Reduce Medicare Spending Research Articles

Medicare Advantage Health Risk Assessments Contribute Up To $12 Billion Per Year To Risk-Adjusted Payments.

With Medicare Advantage (MA) enrollment surpassing 50percent of Medicare beneficiaries, accurate risk-adjusted plan payment rates are essential. However, artificially exaggerated coding intensity, where plans seek to enhance measured health risk through the addition or inflation of diagnoses, may threaten payment rate integrity. One factor that may play a role in escalating coding intensity is health risk assessments (HRAs)-typically in-home reviews of enrollees' health status-that enable plans to capture information about their enrollees. In this study, we evaluated the impact of HRAs on Hierarchical Condition Categories (HCC) risk scores, variation in this impact across contracts, and the aggregate payment impact of HRAs, using 2019 MA encounter data. We found that 44.4percent of MA beneficiaries had at least one HRA. Among those with at least one HRA, HCC scores increased by 12.8percent, on average, as a result of HRAs. More than one in five enrollees had at least one additional HRA-captured diagnosis, which raised their HCC score. Potential scenarios restricting the risk-score impact of HRAs correspond with $4.5-$12.3billion in reduced Medicare spending in 2020. Addressing increased coding intensity due to HRAs will improve the value of Medicare spending and ensure appropriate payment in the MA program.

Do urgent care centers reduce Medicare spending?

We ask how urgent care centers (UCCs) impact healthcare costs and utilization among nearby Medicare beneficiaries. When residents of a zip code are first served by a UCC, total Medicare spending rises while mortality remains flat. In the sixth year after entry, 4.2% of the Medicare beneficiaries in a zip code that is served use a UCC, and the average per-capita annual Medicare spending in the zip code increases by $268, implying an incremental spending increase of $6,335 for each new UCC user. UCC entry is also associated with a significant increase in hospital stays and increased hospital spending accounts for half of the total increase in annual spending. These results raise the possibility that, on balance, UCCs increase costs by steering patients to hospitals.

Paying for Nursing Home Quality: An Elusive But Important Goal.

Paying for Nursing Home Quality: An Elusive But Important Goal.

Impact of the Oncology Care Model on Use of Supportive Care Medications During Cancer Treatment.

The Oncology Care Model (OCM) is an episode-based alternative payment model for cancer care that seeks to reduce Medicare spending while maintaining care quality. We evaluated the impact of OCM on appropriate use of supportive care medications during cancer treatment. We evaluated chemotherapy episodes assigned to OCM (n = 201) and comparison practices (n = 534) using Medicare claims (2013-2019). We assessed denosumab use for beneficiaries with bone metastases from breast, lung, or prostate cancer; prophylactic WBC growth factor use for beneficiaries receiving chemotherapy for breast, lung, or colorectal cancer; and prophylactic use of neurokinin-1 (NK1) antagonists and long-acting serotonin antagonists for beneficiaries receiving chemotherapy for any cancer type. Analyses used a difference-in-difference approach. After its launch in 2016, OCM led to a relative reduction in the use of denosumab for beneficiaries with bone metastases receiving bone-modifying medications (eg, 5.0 percentage point relative reduction in breast cancer episodes [90% CI, -7.1 to -2.8]). There was no OCM impact on use of prophylactic WBC growth factors during chemotherapy with high or low risk for febrile neutropenia. Among beneficiaries receiving chemotherapy with intermediate febrile neutropenia risk, OCM led to a 7.6 percentage point reduction in the use of prophylactic WBC growth factors during breast cancer episodes (90% CI, -12.6 to -2.7); there was no OCM impact in lung or colorectal cancer episodes. Among beneficiaries receiving chemotherapy with high or moderate emetic risk, OCM led to reductions in the prophylactic use of NK1 antagonists and long-acting serotonin antagonists (eg, 6.0 percentage point reduction in the use of NK1 antagonists during high emetic risk chemotherapy [90% CI, -9.0 to -3.1]). OCM led to the reduced use of some high-cost supportive care medications, suggesting more value-conscious care.

