Melinda Beeuwkes Buntin

Risk adjustment and Medicare: taking a closer look

Melinda Buntin et al. — Sun, 19 May 2013 18:24:51 PDT

Medicare's method for reimbursing at-risk managed care plans causes potential problems with selection (when beneficiaries with higher-than-expected costs stay in traditional plans) and stinting (the tendency to underprovide health services). Adjusting payment by diagnosis offers substantial improvement. We favor large-scale demonstrations of diagnosis-based reimbursement. Reducing payment, a Clinton administration proposal, would recoup excess payments in the short run but not address the selection problem, which could reemerge. Selection makes current payments vulnerable to upward spirals. We propose not using traditional Medicare to update reimbursement. Basing some payment on enrollees' actual use addresses selection and stinting. Rather than reinsurance, we propose blending traditional Medicare and risk-adjusted capitation. Ceding some cases to traditional Medicare in advance appears to be useful for terminally ill patients.

Carve outs: definition, experience, and choice among candidate conditions.

Melinda Buntin et al. — Sun, 19 May 2013 18:19:11 PDT

Despite increasing discussion of carve outs as a device for controlling costs and improving quality of care, little systematic information exists on the effects of carve outs on cost, quality, and access to healthcare services. In the absence of such information, a conceptual framework is useful for deciding which conditions and populations may benefit from carve-out strategies, and how such arrangements should be designed. After carefully defining carve outs, and distinguishing them from other similar arrangements, this paper identifies five characteristics of a healthcare condition that increase the likelihood that a carve out's benefits will outweigh its drawbacks. The paper also examines the advantages and disadvantages of alternative approaches to structuring and administering carve-out arrangements, including how to pay for services, how to integrate them with mainstream care, provisions for consumer choice and provisions for carve-out accountability. The piece concludes that population carve outs, in which all the healthcare problems of a group of patients are managed by the carve-out organization, have inherent advantages, and identifies candidate conditions for population carve outs.

Paying Medicare Managed Care Plans

Melinda Buntin et al. — Sun, 19 May 2013 18:14:43 PDT

The Prevalence of Formal Risk Adjustment in Health Plan Purchasing

Melinda Buntin et al. — Sun, 19 May 2013 18:12:02 PDT

This paper describes the prevalence of formal risk adjustment of payments made to health plans by Medicare, Medicaid, state governments, and private payers. In this paper, “formal risk adjustment” is defined as the adjustment of premiums paid to health plans based on individual-level diagnostic or demographic information. We find that formal risk adjustment is used for about one-fifth of all enrollees in capitated health plans. While the Medicare and Medicaid programs rely on formal risk adjustment for virtually all their health plan enrollees, the practice is used for only about 1% of privately insured health plan enrollees. Our findings raise the question of why regulators have adopted formal risk adjustment, but private purchasers for the most part have not.

Analyses for the Initial Implementation of the Inpatient Rehabilitation Facility Prospective Payment System

Melinda Buntin et al. — Sun, 19 May 2013 18:00:47 PDT

In the Balanced Budget Act of 1997, Congress mandated that Health Care Financing Administration (HCFA) implement a Prospective Payment System (PPS) for inpatient rehabilitation. The Centers for Medicare and Medicaid Services (CMS, the successor agency to HCFA) issued the final rule governing such a PPS on August 7, 2001 and the system went into effect on January 1, 2002. This report details the analyses that RAND performed to support HCFA_s efforts to design, develop, and implement the PPS. It describes RAND_s research on new function-related groups, comorbidities, unusual cases, facility-level adjustments, outlier payments, facility-level adjustments, and assessment instruments. In addition, it presents RAND_s recommendations concerning the payment system and discusses the researchers_ plans for further research on the monitoring and refinement of the PPS.

