additional directions.

DATA COLLECTION

Not available.

PRINCIPAL FINDINGS

Many existing studies of MA versus TM include significant limitations, such as failing to account for unobserved confounders driving both beneficiary coverage choice and health outcomes once enrolled, not accounting for variation in benefit generosity, provider networks, or plan design across MA plans, and/or having been conducted at a time when MA enrollment was less than a third of all Medicare beneficiaries. We provide a review of methods that can help researchers to overcome these weaknesses and suggest additional methods and data sources that may aid future research.

CONCLUSIONS

The MA program is becoming an essential part of the US healthcare system. By accounting for non-random movement into and out of MA and studying the heterogeneity of beneficiary experience across plan and market characteristics, researchers can provide the high-quality evidence necessary for policymakers to design the program and reform TM in ways that maximize beneficiary outcomes.

Growth of Medicare Advantage After Plan Payment Reductions

Importance

Various policy proposals would reduce federal payments to Medicare Advantage (MA) plans. However, it is unclear whether payment reductions would compromise beneficiary access to the MA program.

Objective

To quantify the association between MA payment reductions under the Affordable Care Act (ACA) and MA enrollment growth.

Design, Setting, and Participants

This retrospective cohort study examined the MA market before and after the ACA, which mandated cuts to MA benchmark payment rates. Using 2008 to 2019 county-level enrollment and payment data, a difference-in-differences analysis was conducted comparing MA enrollment changes between counties with larger vs smaller benchmark reductions, before vs after the ACA.

Main Outcomes and Measures

The primary outcome was the MA enrollment rate, defined as the proportion of a county's Medicare beneficiaries enrolled in MA. A secondary analysis examined MA plan payments per member per month.

Results

Among 3138 counties with 37 639 county-year observations, ACA-induced benchmark cuts were sizeable and varied, ranging from 0% to 42.9% (mean [SD], 5.9% [6.6%]). Counties with benchmark cuts above the 75th percentile had population-weighted average benchmark cuts of 14.9% compared with 4.4% in other counties. In the 8 years following the ACA, there was no differential change in MA enrollment between counties with larger vs smaller benchmark cuts (difference-in-differences estimate, 0.02 [95% CI, -1.18 to 1.21] percentage points; P = .98). Plan payments differentially fell in counties with larger benchmark cuts by $78.35 (95% CI, $62.21-$94.48) per member per month (P < .001).

Conclusion and Relevance

This cohort study found no evidence that the MA benchmark and ensuing payment cuts imposed by the ACA were associated with reduced MA enrollment, compromising access to MA. This evidence can inform ongoing policy debates regarding the growth of MA, concerns about excess payments to MA plans, and proposed Medicare reforms, including further reductions in MA payments.

Increased Medicare Advantage Penetration Is Associated With Lower Postacute Care Use For Traditional Medicare Patients

Medicare Advantage (MA) plans, which accounted for 45 percent of total Medicare enrollment in 2022, are incentivized to minimize spending on low-value services. Prior research indicates that MA plan enrollment is associated with reduced postacute care use without adverse impacts on patient outcomes. However, it is unclear whether a rising MA enrollment level is associated with a change in postacute care use in traditional Medicare, especially given growing participation in traditional Medicare Alternative Payment Models that have been found to be associated with lower postacute care spending. We hypothesize that market-level MA expansion is associated with reduced postacute care use among traditional Medicare beneficiaries-a "spillover" effect of providers modifying their practice patterns in response to MA plans' incentives. We found increased MA market penetration associated with reduced postacute care use among traditional Medicare beneficiaries, without a corresponding increase in hospital readmissions. This association was generally stronger in markets with a greater share of traditional Medicare beneficiaries attributed to accountable care organizations, suggesting that policy makers should account for MA penetration when evaluating potential savings in Alternative Payment Models within traditional Medicare.

Impact of Medicare eligibility on informal caregiving for surgery and stroke

OBJECTIVE

To assess whether the intensity of family and friend care changes after older individuals enroll in Medicare at age 65.

DATA SOURCES

Health and Retirement Study survey data (1998-2018).

STUDY DESIGN

We compared informal care received by patients hospitalized for stroke, heart surgery, or joint surgery and who were stratified into propensity-weighted pre- and post-Medicare eligibility cohorts. A regression discontinuity design compared the self-reported likelihood of any care receipt, weekly hours of overall informal care, and intensity of informal care (hours among those receiving any care) at Medicare eligibility.

DATA COLLECTION

Not applicable.

PRINCIPAL FINDINGS

A total of 2270 individuals were included; 1674 (73.7%) stroke, 240 (10.6%) heart surgery, and 356 (15.7%) joint surgery patients. Mean (SD) care received was 20.0 (42.1) weekly hours. Of the 1214 (53.5%) patients who received informal care, the mean (SD) care receipt was 37.4 (51.7) weekly hours. Mean (SD) overall weekly care received was 23.4 (45.5), 13.9 (35.8), and 7.8 (21.6) for stroke, heart surgery, and joint surgery patients, respectively. The onset of Medicare eligibility was associated with a 13.6 percentage-point decrease in the probability of informal care received for stroke patients (p = 0.003) but not in the other acute care cohorts. Men had a 16.8 percentage-point decrease (p = 0.002) in the probability of any care receipt.

CONCLUSIONS

Medicare coverage was associated with a substantial decrease in family and friend caregiving use for stroke patients. Informal care may substitute for rather than complement restorative care, given that Medicare is known to expand the use of postacute care. The observed spillover effect of Medicare coverage on informal caregiving has implications for patient function and caregiver burden and should be considered in episode-based reimbursement models that alter professional rehabilitative care intensity.

Characterizing the Relationship Between Payer Mix and Diagnostic Intensity at the Hospital Level

BACKGROUND

Overuse of diagnostic testing in the hospital setting contributes to high healthcare costs, yet the drivers of diagnostic overuse in this setting are not well-understood. If financial incentives play an important role in perpetuating hospital-level diagnostic overuse, then hospitals with favorable payer mixes might be more likely to exhibit high levels of diagnostic intensity.

OBJECTIVES

To apply a previously developed hospital-level diagnostic intensity index to characterize the relationship between payer mix and diagnostic intensity.

DESIGN

Cross-sectional analysis SUBJECTS: Acute care hospitals in seven states MAIN MEASURES: We utilized a diagnostic intensity index to characterize the level of diagnostic intensity at a given hospital (with higher index values and tertiles signifying higher levels of diagnostic intensity). We used two measures of payer mix: (1) a hospital's ratio of discharges with Medicare and Medicaid as the primary payer to those with a commercial insurer as the primary payer, (2) a hospital's disproportionate share hospital ratio.

KEY RESULTS

A 5-fold increase in the Medicare or Medicaid to commercial insurance ratio was associated with an adjusted odds ratio of 0.24 (95% CI 0.16-0.36) of being in a higher tertile of the intensity index. A ten percentage point increase in the disproportionate share hospital ratio was associated with an adjusted odds ratio of 0.56 (95% CI 0.42-0.74) of being in a higher intensity index tertile.

CONCLUSIONS

At the hospital level, a favorable payer mix is associated with higher diagnostic intensity. This suggests that financial incentives may be a driver of diagnostic overuse.

Rural Medicare beneficiaries are increasingly likely to be admitted to urban hospitals

OBJECTIVE

To determine whether rural Medicare FFS beneficiaries are more likely to be admitted to an urban hospital in 2018 than in 2010.

DATA SOURCES

We combined data from the 2010 to 2018 Hospital Service Area File (HSAF) and the 2010-2017 American Hospital Association (AHA) survey.

STUDY DESIGN

We conducted a fixed-effects negative-binomial regression to determine whether urban hospital admissions from rural ZIP codes were increasing over time. We also conducted an exploratory geographically weighted regression.

DATA COLLECTION

We transformed the HSAF data into a ZIP code-level file with all rural ZIP codes. We defined rural as having a Rural-Urban Commuting Area (RUCA) code ≥4. A hospital's system affiliation status was incorporated from the AHA survey.

PRINCIPAL FINDINGS

Controlling for distance to the nearest hospitals, an increase of 1 year was associated with a 2.0% increase (p < 0.001) in the number of admissions to urban hospitals from each rural ZIP code. New system affiliation of the nearest rural hospital was associated with an increase of 1.7% (p < 0.001).