Balancing Efficiency and Access: Discouraging Emergency Department Boarding in a Global Budget System.

Reducing cost without sacrificing quality of patient care is an important yet challenging goal for healthcare professionals and policymakers alike. This challenge is at the forefront in the United States, where per capita healthcare costs are much higher than in similar countries around the world. The state of Maryland is unique in the hospital financing landscape due to its “capitation” payment system (also known as “global budget”), in which revenue for hospital-based services is set at the beginning of the year. Although Maryland’s system has yielded many benefits, including reduced Medicare spending, it also has had unintentional adverse consequences. These consequences, such as increased emergency department boarding and ambulance diversion, constrain Maryland hospitals’ ability to fulfill their role as emergency care providers and act as a safety net for vulnerable patient populations. In this article, we suggest policy remedies to mitigate the unintended consequences of Maryland’s model that should also prove instructive for a variety of emerging alternative payment mechanisms.

Challenging Assumptions of Outcomes and Costs Comparing Peritoneal and Hemodialysis

ObjectivesPolicy makers have suggested increasing peritoneal dialysis (PD) would improve end-stage kidney disease (ESKD) outcomes and reduce Medicare spending compared with hemodialysis (HD). We compared mortality, hospitalizations, and Medicare spending between PD and HD among uninsured adults with incident ESKD. MethodsUsing an instrumental variable design, we exploited a natural experiment encouraging PD among the uninsured. Uninsured patients usually receive Medicare at dialysis month 4. For those initiating PD, Medicare covers the first 3 dialysis months, including predialysis services in the calendar month when dialysis started. Starting dialysis later in a calendar month increases predialysis coverage that is essential for PD catheter placements. The policy encourages PD incrementally when ESKD develops later in the month. Dialysis start day appears to be unrelated to patient characteristics and effectively “randomizes patients” to dialysis modality, mitigating selection bias. ResultsStarting dialysis later in the month was associated with an increased PD uptake: every week later in the month was associated with an absolute increase of 0.8% (95% confidence interval [CI] 0.6%-0.9%) at dialysis day 1 and 0.5% (95% CI 0.3%-0.7%) at dialysis month 12. We observed no significant absolute difference between PD and HD for 12-month mortality (−0.9%, 95% CI −3.3% to 0.8%), hospitalizations during months 7 to 12 (−0.05, 95% CI −0.20 to 0.07), and Medicare spending during months 7 to 12 (−$702, 95% CI −$4004 to $2909). ConclusionsIn an instrumental variable analysis, PD did not result in improved outcomes or lower costs than HD.

Social Isolation of Older Adults in Long Term Care as a Result of COVID-19 Mitigation Measures During the COVID-19 Pandemic

Social Isolation of Older Adults in Long Term Care as a Result of COVID-19 Mitigation Measures During the COVID-19 Pandemic

Evidence for the Effectiveness of Health and Social Services Partnerships

Integration of health and social services is touted as a key method to address social needs and improve population health. We will share the latest evidence on how Area Agency on Aging (AAA) partnerships with health care entities and other organizations improve health outcomes for older adults, while reducing health care costs. AAAs are community leaders in cross-sectoral partnerships that effectively address social determinants of health for older adults, who account for a substantial share of overall health care spending. Results of a longitudinal study (2008 – 2016) which links data from four waves of the National Surveys of AAAs to data on county-level health outcomes show that AAA–health care partnerships and programs reduced health care utilization and costs. AAA partnerships with hospitals reduced Medicare spending by $136 per beneficiary. AAA involvement in evidence-based health promotion programs decreased potentially avoidable nursing home use by nearly one percentage point (representing a change of 6.5%). Finally, we will describe the prevalence and nature of contracting relationships between community-based organizations and health care entities, based on data from the 2020 CBOs and Health Care Contracting Request for Information, the third national RFI of AAAs, Centers for Independent Living, and other aging and disability community-based organizations.

Is It Time for Precision Dialysis?