Using Survey Measures to Assess Risk Selection Among Medicare Managed Care Plans

Melinda Buntin et al. — Sun, 19 May 2013 17:34:35 PDT

This paper quantifies risk selection among competing Medicare managed care plans, using beneficiary survey data from the Consumer Assessments of Health Plans Survey®. Selection, measured by variation in plan-level prevalence of health conditions and predicted costs, was substantial. A plan with moderate (one standard deviation) adverse selection would have predicted costs 11.6% above an average plan. Only a small part of this variation was explained by the geographical differences in the prevalence of health conditions among or within Metropolitan Statistical Areas, indicating that the selection was driven by plan attributes. Plans serving members with greater health needs have the potential to establish programs to serve these sick members well, yet this places plans at financial risk. Hence, improved risk adjustment for chronic conditions may be warranted. Moreover, survey measures have the potential to measure the prevalence of such conditions reliably and consistently across plans.

Managed Care: An Industry Snapshot

Melinda Buntin — Sun, 19 May 2013 17:14:20 PDT

Together with the American Association of Health Plans (AAHP), we surveyed health maintenance organizations (HMOs) in 1998 to characterize their basic structure and management strategies. The findings show that more than half of HMO enrollees belong to plans that contract with primary care physician (PCP) groups on a predominantly capitated basis. Such plans tend to be larger and to contract with large physician groups. Thirty percent to 40% of enrollees are in plans that delegate utilization and network management to physician groups paid by capitation, but plans almost never delegate these functions to groups paid by fee-for-service. Plans tend to retain quality assurance functions irrespective of whether they use fee-for-service or capitation as a basis for physician payment. The autonomy of PCPs to order tests and procedures varies with the test and procedure.

Trends And Variability In Individual Insurance Products In California

Melinda Buntin et al. — Sun, 19 May 2013 17:08:04 PDT

This paper examines recent trends in benefits and premiums for individual health insurance products purchased by Californians. There is much variability in the coverage available in the individual insurance market, with correspondingly wide variability in premiums. Despite concerns about increased consumer cost sharing, the average share of health spending covered by these products has remained constant between 1997 and 2002. Whether this trend can continue in the face of higher health costs is unclear.

Increased Medicare Expenditures for Physicians' Services: What Are the Causes?

Melinda Buntin et al. — Sun, 19 May 2013 17:04:26 PDT

In light of rising expenditures for physicians' services and the scheduled decreases in the amounts Medicare pays for such services, we identified the sources of change in the volume and intensity of Medicare physicians' services. We found that the per capita volume and intensity of physicians' services used by Medicare beneficiaries increased more than 30% between 1993 and 1998. Our analyses indicated that, at most, half of this increase was due to measurable changes in the demographic composition, places of residence, prevalence of health conditions, and managed care enrollment of beneficiaries. The other half was due to a general increase in the use of care across beneficiary categories.

Possible Refinements to the Construction of Function-Related Groups for the Inpatient Rehabilitation Facility Prospective Payment System

Melinda Buntin et al. — Sun, 19 May 2013 17:00:06 PDT

In 2002, Medicare implemented a prospective payment system (PPS) for inpatient rehabilitation facilities (IRFs). The PPS works by assigning patients to groups according to how well patients function. These groups, called function-related groups (FRGs), are then used to predict the cost of treating particular Medicare patients according to their ability to function in four general categories: transfers, sphincter control, self-care (e.g., grooming, eating), and locomotion. Patient functioning is measured according to 18 categories of activity-13 motor tasks, such as climbing stairs, and 5 cognitive tasks, such as recall. As part of a contract to monitor how accurately the IRF PPS is predicting treatment costs, the Center for Medicare and Medicaid Services (CMS) asked RAND to examine possible refinements to the FRGs to identify potential improvements in the alignment between Medicare payments and actual hospital costs. Several developments make it likely that significant refinements can be made: a new recording instrument, known as the IRF Patient Assessment Instrument, containing questions that improved the quality of the patient information available to us; more recent data on a larger patient population that describe the entire universe of rehabilitation patients; improvements in the algorithms that produced the initial FRGs, which should improve prediction of treatment costs; and the two years that have passed since the initial FRGs were created, during which changes in the cost structure of IRFs have occurred. Our analysis had two specific objectives: (1) to explore whether the new data enable better prediction of treatment costs and (2) to assess possible refinements to the FRGs based on the new data. To address the first objective, we reexamined assumptions about whether particular indicators that an activity was not observed, or “missing,” indicated a lack of functioning or simply absent data. We also looked at the usefulness of some new indicators in the IRF PAI data for predicting costs. To address the second objective, we also performed two tasks: First, we considered whether alternative indices that included weighting for patient functioning might predict costs more accurately; second, we ran the algorithm used in 1999 to derive FRGs with the new IRF PAI data to see whether the FRGs would look substantially different. Our analysis identified several potential areas of refinement for the payment system, assuming the analysis effects we observed hold up on 2003 data: missing indicators, importance of “function modifiers,” indices and weighting, and refinements to the FRGs. For example, the earlier data assumed that no report about a particular function meant that patients were unable to perform it, an assumption that held true for most activities. However, we found that a lack of data for “transfer to toilet” and “transfer to tub” should be interpreted less strongly than for the other missing indicators. The more-nuanced information about patient functioning provided by “function modifiers,” such as distance walked, adds information to the basic functional independence measurement, or FIM™, category, such as “walking.” By using a motor index that does not equally weight all components, some improvement in explanatory power could be expected. Moreover, using the 2002 data in an algorithm that produced the 1999 FRGs, we found many fewer payment groups across the various conditions.