CONCLUSIONS

Even when controlling for distance to the nearest rural hospital (which reflects hospital closures), rural patients were increasingly likely to be admitted to an urban hospital.

Association Between Medicare Program Type and Health Care Access, Acute Care Utilization, and Affordability Among Adults With Cardiovascular Disease

BACKGROUND

Medicare Advantage plans now provide health insurance coverage to >24 million older adults in the United States, and enrollment is increasing among individuals with cardiovascular disease (CVD). Whether Medicare Advantage enrollment is associated with similar health care access, acute care utilization, and financial strain for adults with CVD compared with traditional Medicare is unknown.

METHODS

We performed a cross-sectional study of Medicare beneficiaries 65 years or older with CVD using the 2019 National Health Interview Survey. We fit multivariable logistic regression models to examine the association of Medicare program type (Medicare Advantage versus traditional Medicare) with measures of health care access, acute care utilization, and affordability.

RESULTS

The weighted population included 11 013 437 Medicare beneficiaries, of whom 3 922 104 (35.6%) were enrolled in Medicare Advantage, and 7 091 334 (64.4%) were enrolled in traditional Medicare. Medicare Advantage and traditional Medicare enrollees were similar with respect to age, sex, racial/ethnic distribution, and household income; however, Medicare Advantage beneficiaries were more likely to live in an urban setting (82.7% versus 76.0%; P=0.01) and to be college educated (24.2% versus 19.0%; P=0.01). Medicare Advantage beneficiaries were more likely to have a usual source of care (93.5% versus 88.9%; OR, 1.99 [95% CI, 1.33-2.98)]; however, there were no other differences in health care access or utilization. Medicare Advantage beneficiaries were more likely to have problems paying medical bills (16.5% versus 11.6%; OR, 1.68 [1.17-2.40]) and to worry about paying medical bills (40.1% versus 33.8%; OR, 1.37 [1.07-1.76]) compared with those enrolled in traditional Medicare.

CONCLUSIONS

Adults with CVD in Medicare Advantage were more likely to experience financial strain related to their medical bills compared with those in traditional Medicare. As enrollment in Medicare Advantage grows, policy efforts should focus on ensuring care is affordable for patients with CVD.

Trading spaces: Medicare's regulatory spillovers on treatment setting for non-Medicare patients

Medicare pricing is known to indirectly influence provider prices and care provision for non-Medicare patients; however, Medicare's regulatory externalities beyond fee-setting are less well understood. We study how physicians' outpatient surgery choices for non-Medicare patients responded to Medicare removing a ban on ambulatory surgery center (ASC) use for a specific procedure. Following the rule change, surgeons began reallocating both Medicare and commercially insured patients to ASCs. Specifically, physicians became 70% more likely to use ASCs for the policy-targeted procedure among their non-Medicare patients. These novel findings demonstrate that Medicare rulemaking affects physician behavior beyond the program's statutory scope.

Mechanical Ventilation and Survival in Patients With Advanced Dementia in Medicare Advantage

CONTEXT

Medicare Advantage (MA) cares for an increasing proportion of traditional Medicare (TM) patients although, the association of MA on low-value care among hospitalized patients is uncertain.

OBJECTIVES

We sought to determine whether invasive mechanical ventilation (IMV) use or mortality differs among hospitalized patients with advanced dementia (AD) enrolled in MA vs. TM and the influence of hospital MA concentration.

METHODS

Retrospective cohort of hospitalized Medicare patients from 2016 to 2017 who were ≥66 years old with AD (n=147,153) and had a hospitalization with an assessment completed during a nursing home stay ≤120 days prior to that hospitalization indicating AD and severe cognitive/functional impairment. MA enrollment was ascertained at hospitalization; IMV use and 30- and 365-day mortality were determined via Medicare data. Multivariable logistic regression models clustered by hospital were used.

RESULTS

Among hospitalized Medicare patients with AD, 27,253 (19%) were enrolled in MA, mean age was 84 (95% CI: 83.9-84.0) and 92,736 (63%) were female. Enrollment in MA was associated with increased IMV use (Adjusted Odds Ratio(AOR)=1.11, 95% CI: 1.04-1.18), 30- (Adjusted Hazard Ratio(AHR)=1.09, 95% CI: 1.05-1.12) and 365-day mortality (AHR=1.12, 95% CI: 1.08-1.16) compared to TM. Use of IMV was not different based on concentration of MA at the hospital level.

CONCLUSION

MA may reduce hospitalizations, however, once hospitalized, patients with AD enrolled in MA experience higher rates of IMV use and worse 30- and 365-day mortality compared to TM patients. Higher hospital concentration of MA did not reduce use of IMV. MA may not offer significant benefits in reducing low-value care among patients hospitalized with serious illness, questioning the benefits of this care model.

Competition and efficiency in repeated procurements: Lessons from the Finnish rehabilitation markets

Inefficient practices and lack of competition are common problems in public procurements. In this study, I examine the effects of a procurement practice reform in the Finnish rehabilitation markets where providers are acquired in a repeated manner through competitive bidding scoring auctions. Until recently, the largest public procurer did not use any systematic criteria for accepting providers, and only a few providers did not receive a contract. After the reform, providers were systematically accepted based on their capacity and the local demand. I analyze the effects of the reform on prices in physio, speech and occupational therapy services with data that covers five subsequent procurements. I use the pre-reform differences in local competition within the markets in a difference-in-differences setting. The descriptive evidence shows that the reform slowed down the rapid increase of prices in all three services. The regression analysis indicates that effects are strongest in the most competitive local physiotherapy markets. This suggests that increasing entry and competition in the less competitive services and local markets would benefit the public procurer.

Assessing the Long-Term Effects of Basic Medical Insurance on Catastrophic Health Spending in China

Many developing countries have implemented social health insurance programs to protect their citizens against the financial risks of seeking healthcare. While many studies have explored how individual insurance enrollments affect catastrophic health spending (CHS) in the short term, there is a lack of evidence on the long-term macro-level effects of social health insurance on CHS in low- and middle-income countries. This study examines the long-term effects of Basic Medical Insurance (BMI) on individual CHS in China, a middle-income country that has witnessed one of the highest worldwide increases in CHS rates despite its remarkable achievement of universal health insurance coverage. Specifically, we used existing longitudinal data from 1989 to 2015, therein assessing BMI policy effects by constructing two macro-level indicators, including the year of BMI presence at the prefectural level and number of years relative to BMI introduction. We employed a three-level difference-in-differences approach for the estimation. There were two main findings. First, BMI policy did not significantly reduce the probability of incurring CHS for BMI enrollees over time. Years after BMI was introduced, the policy even predicted a significant increase in the probability of incurring CHS for individuals who shifted their enrollments from traditional insurance to BMI. Second, BMI policy had spillover effects on the increase in the probability of incurring CHS for non-BMI individuals a few years after its inception. We believe there are three possible explanations for these findings: (1) shrinking BMI service coverage compared to pre-existing government-funded insurance schemes, (2) a profit-driven hospital reform that induces the overuse of expensive medicines and diagnostic tests, and (3) the absence of strategic purchasing among local BMI agencies. We also discuss how relevant policy interventions may alleviate insurance-driven financial risks.

Effects of Medicare Advantage on patterns of end‐of‐life care among Medicare decedents

OBJECTIVE

To examine the effects of Medicare Advantage (MA) enrollment on patterns of end-of-life care.

DATA SOURCES

We used data from the Master Beneficiary Summary File, the Medicare Provider Analysis and Review, hospice claims, the Minimum Data Set, the Outcome and Assessment Information Set, the Area Health Resources File, and Geographic Variation Public Use File for 2012-2014.

STUDY DESIGN

To address selective enrollment into MA, we exploited a discontinuity in payment rates by county population (urban floor payments) as an instrument.

DATA COLLECTION/EXTRACTION METHODS

We identified Medicare beneficiaries continuously enrolled in MA or TM during their last year of life between 2012 and 2014 using Medicare administrative data.