In 2015, President Obama announced funding for precision medicine to augment personalized medicine, which has been described as “the right treatment for the right patient in the right place at the right time.” Patients with ESKD experience high symptom burden and mortality, necessitating more

Factors Associated with Reduced Medicare Spending in the Accountable Care Organization (ACO) Investment Model

Research ObjectiveThe ACO Investment Model (AIM) was designed to encourage providers in rural or underserved areas to participate in the Medicare Shared Savings Program (SSP) by providing up‐front financial support for care transformation. In the second performance year, there were 41 ACOs that continued participation in AIM, with 423,434 beneficiaries assigned them. Our research objective was to determine whether the significant reductions in total Medicare spending we found in the first performance year were sustained in the second year, and whether specific ACO or market characteristics were associated with spending in both performance years.Study DesignWe utilized a difference‐in‐differences evaluation design to estimate differences in total spending between Medicare fee‐for‐service (FFS) beneficiaries attributed to AIM ACOs and comparison beneficiaries, before versus after the start of AIM. The comparison group included beneficiaries residing in each AIM ACO’s market who were eligible but not attributed to an ACO. Regression and weighting were used to adjust for demographic characteristics and health status. We stratified first and second performance year results based on ACO and market characteristics, including whether an ACO used a management company; partnered with a hospital; had fewer than 6,500 enrolled beneficiaries; was in the top quartile of rurality among AIM markets; had a discontinuous market; or had total Medicare spending at baseline that was above the median among all AIM markets.Population StudiedMedicare FFS beneficiaries attributed to ACOs in AIM, which targeted ACO formation in rural/underserved areas in 2016 and 2017.Principal FindingsAcross all 41 AIM ACOs, we estimated a significant reduction in total spending of $36.94 per beneficiary per month (PBPM) in the second performance year—a reduction of 3.5% and similar to findings from the first performance year. There were no significant differences in AIM impacts based on any of our six stratifications, but results across the two performance years suggest that greater reductions were achieved by ACOs working with a management company.ConclusionsACOs participating in AIM sustained reductions in total Medicare spending across the first two performance years and across diverse ACO and market characteristics.Implications for Policy or PracticeResults from the second performance year strengthen the evidence that ACOs can help reduce Medicare spending in rural or underserved areas. Among AIM markets, variations in market‐level baseline spending, market dispersion, and high rurality were not barriers to achieving spending reductions. ACOs locating in rural or underserved areas may benefit through partnership with a management company.Primary Funding SourceCenters for Medicare and Medicaid Services.

4508 Contextual Predictors of Hospitalization and Quality of Life Among Patients on Hemodialysis

OBJECTIVES/GOALS: People engaging in high-risk substance use or experiencing food insecurity or housing instability are at increased risk to develop end-stage kidney disease. This study will examine associations between these risk factors, patient indicators of socioeconomic position, and hospitalization rates and quality of life after initiation of hemodialysis. METHODS/STUDY POPULATION: The proposed study will leverage a prospective cohort design. We will enroll a convenience sample of 330 participants from the same large dialysis organization. Participants will complete measures of socioeconomic position (age, gender, race, ethnicity, education, income, occupation and community poverty); substance use; food insecurity; housing instability; and quality of life at baseline. We will follow participants for 6 months and extract hospitalization counts from the dialysis facility medical record. RESULTS/ANTICIPATED RESULTS: We will generate risk scores (low, medium, high) from measures of substance use, food insecurity and housing instability. We will conduct multiple logistic regression to generate odds ratios comparing risk group membership by indicators of socioeconomic position. We anticipate that low or medium-risk groups will differ from high risk groups by indicators of socioeconomic position. We will conduct Poisson regression to generate incidence rate ratios for 6-month hospitalization rates comparing low or medium-risk and high-risk groups. Lastly, we will conduct multiple linear regression to generate beta coefficients for changes in quality of life scores comparing low or medium-risk and high-risk groups. We anticipate that high-risk groups will have higher hospitalization rates and lower quality of life scores. DISCUSSION/SIGNIFICANCE OF IMPACT: As the prevalence of end-stage kidney disease continues to increase, there is a need for tertiary prevention interventions that reduce costly inpatient utilization and improve health-related quality of life. The proposed study will lay groundwork for the development of interventions to improve patient outcomes and reduce Medicare spending.