Identifying and Accommodating Statistical Outliers When Setting Prospective Payment Rates for Inpatient Rehabilitation Facilities

Melinda Buntin — Sun, 19 May 2013 16:56:09 PDT

ObjectiveTo demonstrate how a Bayesian outlier accommodation model identifies and accommodates statistical outlier hospitals when developing facility payment adjustments for Medicare's prospective payment system for inpatient rehabilitation care.

Effects of Payment Changes on Trends in Access to Post-Acute Care

Melinda Buntin et al. — Sun, 19 May 2013 16:53:23 PDT

Medicare has instituted a prospective payment system (PPS) for patients receiving post-acute care (PAC). Prospective payment gives facilities incentives to provide care efficiently, since they can keep any difference between the set payment and their costs. However, this also gives facilities incentives to change their care and practice patterns in other ways and to change their coding practices to increase revenue. This report examines the cumulative effects of PAC payment system changes, specifically, effects on the Home Health Agency Interim Payment System, the Skilled Nursing Facility Prospective Payment System, the Home Health Agency Prospective Payment System, and the Inpatient Rehabilitation Facility Prospective Payment System. Access to care is measured by examining the changes in use of these facilities since implementation of PPS. The study focuses on elderly Medicare patients discharged from acute care facilities, with a diagnosis of hip fracture, stroke, or lower extremity joint replacement. Models are used to predict the probability that patients will go to a PAC location before and after each payment system was enacted. The authors find that the effects of each payment system differed, but they note that, overall, most of the payment system changes that were intended to contain costs had the effect of decreasing the use of the site of care directly affected. But, in many cases, they also had the effect of increasing the use of alternative care sites. These changes do not appear to have affected the severely ill more than others.

Using contingent choice methods to assess consumer preferences about health plan design

Melinda Buntin et al. — Sun, 19 May 2013 16:45:18 PDT

Is the Individual Market More than a Bridge Market? An Analysis of Disenrollment Decisions

Melinda Buntin et al. — Sun, 19 May 2013 14:52:34 PDT

The individual insurance market is perceived by many to provide primarily transition coverage, but there is limited research about how long people stay in this market and what affects their disenrollment decisions. We examine these issues using administrative records and survey data for those enrolled in the individual market in California. We conclude that there is less turnover in this market than is commonly believed. We find that economic factors and coverage characteristics are important in the decision to disenroll, but that perceptions about insurance and the health care system also affect this decision.