PRINCIPAL FINDINGS

We did not find evidence that MA enrollment led to a change in hospital admissions in the last 30 days of life, but MA enrollment decreased hospital as the site of death by 11.0 (95% CI: -13.9 to -8.1) percentage points. Once hospitalized, however, MA enrollment increased use of intensive care by 6.7 (95% CI: 0.3 to 13.1) percentage points and non-invasive mechanical ventilation by 9.2 (95% CI: 5.5 to 12.9) percentage points. MA enrollment increased hospice use by 6.2 (95% CI: 2.3 to 10.1) percentage points at time of death and 7.7 (95% CI: 3.8 to 11.6) percentage points in the last 30 days of life. Particularly, MA enrollment increased hospice admissions among those who were admitted to the hospital within 30 days prior to hospice admission by 18.8 (95% CI: 13.8 to 23.8) percentage points. However, MA enrollment decreased hospice admissions among those who were admitted to home health within 30 days prior to hospice admission by 18.6 (95% CI: -21.9 to -15.2) percentage points.

CONCLUSIONS

MA plans may improve end-of-life care by reducing hospital death while also improving access to hospice, especially among recently hospitalized persons.

Price and income effects of hospital reimbursements

Health insurance systems in many countries reimburse hospitals through fixed prices based on the diagnosis-related groups (DRGs) of patients. We quantify the effects of price and income changes for the full spectrum of hospital services as average and heterogeneous elasticities of quantities (number of admissions) and quality-related outcomes. For our empirical analysis, we use data on over 160 million hospital admissions, constituting the universe of hospital admissions in Germany between 2005 and 2016. Our identification strategy is based on instruments exploiting a two-year lag in regulatory price setting. The strategy lends itself to a placebo test demonstrating that our instruments do not have substantive anticipatory direct effects. We find that the compensated own-price elasticity of quantity is positive (0.2), while the income elasticity is negative (-0.15). On net, increasing all prices increases costs due to a behavioral response of larger quantities in addition to the mechanical increase.

Geographic Variation in Medicare Fee-for-Service Health Care Expenditures Before and After the Passage of the Affordable Care Act

Question

Which categories of spending were associated with reductions in geographic variation of Medicare per-beneficiary spending across the US after the passage of the Affordable Care Act?

Findings

In this cross-sectional study of Medicare enrollees aged 65 years or older, geographic variation in Medicare fee-for-service spending per beneficiary was stable from 2007 to 2011 and then declined steadily from 2012 to 2018. A key factor associated with reduced geographic variation in spending was reduced variation in postacute care spending, specifically home health spending.

Meaning

These findings suggest that antifraud enforcement efforts and payment reforms that were instituted as part of the Affordable Care Act may have reduced geographic variation in Medicare fee-for-service per-beneficiary spending, although significant geographic variation remains.

Importance

Geographic variation in Medicare spending is often used as a measure of wasteful spending. A 2013 Institute of Medicine report found that postacute care was a key contributor of geographic variation from 2007 to 2009. However, payment reforms and antifraud efforts implemented after the passage of the Affordable Care Act (ACA) may have reduced geographic variation in spending, especially postacute care spending.

Objective

To investigate how geographic variation in Medicare fee-for-service per-beneficiary spending changed from 2007 to 2018 before and after passage of the ACA.

Design, Setting, and Participants

This cross-sectional study included all fee-for-service Medicare enrollees 65 years or older from January 1, 2007, to December 31, 2018. The fee-for-service Medicare Geographic Variation Public Use File was used to group hospital referral regions (HRRs) in each year into deciles (10 equal groups) based on per-beneficiary total spending. The difference between the per-beneficiary monthly spending in each decile and the national mean, as well as the ratio of per-beneficiary total spending in the top deciles to that of the bottom decile, were reported. Data analysis occurred from July 22, 2019, to October 21, 2021.

Main Outcomes and Measures

Per-beneficiary spending on hospital inpatient, hospital outpatient, physician, and postacute care (and type of postacute care).

Results

There were 27.2 million fee-for-service beneficiaries in 2007 (58.0% women) and 28.3 million beneficiaries in 2018 (55.9% women). Per-beneficiary Medicare spending was $9691 in 2007 and $9847 in 2018 (using inflation-adjusted 2018 dollars). Geographic variation in Medicare spending was stable from 2007 to 2011 and then declined steadily from 2012 to 2018. The ratio of per-beneficiary total Medicare spending in the HRRs in the top decile to the bottom decile was 1.68 in 2007 ($415 monthly difference in spending) but only 1.56 ($361 monthly difference in spending) in 2018 (estimated change, −0.12 [95% CI, −0.21 to −0.02]; P = .01). Focusing on specific spending categories, the only statistically significant reductions in geographic variation were found for home health; the ratio of home health spending among HRRs in the top to bottom deciles of total Medicare spending fell from 5.14 in 2007 to 3.45 in 2018 (change, −1.69 [95% CI, −3.30 to −0.09]; P = .04).

Conclusions and Relevance

Geographic variation in total per-beneficiary Medicare spending fell from 2007 to 2018, with home health spending being a key factor associated with geographic variation. The ACA’s value-based payment programs and enhanced integrity efforts in home health provide a possible explanation for the decrease.

Changes in patient experiences and assessment of gaming among large clinician practices in precursors of the Merit-Based Incentive Payment System

Question

Do clinician practices game pay-for-performance programs by selectively reporting measures on which they already perform well, and does mandating public reporting on patient experience measures improve care?

Findings

In this cross-sectional analysis of patient experience data from Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys, practices were more likely to voluntarily include CAHPS measures in a Medicare pay-for-performance program when they previously scored higher on these measures. However, mandatory public reporting of CAHPS measures was not associated with improved patient experiences with care.

Meaning

These findings support calls to end voluntary measure selection in public reporting and pay-for-performance programs, including Medicare’s Merit-Based Incentive Payment System, but also suggest that requiring practices to report on patient experiences may not produce gains.

Importance

Medicare’s Merit-Based Incentive Payment System (MIPS), a public reporting and pay-for-performance program, adjusts clinician payments based on publicly reported measures that are chosen primarily by clinicians or their practices. However, measure selection raises concerns that practices could earn bonuses or avoid penalties by selecting measures on which they already perform well, rather than by improving care—a form of gaming. This has prompted calls for mandatory reporting on a smaller set of measures including patient experiences.

Objective

To examine (1) practices’ selection of Consumer Assessment of Healthcare Providers and Systems (CAHPS) patient experience measures for quality scoring under the pay-for-performance program and (2) the association between mandated public reporting on CAHPS measures and performance on those measures within precursor programs of the MIPS.

Design, Setting, and Participants

This cross-sectional study included 2 analyses. The first analysis examined the association between the baseline CAHPS scores of large practices (≥100 clinicians) and practices’ selection of these measures for quality scoring under a pay-for-performance program up to 2 years later. The second analysis examined changes in patient experiences associated with a requirement that large practices publicly report CAHPS measures starting in 2014. A difference-in-differences analysis of 2012 to 2017 fee-for-service Medicare CAHPS data was conducted to compare changes in patient experiences between large practices (111-150 clinicians) that became subject to this reporting mandate and smaller unaffected practices (50-89 clinicians). Analyses were conducted between October 1, 2020, and July 30, 2021.

Main Outcomes and Measures

The primary outcomes of the 2 analyses were (1) the association of baseline CAHPS scores of large practices with those practices’ selection of those measures for quality scoring under a pay-for-performance program; and (2) changes in patient experiences associated with a requirement that large practices publicly report CAHPS measures starting in 2014.

Results

Among 301 large practices that publicly reported patient experience measures, the mean (IQR) age of patients at baseline was 71.6 (70.4-73.2 ) years, and 55.8% of patients were women (IQR, 54.3%-57.7%). Large practices in the top vs bottom quintile of patient experience scores at baseline were more likely to voluntarily include these scores in the pay-for-performance program 2 years later (96.3% vs 67.9%), a difference of 28.4 percentage points (95% CI, 9.4-47.5 percentage points; P = .004). After 2 to 3 years of the reporting mandate, patient experiences did not differentially improve in affected vs unaffected practices (difference-in-differences estimate: −0.03 practice-level standard deviations of the composite score; 95% CI, −0.64 to 0.58; P = .92).

