Maryland’s Global Budget Revenue Payment Model and Shifts in the Surgical Site of Care Among Medicare Beneficiaries

Abstract

Objective: To assess the association between the Global Budget Revenue (GBR) payment model and shifts to the outpatient setting for surgical procedures among Medicare fee-for-service beneficiaries in Maryland versus control states. Summary Background Data: The GBR model provides fixed global payments to hospitals to reduce spending growth and incentivize hospitals to reduce the costs of care while improving care quality. Since surgical care is a major contributor to hospital spending, the GBR model might accelerate the ongoing shift from the inpatient to the outpatient setting to generate additional savings. Methods: A difference-in-differences (DiD) design was used to compare changes in surgical care settings over time from pre-GBR (2011-2013) to post-GBR (2014-2018) for Maryland versus control states for common surgeries that could be performed in the outpatient setting. A cross-sectional approach was used to compare the difference in care settings in 2018 for total knee arthroplasty which was on Medicare’s Inpatient-Only List before then. Results: We studied 47,542 surgical procedures from 44,410 beneficiaries in Maryland and control states. GBR’s 2014 implementation was associated with an acceleration in the shift from inpatient to outpatient settings for surgical procedures in Maryland (DiD: 3.9 percentage points, 95% CI: 2.3, 5.4). Among patients undergoing total knee arthroplasty in 2018, the proportion of outpatient surgeries in Maryland was substantially higher than that in control states (difference: 27.6 percentage points, 95% CI: 25.6, 29.6). Conclusions: Implementing Maryland’s GBR payment model was associated with an acceleration in the shift from inpatient to outpatient hospital settings for surgical procedures.