Changes in Patient Severity Following Implementation of the Inpatient Rehabilitation Facility Prospective Payment System

Melinda Buntin et al. — Sun, 19 May 2013 14:46:01 PDT

The Medicare program in 2002 instituted an inpatient rehabilitation facility (IRF) prospective payment system (PPS). IRFs are specialized hospitals or hospital units that provide intensive rehabilitation in an inpatient setting. Under the IRF PPS, Medicare pays facilities a predetermined rate per discharged patient, which depends on the patient’s age, impairment, functional status, and comorbidities. Some facilities receive special rates for short-stay transfer patients, high-cost outliers, and patients who die in hospital. Prospective payment gives facilities incentives to provide care efficiently, since they can keep any difference between the set payment and their costs. However, this also gives facilities incentives to change their care and practice patterns in other ways and to change their coding practices to increase revenue. This report examines the effects of the IRF PPS on patient access to care, to determine if access for more severely ill patients is being restricted. The authors test three hypotheses: (1) Fewer patients with conditions costly to treat will be treated, (2) relatively costly cases within case-mix and comorbidity groups will experience reduced access to IRF care, (3) patients with conditions costly to treat will receive less-intense care. They found no evidence to support the first hypothesis and little evidence to support the second. However, the third hypothesis might be supported; the authors observed a decrease in patients’ average length of stay after implementation of IRF PPS, which might indicate that facilities are reducing the intensity of care. But they also note that this could be part of a trend that began before 2002.

Inpatient Rehabilitation Facility Care Use Before and After Implementation of the IRF Prospective Payment System

Melinda Buntin et al. — Sun, 19 May 2013 14:35:21 PDT

The Medicare program in 2002 instituted an inpatient rehabilitation facility (IRF) prospective payment system (PPS). IRFs are specialized hospitals or hospital units that provide intensive rehabilitation in an inpatient setting. Under the IRF PPS, Medicare pays facilities a predetermined rate per discharged patient, which depends on the patient’s age, impairment, functional status, and comorbidities. Some facilities receive special rates for short-stay transfer patients, high-cost outliers, and patients who die in hospital. Prospective payment gives facilities incentives to provide care efficiently, since they can keep any difference between the set payment and their costs. However, this also gives facilities incentives to change their care and practice patterns in other ways and to change their coding practices to increase revenue. For example, some facilities might stint on the amount of care delivered or might change their admission policies to restrict access for patients who might not be profitable to treat. They might also alter their coding practices to increase the payments they receive from Medicare. This report examines changes in the patterns of use within IRFs with respect to utilization, unusual cases, and resource use. Specific findings about changes in length of stay are noted.

Did the Medicare Inpatient Rehabilitation Facility Prospective Payment System Result in Changes in Relative Patient Severity and Relative Resource Use?

Melinda Buntin et al. — Sun, 19 May 2013 14:30:34 PDT

Objective. We sought to examine changes in the composition of Medicare beneficiaries in IRFs by examining the percentages of patients having worse functional or health status than the average for their payment groups (relative severity) and of patients having greater cost or longer length of stay than the average for their payment groups (relative resource use) before versus after IRF PPS; to examine whether observed changes in relative resource use were expected given predicted changes; and to explore whether these effects varied by IRF Medicare volume.

Access to Postacute Rehabilitation

Melinda Buntin — Sun, 19 May 2013 14:23:03 PDT

Each year, more than 10 million Medicare beneficiaries are discharged from acute care hospitals into postacute care (PAC) settings, including inpatient rehabilitation facilities, skilled nursing facilities, and homes with services from home health agencies. These beneficiaries include very frail and vulnerable elders, many of whom have suffered from an acute event such as a stroke or a fall resulting in hip fracture, all of whom are judged unable to return to their homes without further care. Whether beneficiaries receive PAC and the type and intensity of care they receive is influenced not only by clinical factors, but by nonclinical factors including provider supply and financing, especially Medicare’s methods of payment. This article provides a definition of PAC and discusses the wide cross-sectional variation in the use of postacute rehabilitation. It then discusses recent changes to PAC provider payment that have raised concerns about access to postacute rehabilitation, trends in the use of PAC, and what these trends imply about the appropriateness of PAC as it is now delivered. It concludes by identifying issues about the policy and research implications of recent developments and the PAC literature reviewed.