Conclusions and Relevance

In this cross-sectional study of US physician practices that participated in precursors of the MIPS, large practices were found to select measures on which they were already performing well for a pay-for-performance program, consistent with gaming. However, mandating public reporting was not associated with improved patient experiences. These findings support recommendations to end optional measures in the MIPS but also suggest that public reporting on mandated measures may not improve care.

Medicare Advantage Networks and Access to High-volume Cancer Surgery Hospitals

OBJECTIVE

To determine how Medicare Advantage (MA) health plan networks impact access to high-volume hospitals for cancer surgery.

BACKGROUND

Cancer surgery at high-volume hospitals is associated with better short- and long-term outcomes. In the United States, health insurance is a major detriment to seeking care at high-volume hospitals. A third of older (>65 years) Americans are enrolled in privatized MA health plans. The impact of MA plan networks on access to high-volume surgery hospitals is unknown.

METHODS

We analyzed in-network hospitals for MA plans offered in Los Angeles county during open enrollment of 2015. For the purposes of this analysis, MA network data from provider directories were linked to hospital volume data from California Office of Statewide Health Planning and Development. Volume thresholds were based on published literature.

RESULTS

A total of 34 MA plans enrolled 554,754 beneficiaries in Los Angeles county during 2014 open enrollment for coverage starting in 2015 (MA penetration ∼43%). The proportion of MA plans that included high-volume cancer surgery hospital varied by the type of cancer surgery. While most plans (>71%) included at least one high-volume hospital for colon, rectum, lung, and stomach; 59% to 82% of MA plans did not include any high-volume hospitals for liver, esophagus, or pancreatic surgery. A significant proportion of beneficiaries in MA plans did not have access to high-volume hospitals for esophagus (93%), stomach (44%), liver (39%), or pancreas (70%) surgery. In contrast, nearly all MA beneficiaries had access to at least one high-volume hospital for lung (93%), colon (100%), or rectal (100%) surgery. Overall, Centers for Medicare & Medicaid Services plan rating or plan popularity were not correlated with access to high-volume hospital (P > 0.05).

CONCLUSIONS

The study identifies lack of high-volume hospital coverage in MA health plans as a major detriment in regionalization of cancer surgery impacting at least a third of older Americans.

Comparing Medicare Advantage And Traditional Medicare: A Systematic Review

Medicare Advantage enrollment has almost doubled since 2010 and now accounts for more than a third of all Medicare beneficiaries. We performed a systematic review to compare Medicare Advantage and traditional Medicare on key metrics. Evidence from forty-eight studies showed that in most or all comparisons, Medicare Advantage was associated with more preventive care visits, fewer hospital admissions and emergency department visits, shorter hospital and skilled nursing facility lengths-of-stay, and lower health care spending. Medicare Advantage outperformed traditional Medicare in most studies comparing quality-of-care metrics. However, the evidence on patient experience, readmission rates, mortality, and racial/ethnic disparities did not show a trend of better performance in Medicare Advantage. Evidence to date might not fully account for selection bias, unobserved differences in social determinants of health, or risk adjustment challenges, in part because of differences in data quality that limit the comparability of outcomes between Medicare Advantage and traditional Medicare. With Medicare Advantage plans expected to grow in popularity, policy makers should support policies to improve data completeness and comparability, and health plans should focus on improving patient experience.

State Medicaid Home and Community-Based Services Policies and Health Expenditures by Payer

This study examines the relationship between two state Medicaid home and community-based services (HCBS) policies - number of beneficiaries (Participation) and use per beneficiary (Intensity) - and individual health expenditures. Data include the 2008-2013 Medicare Current Beneficiary Survey and state-level Medicaid HCBS indicators. Two-part generalized linear models are estimated for health expenditures by payer and dual-eligibility status. The likelihood and level of Medicare expenditures are significantly lower in states in the top quartile of Participation and Intensity. Findings suggest that state Medicaid HCBS policies may impact health expenditures, with potential spillover effects on Medicare spending.

Measuring the Scope of Prior Authorization Policies

Question

How common and expensive are medical services that can require prior authorization?

Findings

This cross-sectional study examined medical services paid for by government-administered Medicare Part B, which lacks prior authorization requirements, for approximately 6.5 million beneficiaries; 2.2 services per beneficiary per year would have been subject to prior authorization under the coverage rules of a large Medicare Advantage insurer, and these services accounted for 25% of annual Part B spending.

Meaning

In Medicare, the scope of prior authorization policies differs considerably between government-administered insurance and privately administered insurance.

Importance

Health insurers use prior authorization to evaluate the medical necessity of planned medical services. Data challenges have precluded measuring the frequency with which medical services can require prior authorization, the spending on these services, the types of services and clinician specialties affected, and differences in the scope of prior authorization policies between government-administered and privately administered insurance.

Objectives

To measure the extent of prior authorization requirements for medical services and to describe the services and clinician specialties affected by them using novel data on private insurer coverage policies.

Design, Setting, and Participants

Fee-for-service Medicare claims from 2017 were analyzed for beneficiaries in Medicare Part B, which lacks prior authorization. We measured the use of services that would have been subject to prior authorization according to the coverage rules of a large Medicare Advantage insurer and calculated the associated spending. We report the rates of these services for 14 clinical categories and 27 clinician specialties.

Main Outcomes and Measures

Annual count per beneficiary and associated spending for 1151 services requiring prior authorization by the Medicare Advantage insurer; likelihood of providing 1 or more such service per year, by clinician specialty.

Results

Of 6 497 534 beneficiaries (mean [SD] age, 72.1 [12.1] years), 41% received at least 1 service per year that would have been subject to prior authorization under Medicare Advantage prior authorization requirements. The mean (SD) number of services per beneficiary per year was 2.2 (8.9) (95% CI, 2.17-2.18), corresponding to a mean (SD) of $1661 ($8900) in spending per beneficiary per year (95% CI, $1654-$1668), or 25% of total annual Part B spending. Part B drugs constituted 58% of the associated spending, mostly accounted for by hematology or oncology drugs. Radiology was the largest source of nondrug spending (16%), followed by musculoskeletal services (9%). Physician specialties varied widely in rates of services that required prior authorization, with highest rates among radiation oncologists (97%), cardiologists (93%), and radiologists (91%) and lowest rates among pathologists (2%) and psychiatrists (4%).

Conclusions and Relevance

In this cross-sectional study, a large portion of fee-for-service Medicare Part B spending would have been subject to prior authorization under private insurance coverage policies. Prior authorization requirements for Part B drugs have been an important source of difference in coverage policy between government-administered and privately administered Medicare.

How do hospitals respond to cross price incentives inherent in diagnosis-related groups systems? The importance of substitution in the market for sepsis conditions

This study addresses the question of how hospitals respond to the cross price incentives inherent in reimbursements based on diagnosis-related groups (DRG). Unique market-wide administrative data allow to exploit a natural experiment in Germany in which the relative attractiveness of greatly divergent reimbursements for clinically similar patients changes in the market for sepsis conditions on January 1, 2010. This natural experiment provides-unintentionally-extra reimbursements in cases in which hospitals reorganize transfers for deceasing patients to other facilities, alter the time of death, the choice of the condition being chiefly responsible for the hospital admission (primary diagnosis), or the intensity of mechanical ventilation. The differences-in-differences results demonstrate that hospitals primarily alter the primary diagnosis. As the choice of the primary diagnosis is the backbone of the design of modern DRG systems, the findings suggest that payment contracts between hospitals and payers based on modern DRG algorithms may not necessarily improve patient welfare.

Removing Medicare's outpatient ban and Medicare and private surgical trends

OBJECTIVES

To examine changes in hospital outpatient surgery trends and case mix for Medicare and privately insured patients needing total knee arthroplasty (TKA) following Medicare's removal of TKA from its Inpatient Only list on January 1, 2018.

STUDY DESIGN

A retrospective analysis of all hospital discharge records in Florida from 2012 through 2018.

METHODS

We tracked inpatient vs outpatient performance of TKAs at the state and hospital levels. We also combined our primary data with physician practice organization information to assess variation in the policy response according to physician-hospital ownership status. Supplementary analyses examined policy-induced changes in inpatient TKA case mix.