County-Level Concentration of Selected Chronic Conditions Among Medicare Fee-for-Service Beneficiaries and Its Association with Medicare Spending in the United States, 2017.

Multiple chronic conditions (MCC) reduce quality of life and are associated with high per capita health care spending. One potential way to reduce Medicare spending for MCC is to identify counties whose populations have high levels of spending compared to level of disease burden. Using a nationally representative sample of Medicare Fee-for-Service beneficiaries, this paper presents a method to measure the collective burden of several chronic conditions in a population, which the authors have termed the concentration of chronic conditions (CCC). The authors observed a significantly positive linear relationship between the CCC measure and county-level per capita Medicare spending. This area-level measure can be operationalized to identify counties that might benefit from targeted efforts designed to optimally manage and prevent chronic illness.

Value of Nutrition Support Therapy: Impact on Clinical and Economic Outcomes in the United States

Healthcare leaders seek guidance on prudent investment in programs that improve patient outcomes and reduce costs, which includes the value of nutrition therapy. The purpose of this project was to conduct an evidence review and evaluate claims analyses to understand the financial and quality impact of nutrition support therapy on high-priority therapeutic conditions. Task 1 included a review of existing literature from 2013 to 2018 to identify evidence that demonstrated the clinical and economic impact of nutrition intervention on patient outcomes across 13 therapeutic areas (TAs). In Task 2, analytic claims modeling was performed using the Medicare Parts A and B claims 5% sample dataset. Beneficiaries diagnosed in 5 selected TAs (sepsis, gastrointestinal [GI] cancer, hospital-acquired infections, surgical complications, and pancreatitis) were identified in the studies from Task 1, and their care costs were modeled based on nutrition intervention. Beginning with 1099 identified articles, 43 articles met the criteria, with a final 8 articles used for the Medicare claims modeling. As examples of the modeling demonstrated, the use of advanced enteral nutrition formula could save at least $52 million annually in a sepsis population. The total projected annual cost savings from the 5 TAs was $580 million. Overall, optimization of nutrition support therapy for specific patient populations is estimated to reduce Medicare spending by millions of dollars per year across key TAs. These findings demonstrate the evidence-based value proposition of timely nutrition support to improve clinical outcomes and yield substantial cost savings.

Can we keep patients home? Decreasing hospitalizations in the oral chemotherapy patient.

294 Background: The Oncology Care Model (OCM) pilot includes all types of cancer with an aim to test whether additional funding for enhanced services and financial incentives to improve quality and efficiency, could reduce Medicare spending while maintaining or improving quality for a broad array of cancer types. Patients taking oral chemotherapy are included in the OCM. Often these patients require hospitalization due to side effects,decreased access and ability to communicate with providers. Limited documented strategies exist showing how to decrease hospitalizations in patients with cancer. The aim of this study was to decrease the hospitalization rate of oral chemotherapy patients at five sites by improving access to care and communication via establishment of phone triage nursing management. Methods: The aim of this project was to reduce hospitalizations for oral chemotherapy patients being treated at home over an eight month period. The Model for Improvement served as the research framework and design for this improvement project. The model includes identifying, defining and diagnosing a problem, before developing solutions and implementing interventions that are anticipated to solve the identified issues. Plan, Do, Study, Act (PDSA) cycles were utilized to develop and test changes in support of the oral chemotherapy patients. Five clinical sites affiliated with a community oncology practice in Texas collaborated with a Patient Support Service (PSS) nursing call center. Results: Implementing the PSS center resulted in a lowered number of monthly hospitalizations over eight months in patients receiving outpatient oral chemotherapy as compared to monthly volume of hospitalizations over eight months before implementation while demonstrating positive patient satisfaction with the oral regimen. Conclusions: This quality initiative found that OCM patients receiving oral chemotherapy can be supported to remain in their homes while decreasing unnecessary hospitalizations through the establishment of a PSS center. Through support systems for out-patient oncology patients, outcomes can be improved, unnecessary hospitalizations decreased, patient satisfaction sustained, and overall cost of care reduced.