What Is the Right Price of Health Insurance? A Rejoinder

Melinda Buntin et al. — Sun, 19 May 2013 14:19:50 PDT

The Role of Product Design in Consumers' Choices in the Individual Insurance Market

Melinda Buntin et al. — Sun, 19 May 2013 14:15:46 PDT

Objective. To evaluate the role of health plan benefit design and price on consumers' decisions to purchase health insurance in the nongroup market and their choice of plan.

Use of Postacute Care by Nursing Home Residents Hospitalized for Stroke or Hip Fracture: How Prevalent and to What End?

Melinda Buntin et al. — Sun, 19 May 2013 14:10:57 PDT

OBJECTIVES. To examine nursing home (NH) residents' use of Medicare-paid skilled nursing facility (SNF) services and the outcomes of that care and to identify clinical and non-clinical factors associated with that care.

Who Gets Disease Management?

Melinda Buntin et al. — Sun, 19 May 2013 14:05:27 PDT

Objective.To quantify the differences between those who do and do not enroll in DM.

Effects of Payment Changes on Trends in Post-Acute Care

Melinda Buntin et al. — Sun, 19 May 2013 14:00:22 PDT

Objective. To test how the implementation of new Medicare post-acute payment systems affected the use of inpatient rehabilitation facilities (IRFs), skilled nursing facilities (SNFs), and home health agencies.

The Medicare Hospice Payment System: A Consideration of Potential Refinements

Melinda Buntin et al. — Sun, 19 May 2013 13:55:38 PDT

The purpose of this article is to examine variation in resource utilization across and within patient stays in the context of Medicare’s per diem payment system for hospice. Visit-level resource utilization data were linked to patient-level diagnosis and demographics covering more than 68,000 Medicare patients admitted in 2002 and 2003. Our indings suggest that case mix adjustment based on diagnosis and demo graphics does not improve our ability to explain variation in resource utilization across stays. However, we do ind that there is substantial variation in resource utiliza tion within stays that may not be captured in the current per diem payment system.

Health Information Technology: Laying The Infrastructure For National Health Reform

Melinda Buntin et al. — Sun, 19 May 2013 13:32:14 PDT

The enactment of the Patient Protection and Affordable Care Act is a signal achievement on the road to reform, which arguably began with the passage of the American Recovery and Reinvestment Act of 2009. That statute’s Health Information Technology for Economic and Clinical Health (HITECH) provisions created an essential foundation for restructuring health care delivery and for achieving the key goals of improving health care quality; reducing costs; and increasing access through better methods of storing, analyzing, and sharing health information. This article discusses the range of initiatives under HITECH to support health reform, including proposed regulations on “meaningful use” and standards; funding of regional extension centers and Beacon communities; and support for the development and use of clinical registries and linked health outcomes research networks, all of which are critical to carrying out the comparative clinical effectiveness research that will be expanded under health reform.

Medicare Spending and Outcomes After Postacute Care for Stroke and Hip Fracture

Melinda Buntin et al. — Sun, 19 May 2013 13:28:53 PDT

Objective. To assess Medicare payments for and outcomes of patients discharged from acute care to an IRF, a SNF, or home after an inpatient diagnosis of stroke or hip fracture between January 2002 and June 2003.

Beacon Communities Aim To Use Health Information Technology To Transform The Delivery Of Care

Melinda Buntin et al. — Sun, 19 May 2013 12:04:39 PDT

The Beacon Community Program, authorized under the 2009 American Recovery and Reinvestment Act (ARRA), aims to demonstrate the potential for health information technology to enable local improvements in health care quality, cost efficiency, and population health. If successful, these communitywide efforts will yield important lessons that will assist other communities seeking to harness technology to achieve and sustain health care improvements. This paper highlights key programmatic details that reflect the meaningful use of technology in the fifteen Beacon communities. It describes the innovations they propose and provides insight into current and future challenges.

Effects of Competition on the Cost and Quality of Inpatient Rehabilitation Care under Prospective Payment

Melinda Buntin et al. — Sun, 19 May 2013 11:45:24 PDT

Objective. To determine the effect of competition in postacute care (PAC) markets on resource intensity and outcomes of care in inpatient rehabilitation facilities (IRFs) after prospective payment was implemented.