RESULTS

We observed an immediate shift of roughly 15% of Medicare TKA cases to the outpatient setting. Importantly, there was a simultaneous near doubling of the number of TKAs performed as a hospital outpatient procedure among privately insured patients younger than 60 years. Hospitals allocated a similar proportion of TKA cases to the outpatient setting across the 2 payer groups, and we found evidence of selection against the potentially riskiest Medicare TKA patients for outpatient delivery. Vertically integrated orthopedic physicians retained their Medicare and privately insured TKA cases within the inpatient (higher-cost) setting.

CONCLUSIONS

Market and financial pressures are encouraging more outpatient care delivery; however, the speed of transition is dictated, in part, by regulatory constraints. Our results suggest that Medicare policy may influence surgical treatment approaches for Medicare and privately insured patients. Spillover implications need to be considered when weighing future Medicare regulatory decisions.

The persistence of medicare advantage spillovers in the post-Affordable Care Act era

Spillovers can arise in markets with multiple purchasers relying on shared producers. Prior studies have found such spillovers in health care, from managed care to nonmanaged care populations-reducing spending and utilization, and improving outcomes, including in Medicare. This study provides the first plausibly causal estimates of such spillovers from Medicare Advantage (MA) to Traditional Medicare (TM) in the post-Affordable Care Act era using an instrumental variables approach. Controlling for health status and other potential confounders, we estimate that a one percentage point increase in county-level MA penetration results in a $64 (95% CI: $18 to $110) (0.7%) reduction in standardized per-enrollee TM spending. We find evidence for reductions in utilization both on the intensive and extensive margins, across a number of health care services. Our results complement and extend prior work that found spillovers from MA to TM in earlier years and under different payment policies than are in place today.

Assessment of Racial Disparities in Primary Care Physician Specialty Referrals

IMPORTANCE

Disparities in quality of care according to patient race and socioeconomic status persist in the US. Differential referral patterns to specialist physicians might be associated with observed disparities.

OBJECTIVE

To examine whether differences exist between Black and White Medicare beneficiaries in the observed patterns of patient sharing between primary care physicians (PCPs) and physicians in the 6 specialties to which patients were most frequently referred.

DESIGN, SETTING, AND PARTICIPANTS

This cross-sectional observational study of Black and White Medicare beneficiaries used claims data from 2009 to 2010 on 100% of traditional Medicare beneficiaries who were seen by PCPs and selected high-volume specialists in 12 health care markets with at least 10% of the population being Black. Statistical analyses were conducted from December 20, 2017, to September 30, 2020.

EXPOSURES

Differences in patterns of patient sharing among Black and White patients.

MAIN OUTCOMES AND MEASURES

Primary care physician and specialist degree (the number of other PCPs or specialists to whom each physician is connected) and strength (the number of shared patients per connection, overall, for Black patients and White patients and after equalizing the numbers of Black and White patients per PCP), as well as distance between PCP and patient and specialist zip code centroids.

RESULTS

The 12 selected markets ranged in size from Manhattan, New York (187 054 Black or White beneficiaries seen by at least 2 physicians within an episode of care; 9794 total physicians), to Tallahassee, Florida (44 644 Black or White beneficiaries seen by at least 2 physicians within an episode of care; 847 total physicians). The percentage of Black beneficiaries ranged from 11.5% (Huntsville, Alabama) to 46.8% (Chicago, Illinois). The mean PCP-specialist degree (number of specialists with whom a PCP shares patients) was lower for Black patients than for White patients. For instance, the mean PCP-cardiologist degree across all markets for White patients was 17.5 compared with 8.8 for Black patients. After sampling White patients to equalize the numbers of patients seen, the degree differences narrowed but were still not equivalent in many markets (eg, for all specialties in Baton Rouge, Louisiana: 4.5 for Black patients vs 5.7 for White patients). Specialist networks among White patients were much larger than those constructed based just on Black patients (eg, for cardiology across all markets: 135 for Black patients vs 330 for White patients), even after equalizing the numbers of patients seen per PCP (123 for Black patients vs 211 for White patients). The overall test for differences in referral patterns was statistically significant for all 6 specialties examined in 7 of the 12 markets and in 5 specialties for another 3.

CONCLUSIONS AND RELEVANCE

This study suggests that differences exist in specialist referral patterns by race among Medicare beneficiaries. This is an observational study, and thus some differences might have resulted from patient-initiated visits to specialists.

A decade of experience for high-needs beneficiaries under Medicare Advantage

OBJECTIVE

To describe the association between longitudinal enrollment in Medicare Advantage (MA) and utilization, access, quality of care, and health outcomes for beneficiaries with complex health needs.

DATA SOURCES/STUDY SETTING

Beneficiary characteristics, enrollment, and outcomes data from the 2004-2016 waves of the Health and Retirement Study (HRS).

STUDY DESIGN

Using the HRS panel structure, we identified beneficiaries consistently reporting high needs as well as enrollment in MA versus traditional Medicare (TM). We first evaluated a robust set of beneficiary characteristics to identify those that distinguish beneficiaries who consistently enrolled in MA versus TM. We then described adjusted differences in outcomes between high-needs beneficiaries who consistently enrolled in MA versus TM.

PRINCIPAL FINDINGS

Among high-needs beneficiaries, there was a modest amount of favorable selection into MA based on health. Controlling for several characteristics, MA enrollees used less care (with a 6.6 percentage point (pp) lower probability of hospitalization, 4.7 fewer physician visits, and a 5.1 pp lower probability of using home health care), had a 4.1 pp greater probability of being unable to afford their care, and had a 5.7 pp lower probability of reporting that they were very satisfied with their care. Compared to associations between MA and outcomes for high-needs beneficiaries, for non-high-needs beneficiaries MA enrollment was associated with smaller decreases in utilization and no statistically significant difference in the inability to afford care.

CONCLUSIONS

Our descriptive findings raise the possibility that high-needs beneficiaries may experience unique challenges in MA compared to their non-high-needs counterparts.

Treatment flows after outsourcing public insurance provision: Evidence from Florida Medicaid

While politics can determine what public goods are available, elected officials must decide on the method of allocation. Commonly, governments provide public health insurance directly or pay private parties to administer it on their behalf. Such contracting can leverage private sector expertise but also raises agency concerns. In particular, little is known about how private provision of public health insurance impacts medical decision-making and treatment flows for low-income populations. An example comes from the Medicaid program, which has increasingly relied on outside insurers to deliver health services to enrollees. We exploit a large legislative intervention in Florida to show that Medicaid managed care (MMC) organizations generally do not skimp on short-run treatment delivery in the inpatient setting. In fact, patients with severe and chronic illnesses receive more inpatient services under these contracts, especially in relation to managing care transitions. We also document increased competition in the MMC market following the state's policy intervention.

Costs and Outcomes of Medicare Advantage and Traditional Medicare Beneficiaries After Total Hip and Knee Arthroplasty

INTRODUCTION

Medicare Advantage (MA) has increased popularity among eligible participants by providing additional benefits from a private insurer, but these plans are omitted from several government cost savings programs, including bundled payment models. The purpose of this study was to determine whether 90-day episode-of-care (EOC) costs and outcomes were different for patients with MA plans undergoing total joint arthroplasty compared with traditional Medicare patients.

METHODS

We reviewed claims data for a consecutive series of patients undergoing primary total hip and knee arthroplasty from 2015 to 2018 at our institution with traditional Medicare coverage or MA through a single private insurer. Demographics, comorbidities, 90-day costs, readmissions, complications, and discharge disposition were compared between the groups. A multivariate regression analysis was performed to determine the independent effect of insurance status on EOC costs and outcomes.

RESULTS

Of the 10,869 patients in the study, 1,076 (9.9%) were covered under an MA plan. MA patients were more likely to be discharged to a rehabilitation facility (19% versus 14%, P < 0.0001). No significant differences were observed in length of stay (1.88 versus 1.88 days, P = 0.1439), complications (3.9% versus 3.5%, P = 0.4554), or readmissions (5.9% versus 4.9%, P = 0.1893). EOC costs were significantly higher for the MA group ($21,347 versus $19,551, P < 0.0001).

DISCUSSION

Patients with MA have higher total EOC costs than traditional Medicare beneficiaries with comparable short-term outcomes after total hip and knee arthroplasty. Further study is needed to determine whether alternative payment models in MA patients can improve care and reduce costs.

