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

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

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

Objective To determine the cost of wound care and prevalence of chronic wounds for Medicare beneficiaries in the aggregate, by wound type, and by setting between the years 2014 and 2019. Methods This retrospective analysis of Medicare claims data included beneficiaries who experienced episodes of care for diabetic foot ulcers and infections; arterial ulcers; skin disorders and infections; surgical wounds and infections; traumatic wounds; venous ulcers and infections; unspecified chronic ulcers; and others. The 2014 data were based on a Medicare 5% Limited Data Set whereas for 2019 the data used were for all fee-for-service Medicare beneficiaries. Three methods were used to generate expenditure estimates: (a) a low (Medicare provider payments when the wound was a primary diagnosis, excluding any kind of deductible); (b) mid (primary plus secondary diagnosis with weighted attribution); and (c) high (primary or secondary diagnosis). The main outcomes were the prevalence of each wound type, Medicare expenditure for each wound type and aggregate, and expenditure by type of service. Results Over the 5-year period the number of Medicare beneficiaries with a wound increased from 8.2 million to 10.5 million. Wound prevalence increased by 13% from 14.5% to 16.4%. Over the 5-year period, the Medicare beneficiaries with the largest increase in chronic wound prevalence were those aged <65 years (males: 12.5% to 16.3%; females: 13.4% to 17.5%). The largest changes in terms of wound prevalence were increases in arterial ulcers (0.4% to 0.8%), skin disorders (2.6% to 5.3%), and decreases in traumatic wounds (2.7% to 1.6%). Expenditures decreased regardless of the three methods used with a reduction of $29.7 billion to $22.5 billion for the most conservative method. Except for venous ulcers in which costs per Medicare beneficiary increased from $1206 to $1803, cost per wound decreased with surgical wounds remaining the most expensive to treat (2014: $3566; 2019: $2504), and the largest decrease for arterial ulcers ($9651 to $1322). Hospital outpatient fees saw the largest reduction ($10.5 billion to $2.5 billion) although home health agency expenditures decreased from $1.6 billion to $1.1 billion. Physician offices saw an increase from $3.0 billion to $4.1 billion and durable medical equipment increased from $0.3 billion to $0.7 billion. Conclusions It appears that chronic wound care expenditures have shifted to the physician's office from the hospital-based outpatient department. Given that the prevalence of chronic wounds is increasing, especially among the disabled under 65, it will be important to know whether these shifts have positively or negatively affected outcomes.

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

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

OBJECTIVE: The aim of this study was to determine the cost of chronic wound care for Medicare beneficiaries in aggregate, by wound type and by setting. METHODS: This retrospective analysis of the Medicare 5% Limited Data Set for calendar year 2014 included beneficiaries who experienced episodes of care for one or more of the following: arterial ulcers, chronic ulcers, diabetic foot ulcers, diabetic infections, pressure ulcers, skin disorders, skin infections, surgical wounds, surgical infections, traumatic wounds, venous ulcers, or venous infections. The main outcomes were the prevalence of each wound type, Medicare expenditure for each wound type and aggregate, and expenditure by type of service. RESULTS: Nearly 15% of Medicare beneficiaries (8.2 million) had at least one type of wound or infection (not pneumonia). Surgical infections were the largest prevalence category (4.0%), followed by diabetic infections (3.4%). Total Medicare spending estimates for all wound types ranged from $28.1 to $96.8 billion. Including infection costs, the most expensive estimates were for surgical wounds ($11.7, $13.1, and $38.3 billion), followed by diabetic foot ulcers ($6.2, $6.9, and $18.7 billion,). The highest cost estimates in regard to site of service were for hospital outpatients ($9.9-$35.8 billion), followed by hospital inpatients ($5.0-$24.3 billion). CONCLUSIONS: Medicare expenditures related to wound care are far greater than previously recognized, with care occurring largely in outpatient settings. The data could be used to develop more appropriate quality measures and reimbursement models, which are needed for better health outcomes and smarter spending for this growing population. Copyright (c) 2018 International Society for Pharmacoeconomics and Outcomes Research (ISPOR). Published by Elsevier Inc. All rights reserved

