Defining the 90-Day Cost Structure of Lower Extremity Revascularization for Alternative Payment Model Assessment

Abstract

The Quality Payment Program is driving Medicare reimbursement to a value-based payment model. The practice of vascular surgery will face significant challenges as a result. The Society for Vascular Surgery Alternative Payment Model task force was formed to explore opportunities to develop a Physician Focused Payment Model that will allow vascular surgeons to continue to deliver the complex care of peripheral artery disease (PAD). Medicare beneficiaries undergoing qualifying index procedures during fiscal year 2016 through the third quarter of 2017 were selected for financial analysis. Index procedures were defined using Healthcare Common Procedure Coding System procedure codes that represent open and endovascular PAD interventions and stratified to inpatient, outpatient, and office based. Inpatient index procedures were included if the procedure code mapped to one of three diagnosis-related group (DRG) families consistent with PAD conditions: other vascular procedures (252-254), aortic and heart assist procedures (268, 269), and other major vascular procedures (270-272). Patients undergoing outpatient or office-based procedures were included on the basis of Healthcare Common Procedure Coding System procedure codes. Emergent procedures, end-stage renal disease patients, perioperative deaths, and patients undergoing interventions in the preceding 30 days were excluded. Analysis captured post-acute care services (PACSs) and 90-day postdischarge events (PDEs). PACSs included rehabilitation, skilled nursing facility, and home health services. PDEs included emergency department visits, observation stays, inpatient readmissions, and reinterventions. There were 123,180 cases that met inclusion criteria; 82% of cases were performed in the outpatient setting. Inpatient index procedures had a higher cost than outpatient and office-based index procedures. The average cost per index case for DRGs 252 to 254 was $18,755; DRGs 268 and 269, $34,600; and DRGs 270 to 272, $25,245. Average cost was $11,458 for outpatient index procedures and $11,533 for office-based index procedures. PACSs were more commonly used after inpatient index procedures. Percentage use of PACSs and average cost were 58.6% and $5338 for DRGs 252 to 254, 57.2% and $4192 for DRGs 268 and 269, and 55.9% and $5275 for DRGs 270 to 272. Outpatient index procedures required PACSs in 13.7% of cases (average cost, $1352), whereas office-based procedures required PACSs in 15% of cases (average cost, $1467). The 90-day PDEs were frequent across all sites of service (range, 38.9% 50.2%) and carried significant cost. Readmission was associated with the highest PDE average expenditure (range, $13,950-$18.934). The average readmission cost exceeded that of the index procedures performed in the outpatient settings (Tables I and II). Cost comparisons in PAD interventions should extend beyond the index procedures. Despite analysis challenges related to the breadth of vascular procedures and site of service variability, the data uncover potential cost-saving opportunities in the management of PDEs. Because of the vulnerability of the population of PAD patients, alternative payment modeling using a bundled value-based approach will require reallocation of resources to focus on longitudinal patient care extending beyond the initial intervention.Table ITotal postdischarge event (PDE) rates by event windowsGroup descriptionTotal No. of index cases1-30 days, %1-60 days, %1-90 days, %Inpatient other vascular procedures17,40530.442.450.2Inpatient aortic and heart assist procedures97723.733.238.9Inpatient other major vascular procedures429530.240.948.2Outpatient facility procedures63,57229.642.049.2Office-based procedures36,93125.336.443.3 Open table in a new tab Table IIPostdischarge adverse outcome average allowed payment across index cases with the eventEvent window: 1-90 days after dischargeED visits$172$173$197$160$175Readmissions$18,934$13,950$17,982$16,315$16,932Observations$192$197$204$213$203Outpatient facility procedures$4221$3164$5274$8061$4628Office-based procedures$759$340$838$730$7190ED, Emergency department. Open table in a new tab