Do Medicare Advantage Rebates Reduce Enrollees' Out-of-Pocket Spending?

The majority of Medicare Advantage (MA) plans receive payments that exceed their costs of providing basic Medicare benefits. There is controversy about whether these payments are passed on to the enrollees as supplemental benefits or are retained by plans. We used survey data on MA beneficiaries' actual out-of-pocket (OOP) spending linked to MA payment information to test whether higher plan payments and rebates lowered enrollee OOP spending. We used instrumental variables regression models to address concerns that plan payments and rebates may reflect anticipation of enrollees with particular health-spending profiles. We found that beneficiaries recovered only $0.65 of every $1.00 in payments exceeding fee-for-service spending through lower OOP spending but more than fully recovered the value of the rebates supporting supplemental benefits.

Primary Care Physician Networks In Medicare Advantage

Medicare Advantage (MA) plans often establish restrictive networks of covered providers. Some policy makers have raised concerns that networks may have become excessively restrictive over time, potentially interfering with patients' access to providers. Because of data limitations, little is known about the breadth of MA networks. Taking a novel approach, we used Medicare Part D claims data for 2011-15 to examine how primary care physician networks have changed over time and what demographic and plan characteristics are associated with varying levels of network breadth. Our findings indicate that the share of MA plans with broad networks increased from 80.1 percent in 2011 to 82.5 percent in 2015. Enrollment in broad-network plans grew from 54.1 percent to 64.9 percent over the same period. In an adjusted analysis, we detected no significant time trend. In addition, narrow networks were associated with urbanicity, higher income, higher physician density, and more competition among plans. Health maintenance organizations had narrower networks than did point-of-service plans, whose networks were narrower than those of preferred provider organizations.

Randomized trial shows healthcare payment reform has equal-sized spillover effects on patients not targeted by reform

Changes in the way health insurers pay healthcare providers may not only directly affect the insurer's patients but may also affect patients covered by other insurers. We provide evidence of such spillovers in the context of a nationwide Medicare bundled payment reform that was implemented in some areas of the country but not in others, via random assignment. We estimate that the payment reform-which targeted traditional Medicare patients-had effects of similar magnitude on the healthcare experience of nontargeted, privately insured Medicare Advantage patients. We discuss the implications of these findings for estimates of the impact of healthcare payment reforms and more generally for the design of healthcare policy.

Effect of a Medicaid Accountable Care Collaborative on 30-Day Hospital Readmission Rates

Hospital readmission within 30 days is undesirable and costly. Most programs and studies have focused on the Medicare population and readmission prevention through discharge planning; less is understood about how Medicaid might reduce readmissions to improve outcomes and control program costs. The objective of this study was to estimate the relationship between the Colorado Medicaid Accountable Care Collaborative (ACC) and 30-day hospital readmission rates. A difference-in-differences design was used to compare 30-day readmissions before and after Medicaid members were enrolled in the ACC program using 2 different control groups: Medicaid members not enrolled and commercially insured. The authors used Probit regressions at the hospital level, controlling for patient characteristics, and clustered errors at the provider level. The study sample included Colorado adults ages 19-64 with qualifying hospital discharge. Analysis data included Medicaid and commercial payer administrative claims data (2009-2015) from Colorado's All-Payer Claims Database. The ACC program significantly reduced 30-day readmissions among Colorado Medicaid patients. Participation in the ACC program reduced the probability of a 30-day readmission by 1.4% (P < 0.001), with the largest effect among maternity and delivery patients. Because the majority of Medicaid members are female, even after Medicaid expansion, and Medicaid covers a disproportionate share of complex births, maternity and delivery readmissions are a fruitful area for reducing Medicaid expenditures. To reduce readmissions, Medicaid programs will need to develop interventions specific to their populations.

Regional Variation in Rates of Total Knee Arthroplasty Among Medicare Beneficiaries

IMPORTANCE

Rates of total knee arthroplasty vary widely across the United States. Whether this variation is associated with differences in patient characteristics or physician practice is unknown.

OBJECTIVES

To determine regional variations in rates of total knee arthroplasty after accounting for the prevalence of knee arthritis and other potentially associated patient risk factors and to assess the correlation of these variations with measures of access to care and surgical indications.

DESIGN, SETTING, AND PARTICIPANTS

This retrospective national cohort study used Medicare data on more than 24 million deidentified beneficiaries annually from 2011 to 2015. Individuals included had fee-for-service coverage, were 65 to 89 years of age, and resided in 1 of 306 health referral regions. Data were analyzed from September 13, 2018, to August 15, 2019.

MAIN OUTCOMES AND MEASURES

Rate of primary total knee arthroplasty indexed to the national rate using observed to expected ratios. The expected numbers of arthroplasty procedures were derived from estimates based on beneficiaries' demographic and clinical characteristics. Observed to expected ratios were confounded by race/ethnicity; thus race/ethnicity-stratified analyses were conducted.

RESULTS

In 2011, there were 218 282 total knee arthroplasty procedures among 24 583 706 white Medicare beneficiaries (mean [SD] age 74.2 [6.9] years; 54.6% women). The rate of arthroplasty during the study period (5 years) was 9.3 per 1000 person-years. Adjustment for clinical characteristics reduced the spread in observed to expected ratios among regions by 29% compared with adjustment for age and sex alone. However, substantial variation remained, with observed to expected ratios that ranged from 0.61 in Newark, New Jersey, to 1.82 in Idaho Falls, Idaho. High ratios were primarily present in the upper Midwest, Great Plains, and Mountain West regions. Higher ratios were associated with regions where beneficiaries had fewer outpatient visits (Spearman correlation [r], -0.64; 95% CI, -0.70 to -0.56) and with regions having more surgeons per capita who performed knee arthroplasty (r = 0.27; 95% CI, 0.16-0.37). Higher ratios were associated with higher rates of arthroplasty procedures among beneficiaries with dementia (r = 0.36; 95% CI, 0.25-0.46), peripheral vascular disease (r = 0.52; 95% CI, 0.42-0.61), and skin ulcers (r = 0.43; 95% CI, 0.32-0.53), which are relative contraindications to arthroplasty.

CONCLUSIONS AND RELEVANCE

Substantial regional variation in rates of total knee arthroplasty remained after adjustment for patient characteristics. Coexistence of high observed to expected ratios and high rates among patients at greater surgical risk suggested overuse of knee arthroplasty in some regions.

Upcoding: Evidence from Medicare on Squishy Risk Adjustment

In most US health insurance markets, plans face strong incentives to "upcode" the patient diagnoses they report to the regulator, as these affect the risk-adjusted payments plans receive. We show that enrollees in private Medicare plans generate 6% to 16% higher diagnosis-based risk scores than they would under fee-for-service Medicare, where diagnoses do not affect most provider payments. Our estimates imply that upcoding generates billions in excess public spending and significant distortions to firm and consumer behavior. We show that coding intensity increases with vertical integration, suggesting a principal-agent problem faced by insurers, who desire more intense coding from the providers with whom they contract.

Upcoding: Evidence from Medicare on Squishy Risk Adjustment

In most US health insurance markets, plans face strong incentives to "upcode" the patient diagnoses they report to the regulator, as these affect the risk-adjusted payments plans receive. We show that enrollees in private Medicare plans generate 6% to 16% higher diagnosis-based risk scores than they would under fee-for-service Medicare, where diagnoses do not affect most provider payments. Our estimates imply that upcoding generates billions in excess public spending and significant distortions to firm and consumer behavior. We show that coding intensity increases with vertical integration, suggesting a principal-agent problem faced by insurers, who desire more intense coding from the providers with whom they contract.

Association of Mandatory Bundled Payments for Joint Replacement With Use of Postacute Care Among Medicare Advantage Enrollees

Importance

In 2016, the Centers for Medicare & Medicaid Services introduced mandatory bundled payments for knee and hip replacement surgical procedures among traditional Medicare (TM) patients in randomly selected areas. The association of bundled payments with outcomes among patients enrolled in Medicare Advantage (MA) is not known.

Objective

To determine the association of bundled payments for joint replacement surgical procedures with the use of postacute care (PAC) services among MA patients.