Early Impact of Medicare Accountable Care Organizations on Inpatient Surgical Spending.

To evaluate whether hospital participation in accountable care organizations (ACOs) is associated with reduced Medicare spending for inpatient surgery. ACOs have proliferated rapidly and now cover more than 32 million Americans. Medicare Shared Savings Program (MSSP) ACOs have shown modest success in reducing medical spending. Whether they have reduced surgical spending remains unknown. We used 100% Medicare claims from 2010 to 2014 for patients aged 65 to 99 years undergoing 6 common elective surgical procedures [abdominal aortic aneurysm (AAA) repair, colectomy, coronary artery bypass grafting (CABG), hip or knee replacement, or lung resection]. We compared total Medicare payments for 30-day surgical episodes, payments for individual components of care (index hospitalization, readmissions, physician services, and postacute care), and clinical outcomes for patients treated at MSSP ACO hospitals versus matched controls at non-ACO hospitals. We accounted for preexisting trends independent of ACO participation using a difference-in-differences approach. Among 341,675 patients at 427 ACO hospitals and 1,024,090 matched controls at 1531 non-ACO hospitals, patient and hospital characteristics were well-balanced. Average baseline payments were similar at ACO versus non-ACO hospitals. ACO participation was not associated with reductions in total Medicare payments [difference-in-differences estimate=-$72, confidence interval (CI95%): -$228 to +$84] or individual components of payments. ACO participation was also not associated with clinical outcomes. Duration of ACO participation did not affect our estimates. Although Medicare ACOs have had success reducing spending for medical care, they have not had similar success with surgical spending. Given that surgical care accounts for 30% of total health care costs, ACOs and policymakers must pay greater attention to reducing surgical expenditures.

Cost-Benefit Analysis of Hearing Care Services: What Is It Worth to Medicare?

Hearing care services for older adults with hearing aids are underutilized and are not covered by the Medicare program. Little information exists to the value of hearing care services for older adults with hearing aids. The objective of this analysis is to estimate the potential costs and benefits to the Medicare program of covering hearing care services. Cross-sectional analysis using propensity score matching methods to create balanced and comparable groups. We conducted a 1:1 match of older Medicare beneficiaries with hearing aids who self-reported use of hearing care services in the previous 12 months to those with hearing aids who did not use hearing care services. Groups were balanced on demographic and socioeconomic characteristics as well as health status, functional impairment, and trouble hearing. We compared average total Medicare spending per person between matched groups, as well as by service type. Nationally representative survey of Medicare beneficiaries in the United States (Medicare Current Beneficiary Survey) 2013. Study participants were limited to those in the survey who reported using hearing aids in 2013 (n = 1120). Average annual Medicare spending was $8196 (95% confidence interval [CI] = $6670-$9723) among Medicare beneficiaries who used hearing care services and $10,709 (95% CI = $8878-$12,541) among matched controls who did not use hearing care services. Total spending per person was $2513 (95% CI = $150-$4876) higher among those who did not use hearing care services, with spending differences driven mostly by higher-skilled nursing facility (difference = $825; 95% CI = $193-$1455) and home health (difference = $287; 95% CI = $7-$568) spending among matched controls. Utilization of hearing care services among older adults with hearing aids is associated with reduced Medicare spending. Increasing access to hearing care services among Medicare beneficiaries with hearing aids may provide value to the healthcare system and net savings to the Medicare program. J Am Geriatr Soc 67:784-789, 2019.