ABSTRACT Background There are few studies of the economic value of orthotic and prosthetic services. A prior cohort study of orthotic and prosthetic Medicare beneficiaries based on Medicare Parts A and B claims from 2007–2010 concluded that patients who received timely orthotic or prosthetic care had comparable or lower total health care costs than a comparison group of untreated patients. This follow-up study reports on a parallel analysis based on Medicare claims from 2011–2014 and includes Part D in addition to Parts A and B services and expenditures. Its purpose is to validate earlier findings on the extent to which Medicare patients who received select orthotic and prosthetic services had less health care utilization, lower Medicare payments, and potentially fewer negative outcomes compared to matched patients not receiving these services. Methods This is a retrospective cohort analysis of 78,707 matched pairs of Medicare beneficiaries with clinical need for orthotic and prosthetic services (N = 157,414) using 2011–2014 Medicare claims data. It uses propensity score matching techniques to control for observable selection bias. Economically, a cost-consequence evaluation over a four-year time horizon was performed. Results Patients who received lower extremity orthotics had 18-month episode costs that were $1,939 lower than comparable patients who did not receive orthotic treatment ($22,734 vs $24,673). Patients who received spinal orthotic treatment had 18-month episode costs that were $2,094 lower than comparable non-treated patients ($23,560 vs $25,655). Study group beneficiaries receiving both types of orthotics had significantly lower Part D spending than those not receiving treatment (p<0.05). Patients who received lower extremity prostheses had comparable 15-month episode payments to matched beneficiaries not receiving prostheses ($68,877 vs $68,893) despite the relatively high cost of the prosthesis. Conclusions These results were consistent with those found in the prior study and suggest that orthotic and prosthetic services provide value to the Medicare program and to the patient.

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

INTRODUCTION:This study evaluated differences in: 1) total episode payments, 2) probability of hospital readmission, 3) probability of inpatient rehab facility (IRF) and utilization, and 4) probability of skilled nursing care facility (SNF) utilization in patients who had disuse atrophy and underwent a total knee arthroplasty (TKA) and either did, or did not, receive preoperative home-based neuromuscular electrical stimulation (NMES) therapy.MATERIALS AND METHODS:We used the Medicare limited dataset for a 5% sample of beneficiaries from 2014 and 2015 to construct episodes-of-care for TKA (DRG-470) patients with disuse atrophy who underwent a TKA during the 30 days prior to hospital admission and 90 days post-discharge. Patients were stratified into those who either did or did not receive pre- and postoperative NMES therapy. An ordinary least square (OLS) model was used to estimate the impact of NMES on total episode. Linear probability models were used to estimate the impact of NMES on SNF or IRF utilization and readmission.RESULTS:A $3,274 reduction in episode payments for patients who used preoperative NMES versus those who did not (p<0.001) was demonstrated. The probability of readmission was 12.7% lower for those who used preoperative NMES therapy versus those who did not (p=0.609). The probability of utilizing IRF and SNF was 56.7% (p=0.061) and 46.4% (p=<0.001) lower for those who used pre- and postoperative NMES versus those who did not, respectively.CONCLUSION:Significant reduction in total episode payments and SNF utilization for TKA patients with disuse atrophy who had NMES therapy was demonstrated.

Introduction Advances in dialysis vascular access (DVA) management have changed where beneficiaries receive this care. The effectiveness, safety, quality, and economy of different care settings have been questioned. This study compares patient outcomes of receiving DVA services in the freestanding office-based center (FOC) to those of the hospital outpatient department (HOPD). It also examines whether outcomes differ for a centrally managed system of FOCs (CMFOC) compared to all other FOCs (AOFOC). Methods Retrospective cohort study of clinically and demographically similar patients within Medicare claims available through United States Renal Data System (USRDS) (2010-2013) who received at least 80% of DVA services in an FOC (n = 80,831) or HOPD (n = 133,965). Separately, FOC population is divided into CMFOC (n = 20,802) and AOFOC (n = 80,267). Propensity matching was used to control for clinical, demographic, and functional characteristics across populations. Results FOC patients experienced significantly better outcomes, including lower annual mortality (14.6% vs. 17.2%, p<0.001) and DVA-related infections (0.16 vs. 0.20, p<0.001), fewer hospitalizations (1.65 vs. 1.91, p<0.001), and lower total per-member-per-month (PMPM) payments ($5042 vs. $5361, p<0.001) than HOPD patients. CMFOC patients had lower annual mortality (12.5% vs. 13.8%, p<0.001), PMPM payments (DVA services) ($1486 vs. $1533, p<0.001) and hospitalizations ($1752 vs. $1816, p<0.001) than AOFOC patients. Conclusions Where nephrologists send patients for DVA services can impact patient clinical and economic outcomes. This research confirmed that patients who received DVA care in the FOC had better outcomes than those treated in the HOPD. The organizational culture and clinical oversight of the CMFOC may result in more favorable outcomes than receiving care in AOFOC.

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

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

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

Dialysis vascular access (DVA) care is being increasingly provided in freestanding office‐based centers (FOC). Small‐scale studies have suggested that DVA care in a FOC results in favorable patient outcomes and lower costs. To further evaluate this issue, data were drawn from incident and prevalent ESRD patients within a 4‐year sample (2006‐2009) of Medicare claims (USRDS) on cases who receive at least 80% of their DVA care in a FOC or a hospital outpatient department (HOPD).

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

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

The complex nature of cancer and symptom management is no secret to oncologists and their support staff members. Cancer patients need extensive support services, which are not often required in other physician practices. Precise measures of these services and the associated cost is lacking.

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