Design, Setting, and Participants

This cohort study used difference-in-differences analysis to evaluate changes in PAC use among patients enrolled in Medicare who underwent joint replacement operations before and after the introduction of bundled payments (ie, from January 1, 2013, to September 30, 2017). A total of 75 metropolitan statistical areas were randomized to participate in the bundled payment program, with 121 areas serving as controls. Data were analyzed between September 15, 2018, and October 1, 2019.

Exposure

Bundled payments for hip and knee joint replacement operations, in which hospitals received a single payment to cover all costs associated with a joint replacement and associated care for the 90 days after surgery.

Main Outcomes and Measures

The primary outcomes were discharge to any institutional PAC setting and days spent in institutional PAC within 90 days after surgery. Secondary outcomes included discharge and days spent in specific PAC settings (ie, home health, skilled nursing facility, inpatient rehabilitation).

Results

Of 1 536 387 individuals who underwent hip and knee join replacement surgery, 493 977 (32.2%) were enrolled in MA (mean [SD] age, 73.3 [8.4] years; 386 699 [63.5%] women; 55 078 [6.4%] black) and 1 042 410 (67.8%) were enrolled in TM (mean [SD] age, 73.3 [8.7] years, 829 014 [65.2%] women; 82 890 [9.4%] black). Among MA patients, bundled payments were associated with a reduction of 1.5 (95% CI, 1.0-2.0) percentage points in discharge to an institutional PAC setting (P < .001) and an estimated reduction of 0.3 (95% CI, 0.2-0.5) days spent in an institutional PAC setting (P < .001), a 5.6% relative reduction. Among TM patients, bundled payments were associated with a reduction of 2.6 (95% CI, 2.2-2.9) percentage points in institutional PAC discharge (P < .001) and a reduction of 0.8 (95% CI, 0.7-0.9) days spent in an institutional PAC setting (P < .001), a 2.5% relative reduction. These changes were larger in hospitals with greater proportions of TM patients. In hospitals with low concentrations of MA patients, time spent in institutional PAC settings decreased by 0.9 days among TM patients and 0.8 days among MA patients; in hospitals with high MA concentrations, time spent in institutional PAC settings decreased by 0.6 days for TM patients and 0.2 days for MA patients.

Conclusions and Relevance

In this study, the first 18 months of the Centers for Medicare & Medicaid Services bundled payment program for joint replacement surgery were associated with reductions in the use of institutional PAC among MA patients. Past evaluations of bundled payments that focused on TM patients may not have measured the full consequences of this alternative payment model.

Characteristics of Physicians Participating in Medicare's Oncology Care Model Bundled Payment Program

PURPOSE

The Oncology Care Model (OCM) is Medicare's first bundled payment program for patients with cancer. We examined baseline characteristics of OCM physician participants and markets with high OCM physician participation to inform generalizability and complement the ongoing practice-level evaluation of the OCM.

METHODS

In this cross-sectional study, we identified characteristics of US medical oncologists practicing in 2016, using a national telephone-verified physician database. We linked these data with Dartmouth Atlas and Medicare claims data from 2011 through 2016 to identify characteristics of markets with high OCM participation. We used logistic regression to examine relationships between market characteristics and OCM participation.

RESULTS

Of 10,428 US medical oncologists, 2,605 (24.9%) were listed in an OCM practice. There were no differences in sex or medical training between OCM participants and nonparticipants, although OCM participants were slightly younger. OCM participants practiced in larger (median daily patient volume, 80 v 55 patients) and urban practices (95.2% v 90.7%) and were less likely to be part of a health system (41.0% v 60.4%) or solo practice (45.5% v 67.4%; all P < .001). Participation was higher in southern and mid-Atlantic markets. Markets with high OCM physician participation had higher specialist density, hospital care intensity, and acute care use at the end of life (all P < .001). Market-level penetration of Accountable Care Organizations (adjusted odds ratio, 4.65; 95% CI 3.31 to 6.56; P < .001) and Medicare Advantage (adjusted odds ratio 2.82; 95% CI, 1.97 to 4.06; P < .001) were associated with higher OCM participation.

CONCLUSION

In the first description of oncologists participating in the OCM, we found differences in practice demographics, care intensity, and exposure to nontraditional payment models between OCM-participating and nonparticipating physicians. Such provider-level differences may not be captured in Medicare's practice-level analysis.

Physician Participation in Medicare Accountable Care Organizations and Spillovers in Commercial Spending

IMPORTANCE

The benefits of public payment policy may extend to private populations through "spillover" effects. If cost-saving efforts in Medicare also reduce costs among commercially insured patients, Medicare payment systems could be a versatile policy tool in future reform efforts.

OBJECTIVES

To determine whether physicians who participated in a Medicare Accountable Care Organization (ACO) reduced spending among their commercial patients.

DESIGN

This was a retrospective, longitudinal study which was conducted using Blue Cross Blue Shield of Michigan (BCBSM) claims data from 2010 to 2015. We compared patients seen by physicians who participated in a Medicare ACO to patients whose physicians were not part of an ACO. We used a difference-in-differences (DIDs) design to test whether physician participation in an ACO was associated with reduced spending among their commercially insured patients. We also tested for heterogeneous effects: we assessed whether spillovers were larger among patients with clinical conditions (acute myocardial infarction, pneumonia, congestive heart failure) that have previously been targeted by Medicare payment programs.

SETTING

This was a population-based study of commercially insured patients in Michigan.

PARTICIPANTS

Patients who experienced a significant clinical episode (eg, labor and delivery, acute myocardial infarction) between 2010 and 2015.

EXPOSURE

Our patient-level exposure is treatment by a Medicare ACO-affiliated physician.

MAIN OUTCOMES AND MEASURES

Medical spending of 0-90 days and 91-365 days after a clinical episode.

RESULTS

Patients in the exposure group (n=54,750) and in the control group (n=137,883) were similar in demographic characteristics of age, sex, and type of clinical episodes. Adjusted mean 90-day spending in the preexposure period was $21,292 among the exposure group and $21,157 among the comparison group; these means declined to $21,250 and $20,995 in the postperiod, yielding a DIDs estimate of $119 [95% confidence interval (CI), -$170 to $408]. Adjusted means for 91-365 days spending in the preperiod were $4258 among the exposure group and $4251 among the comparison group; these means rose to $4338 and $4421 in the postperiod, yielding a DIDs estimate of -$90 (95% CI, -$312 to $132). We also separately examined patients with conditions that have been targeted by other Medicare payment programs. Among these patients, 90-day spending did not differ between exposure and comparison groups (DIDs, -$223; 95% CI, -$2037 to $1591), although 91-365 days spending decreased among the exposure group with marginal statistical significance (DIDs, -$1160; 95% CI, -$2459 to $140).

CONCLUSIONS AND RELEVANCE

Physicians who participated in Medicare ACOs did not reduce spending among most of their commercially insured patients. Medicare policy is unlikely to confer significant spillover benefits to the commercially insured population.

Analysis of Drivers of Disenrollment and Plan Switching Among Medicare Advantage Beneficiaries

IMPORTANCE

How often enrollees with complex care needs leave the Medicare Advantage (MA) program and what might drive their decisions remain unknown.

OBJECTIVE

To characterize trends in switching to and from MA among high-need beneficiaries and to evaluate the drivers of disenrollment decisions.

DESIGN, SETTING, AND PARTICIPANTS

This cross-sectional study of MA and traditional Medicare (TM) enrollees from January 1, 2014, through December 31, 2015, used a multinomial logit regression stratified by Medicare-Medicaid eligibility status. All 14 589 645 non-high-need MA enrollees and 1 302 470 high-need enrollees in the United States who survived until the end of 2014 were eligible for the analysis. Data were analyzed from November 1, 2017, through August 1, 2018.

EXPOSURES

Enrollee dual eligibility and high-need status (based on complex chronic conditions, multiple morbidities, use of health care services, functional impairment, and frailty indicators), MA plan star rating, and cost sharing.

MAIN OUTCOMES AND MEASURES

The proportion of enrollees who disenrolled into TM, remained in the same MA plan, or who switched plans within the MA program.