Patient-Centered Medical Homes in Community Oncology Practices: Changes in Spending and Care Quality Associated With the COME HOME Experience

We examined whether the Community Oncology Medical Home (COME HOME) program, a medical home program implemented in seven community oncology practices, was associated with changes in spending and care quality. We compared outcomes from elderly fee-for-service Medicare beneficiaries diagnosed between 2011 and 2015 with breast, lung, colorectal, thyroid, or pancreatic cancer, lymphoma, or melanoma and served by COME HOME practices before and after program implementation versus similar beneficiaries served by other geographically proximate oncologists. Difference-in-differences analysis compared changes in outcomes for COME HOME patients versus concurrent controls. Propensity score matching and regression methods were adjusted for clinical and sociodemographic differences. Our primary outcome was 6-month medical spending per beneficiary. Secondary outcomes included 6-month out-of-pocket spending, inpatient and ambulatory care-sensitive hospitalizations, readmissions, length of stay, and emergency department and evaluation and management visits. Before COME HOME, 6-month medical spending was $2,975 higher for the study group compared with controls (95% CI, $1,635 to $4,315; P < .001) and increasing at a similar rate. After intervention, this difference was reduced to $318 (95% CI, -$1,105 to $1,741; P = .661), a significant change of -$2,657 (95% CI, -$4,631 to -$683; P = .008) or 8.1% savings relative to 6-month average spending ($32,866). COME HOME was also associated with significantly reduced (10.2 %) emergency department visits per 1,000 patients per 6-month period ( P = .024). There were no statistically significant differences in other outcomes. COME HOME was associated with reduced Medicare spending and improved emergency department use. The patient-centered medical home model holds promise for oncology practices, but improvements were not uniform.

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

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

The Effects of State Medicaid Expansions for Working-Age Adults on Senior Medicare Beneficiaries

Do Medicaid expansions to working-age adults affect healthcare spending and utilization among older Medicare beneficiaries? Although economic theory provides conflicting predictions about the presence and direction of such spillover effects, it does identify circumstances when spillovers can reduce Medicare spending. Using data on Medicaid expansions during the 2000s and microdata from the Medicare Current Beneficiary Survey, we find that a 1 percentage point rise in the share of working-age adults eligible for Medicaid has modest effects on the average Medicare beneficiary's spending, but reduces average spending by $477 among dual eligibles. Importantly, we find no evidence of adverse health effects. (JEL G22, H75, I12, I13, I18, I38, J14)

Reducing Medicare Spending Through Electronic Health Information Exchange: The Role of Incentives and Exchange Maturity

Health information exchanges (HIEs) are entities that have emerged in healthcare delivery markets across the United States. By providing an interorganizational information system (IOIS) and governance over use of this system and the information exchanged through it, HIEs enable more routine and efficient electronic sharing of patient information between disparate and fragmented healthcare providers. This should result in improved quality and efficiency of care. However, significant questions persist about the extent to which HIEs produce these benefits in practice, particularly in terms of reducing healthcare spending. We use transaction cost economics (TCE) to theorize that HIEs establish a quasi-hierarchy that decreases frictions associated with information sharing in ways that reduce healthcare spending, and that the magnitude of reductions is greater when (1) insurer and provider incentives align, and (2) HIE capabilities mature. We can test these conjectures because HIEs, unlike other efforts that provide IOIS, are typically confined to regional markets and develop heterogeneously between these markets, introducing variation in insurer-provider incentive alignment and HIE maturity. Leveraging a unique national panel data set, we evaluate whether HIEs reduce spending for the largest insurer in the United States, i.e., Medicare, and whether incentives and HIE maturity modify the magnitude of reductions. We find significant spending reductions in healthcare markets that have established operational HIEs, with an average reduction of $139 per Medicare beneficiary per year (1.4% decrease) or a $3.12 billion annual reduction in spending if HIEs were nationally implemented in 2015. We also find that these reductions occur disproportionately in healthcare markets where providers have financial incentives to use an HIE to reduce spending and when HIEs are more mature. Our results inform an important open empirical question in the healthcare domain related to the value of HIEs, while also joining perspectives from TCE with the IOIS literature to understand the factors that may be relevant to IOIS value creation more generally.