Alternative Measures of Electronic Health Record Adoption among Hospitals

Melinda Buntin et al. — Sun, 19 May 2013 11:40:17 PDT

Objective. To develop measures of the use of electronic health records (EHRs) that accurately reflect the full continuum of hospital adoption and progress toward meaningful use and to understand the intercorrelations and patterns associated with hospital adoption of specific EHR functions.

Using Electronic Prescribing Transaction Data to Estimate Electronic Health Record Adoption - See more at: http://www.ajmc.com/publications/supplement/2010/AJMC_10dec_HIT/AJMC_10HITdecMaxson_eXclu_e320/#sthash.1sZgnsc6.dpuf

Melinda Buntin et al. — Sun, 19 May 2013 11:34:30 PDT

Objective. To determine whether electronic prescribing transaction data can be used to accurately and efficiently track national and regional electronic health record (EHR) adoption in order to evaluate progress toward national goals and identify and address regional disparities.

The Benefits Of Health Information Technology: A Review Of The Recent Literature Shows Predominantly Positive Results

Melinda Buntin et al. — Sun, 19 May 2013 11:23:26 PDT

An unprecedented federal effort is under way to boost the adoption of electronic health records and spur innovation in health care delivery. We reviewed the recent literature on health information technology to determine its effect on outcomes, including quality, efficiency, and provider satisfaction. We found that 92 percent of the recent articles on health information technology reached conclusions that were positive overall. We also found that the benefits of the technology are beginning to emerge in smaller practices and organizations, as well as in large organizations that were early adopters. However, dissatisfaction with electronic health records among some providers remains a problem and a barrier to achieving the potential of health information technology. These realities highlight the need for studies that document the challenging aspects of implementing health information technology more specifically and how these challenges might be addressed.

More Than Four In Five Office-Based Physicians Could Qualify For Federal Electronic Health Record Incentives

Melinda Buntin et al. — Sun, 19 May 2013 11:18:56 PDT

Our analyses of federal survey data show that more than four in five office-based physicians could qualify for new federal incentive payments to encourage the adoption and “meaningful use” of electronic health records, based on the numbers of Medicare or Medicaid patients they see. The incentives are thus likely to accelerate the spread of electronic health records. However, our analyses also indicate that eligibility for the incentives is likely to vary by specialty: 90.6 percent of physicians working in general or family practice or internal medicine could qualify for incentives, but fewer than two-thirds of pediatricians, obstetrician-gynecologists, and psychiatrists may qualify. Eligibility and use will also vary by factors such as size and type of practice; physicians in solo practice are much less likely to use electronic health records than physicians in other practice settings. We suggest actions that policy makers can take to lessen disparities and increase the adoption and meaningful use of electronic health records.

Healthcare Spending and Preventive Care in High-Deductible and Consumer-Directed Health Plans

Melinda Buntin et al. — Sun, 19 May 2013 11:13:29 PDT

Objective. To investigate the effects of highdeductible health plans (HDHPs) and consumerdirected health plans (CDHPs) on healthcare spending and on the use of recommended preventive care - See more at: http://www.ajmc.com/publications/issue/2011/2011-3-vol17-n3/AJMC_11mar_Buntin_222to230#sthash.0KSqQOkf.dpuf

Progress Towards Meaningful Use: Hospitals' Adoption of Electronic Health Records

Melinda Buntin et al. — Sun, 19 May 2013 11:07:23 PDT

Objectives: To update the status of electronic health record (EHR) adoption in US hospitals and assess their readiness for “Meaningful Use” (MU). - See more at: http://www.ajmc.com/publications/issue/2011/2011-12-vol17-SP/Progress-Toward-Meaningful-Use-Hospitalsu2019-Adoption-of-Electronic-Health-Records#sthash.iW84x2pn.dpuf

Variation in Electronic Health Record Adoption and Readiness for Meaningful Use: 2008-2011

Melinda Buntin et al. — Sun, 19 May 2013 10:49:08 PDT

Objective. We sought to examine readiness and interest in MU among primary care physicians and specialists, and identify factors that may affect their readiness to obtain MU incentives.