RESULTS

A total of 13 901 816 enrollees were included in the analysis (56.2% women; mean [SD] age, 70.9 [9.9] years). Among the 1 302 470 high-need enrollees, an adjusted 4.6% (95% CI, 4.5%-4.6%) of Medicare-only and 14.8% (95% CI, 14.5%-15.0%) of Medicare-Medicaid members switched from MA to TM compared with 3.3% (95% CI, 3.3%-3.3%) and 4.6% (95% CI, 4.5%-4.7%), respectively, among non-high-need enrollees. Among enrollees in low-quality plans, 23.0% (95% CI, 22.3%-23.9%) of Medicare and 42.8% (95% CI, 40.5%-45.1%) of dual-eligible high-need enrollees left MA. Even in high-quality plans, high-need members disenrolled at higher rates than non-high-need members (4.9% [95% CI, 4.6%-5.2%] vs 1.8% [95% CI, 1.8%-1.9%] for Medicare-only enrollees and 11.3% vs 2.4% dual eligible enrollees). Enrollment in a 5.0-star rated plan was associated with a 30.1-percentage point reduction (95% CI, -31.7 to -28.4 percentage points) in the probability of disenrollment among high-need individuals. A $100 increase in monthly premiums was associated with a 33.9-percentage point increase (95% CI, -34.9 to -33.0 percentage points) in the likelihood of switching plans, and a small reduction in the likelihood of disenrolling (-2.7 percentage points; 95% CI, -3.2 to -2.2 percentage points). Among Medicare-Medicaid eligible participants, 14.1% (95% CI, 14.0%-14.2%) of high-need and 16.7% (95% CI, 16.6%-16.7%) of non-high-need enrollees switched from TM to MA.

CONCLUSIONS AND RELEVANCE

Results of this study suggest that substantially higher disenrollment from MA plans occurs among high-need and Medicare-Medicaid eligible enrollees. This study's findings suggest that star ratings have the strongest association with disenrollment trends, whereas increases in monthly premiums are associated with greater likelihood of switching plans.

Can Insurance Market Competition Coexist With Provider Price Regulation? Evidence From Medicare Advantage

Proposals to contain health care costs often draw from 1 of 2 primary policy approaches-price regulation or market competition. These approaches are often viewed as in conflict, even though some health economists have long argued that they may be compatible, and desirable, given the unique characteristics of health care markets. Medicare Advantage (MA) markets provide a real-world example supporting the view that provider price regulation and insurance market competition can be complementary.

Exnovation of Low Value Care: A Decade of Prostate-Specific Antigen Screening Practices

OBJECTIVES

To examine prostate-specific antigen (PSA) screening practice change in subgroups of men defined in guidelines and in various regions and to identify factors associated with change in screening practices.

DESIGN

Observational study using serial cross-sections, 2003 to 2013.

SETTING

National fee-for-service Medicare.

PARTICIPANTS

Men aged 68 and older eligible for prostate cancer screening.

MEASUREMENTS

National PSA screening practices in men aged 68 and older from 2003 to 2013 and change in regional screening rates in men aged 75 and older.

RESULTS

The PSA screening rate in men aged 68 and older was 17.2% in 2003, 22.3% in 2008, and 18.6% in 2013 (p < .001 for all differences); rates ended slightly lower than rates in 2003 only in men 80 and older. Racial disparities in screening became less pronounced over this period. In men aged 75 and older, change in regional screening rates varied widely, with absolute rates growing by 15 per 100 enrollees in some areas and declining by the same amount in others. Areas with high social capital, a measure associated with diffusion of new ideas, were more likely to decline; malpractice intensity and managed care penetration had no effect.

CONCLUSION

Studying Medicare enrollees over time, we found little reduction in PSA screening and even increases according to race and in some regions. The heterogeneous changes across regions suggest that consistent reduction in the use of low-value care may require change strategies that go beyond evidence and guidelines to include monitoring and feedback on performance. J Am Geriatr Soc 67:29-36, 2019.

Understanding Trends in Medicare Spending, 2007-2014

OBJECTIVES

To analyze the sources of per-beneficiary Medicare spending growth between 2007 and 2014, including the role of demographic characteristics, attributes of Medicare coverage, and chronic conditions.

DATA SOURCES

Individual-level Medicare spending and enrollment data.

STUDY DESIGN

Using an Oaxaca-Blinder decomposition model, we analyzed whether changes in price-standardized, per-beneficiary Medicare Part A and B spending reflected changes in the composition of the Medicare population or changes in relative spending levels per person.

DATA EXTRACTION METHODS

We identified a 5 percent sample of fee-for-service Medicare beneficiaries age 65 and above from years 2007 to 2014.

RESULTS

Mean payment-adjusted Medicare per-beneficiary spending decreased by $180 between the 2007-2010 and 2011-2014 time periods. This decline was almost entirely attributable to lower spending levels for beneficiaries. Notably, declines in marginal spending levels for beneficiaries with chronic conditions were associated with a $175 reduction in per-beneficiary spending. The decline was partially offset by the increasing prevalence of certain chronic diseases. Still, we are unable to attribute a large share of the decline in spending levels to observable beneficiary characteristics or chronic conditions.

CONCLUSIONS

Declines in spending levels for Medicare beneficiaries with chronic conditions suggest that changing patterns of care use may be moderating spending growth.

Effects of Early Dual-Eligible Special Needs Plans on Health Expenditure

OBJECTIVE

To examine the effects of the penetration of dual-eligible special needs plans (D-SNPs) on health care spending.

DATA SOURCES/STUDY SETTING

Secondary state-level panel data from Medicare-Medicaid Linked Enrollee Analytic Data Source (MMLEADS) public use file and Special Needs Plan Comprehensive Reports, Area Health Resource Files, and Medicaid Managed Care Enrollment Report between 2007 and 2011.

STUDY DESIGN

A difference-in-difference strategy that adjusts for dual-eligibles' demographic and socioeconomic characteristics, state health resources, beneficiaries' health risk factors, Medicare/Medicaid enrollment, and state- and year-fixed effects.

DATA COLLECTION/EXTRACTION METHODS

Data from MMLEADS were summarized from Centers for Medicare and Medicaid Services (CMS)'s Chronic Conditions Data Warehouse, which contains 100 percent of Medicare enrollment data, claims for beneficiaries who are enrolled in the fee-for-service (FFS) program, and Medicaid Analytic Extract files. The MMLEADS public use file also includes payment information for managed care. Data in Special Needs Plan Comprehensive Reports were from CMS's Health Plan Management System.

PRINCIPAL FINDINGS

Results indicate that D-SNPs penetration was associated with reduced Medicare spending per dual-eligible beneficiary. Specifically, a 1 percent increase in D-SNPs penetration was associated with 0.2 percent reduction in Medicare spending per beneficiary. We found no association between D-SNPs penetration and Medicaid or total spending.

CONCLUSION

Involving Medicaid services in D-SNPs may be crucial to improve coordination between Medicare and Medicaid programs and control Medicaid spending among dual-eligible beneficiaries. Starting from 2013, D-SNPs were mandated to have contracts with state Medicaid agencies. This change may introduce new effects of D-SNPs on health care spending. More research is needed to examine the impact of D-SNPs on dual-eligible spending.

Changes In Hospital Utilization Three Years Into Maryland's Global Budget Program For Rural Hospitals

In a substantial shift in payment policy, the State of Maryland implemented a global budget program for acute care hospitals in 2010. Goals of the program include controlling hospital use and spending. Eight rural hospitals entered the program in 2010, while urban and suburban hospitals joined in 2014. Prior analyses, which focused on urban and suburban hospitals, did not find consistent evidence that Maryland's program had contributed to changes in hospital use after two years. However, these studies were limited by short follow-up periods, may have failed to isolate impacts of Maryland's payment change from other state trends, and had limited generalizability to rural settings. To understand the effects of Maryland's global budget program on rural hospitals, we compared changes in hospital use among Medicare beneficiaries served by affected rural hospitals versus an in-state control population from before to after 2010. By 2013-three years after the rural program began-there were no differential changes in acute hospital use or price-standardized hospital spending among beneficiaries served by the affected hospitals, versus the within-state control group. Our results suggest that among Medicare beneficiaries, global budgets in rural Maryland hospitals did not reduce hospital use or price-standardized spending as policy makers had anticipated.