Are current DRG-based bundled payment models for lumbar fusions risk-adjusting adequately? An analysis of Medicare beneficiaries

Malik, Azeem Tariq; Phillips, Frank M.; Yu, Elizabeth; Khan, Safdar N.

doi:10.1016/j.spinee.2019.04.024

Cited by 27 publications

(18 citation statements)

References 34 publications

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“…Under prospective payment models, cost monitoring and management are vital for providers to stay financially competitive and are also essential for them to offer high-quality care. At the same time, precise cost information based on well-represented patient data may also assist payers in adjusting payment policies to further increase efficiency and support new payment initiatives 19 , 20 .…”

Section: Discussionmentioning

confidence: 99%

Early prediction of diagnostic-related groups and estimation of hospital cost by processing clinical notes

et al. 2021

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As healthcare providers receive fixed amounts of reimbursement for given services under DRG (Diagnosis-Related Groups) payment, DRG codes are valuable for cost monitoring and resource allocation. However, coding is typically performed retrospectively post-discharge. We seek to predict DRGs and DRG-based case mix index (CMI) at early inpatient admission using routine clinical text to estimate hospital cost in an acute setting. We examined a deep learning-based natural language processing (NLP) model to automatically predict per-episode DRGs and corresponding cost-reflecting weights on two cohorts (paid under Medicare Severity (MS) DRG or All Patient Refined (APR) DRG), without human coding efforts. It achieved macro-averaged area under the receiver operating characteristic curve (AUC) scores of 0·871 (SD 0·011) on MS-DRG and 0·884 (0·003) on APR-DRG in fivefold cross-validation experiments on the first day of ICU admission. When extended to simulated patient populations to estimate average cost-reflecting weights, the model increased its accuracy over time and obtained absolute CMI error of 2·40 (1·07%) and 12·79% (2·31%), respectively on the first day. As the model could adapt to variations in admission time, cohort size, and requires no extra manual coding efforts, it shows potential to help estimating costs for active patients to support better operational decision-making in hospitals.

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Section: Discussionmentioning

confidence: 99%

Early prediction of diagnostic-related groups and estimation of hospital cost by processing clinical notes

et al. 2021

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“…A recent study examining spine surgery in working age adults with commercial insurance also found significant cost variation within and between MS-DRGs, but little difference in spending over the duration of 30-, 60-, and 90-day simulated bundles [29]. The variation in cost within MS-DRGs may result from considerable differences previously demonstrated in both the underlying pathology and procedural complexity within MS-DRGs [30]. Non-cervical spinal fusions represent a more heterogenous mix of surgical approaches and complexity than do those of the cervical spine, which likely contributes to the higher variation seen in index admission costs.…”

Section: Discussionmentioning

confidence: 99%

Strategies for spinal surgery reimbursement: bundling in the working-age population

Dalton

Mjåset

Manful

et al. 2021

BMC Health Serv Res

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Introduction Bundled payments for spine surgery, which is known for having high overall cost with wide variation, have been previously studied in older adults. However, there has been limited work examining bundled payments in working-age patients. We sought to identify the variation in the cost of spine surgery among working age adults in a large, national insurance claims database. Methods We queried the TRICARE claims database for all patients, aged 18–64, undergoing cervical and non-cervical spinal fusion surgery between 2012 and 2014. We calculated the case mix adjusted, price standardized payments for all aspects of care during the 60-, 90-, and 180-day periods post operation. Variation was assessed by stratifying Hospital Referral Regions into quintiles. Results After adjusting for case mix, there was significant variation in the cost of both cervical ($10,538.23, 60% of first quintile) and non-cervical ($20,155.59, 74%). Relative variation in total cost decreased from 60- to 180-days (63 to 55% and 76 to 69%). Index hospitalization was the primary driver of costs and variation for both cervical (1st-to-5th quintile range: $11,033–$19,960) and non-cervical ($18,565–$36,844) followed by readmissions for cervical ($0–$11,521) and non-cervical ($0–$13,932). Even at the highest quintile, post-acute care remained the lowest contribution to overall cost ($2070 & $2984). Conclusions There is wide variation in the cost of spine surgery across the United States for working age adults, driven largely by index procedure and readmissions costs. Our findings suggest that implementing episodes longer than the current 90-day standard would do little to better control cost variation.

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“…This consensus is reasonable, since patients are classified into heterogeneous diagnosis-related groups (DRGs) based on their individual characteristics. Patients in the same group have similar physical and disease conditions; that is, they are homogeneous [42,43]. When a patient is entered into a healthcare delivery system, the hospital chooses treatment intensity θ ∈ [θ min , θ max ] to maximize their expected profit [14].…”

Section: Problem Definitionmentioning

confidence: 99%

Healthcare Warranty Policies Optimization for Chronic Diseases Based on Delay Time Concept

et al. 2021

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Warranties for healthcare can be greatly beneficial for cost reductions and improvements in patient satisfaction. Under healthcare warranties, healthcare providers receive a lump sum payment for the entire care episode, which covers a bundle of healthcare services, including treatment decisions during initial hospitalization and subsequent readmissions, as well as disease-monitoring plans composed of periodic follow-ups. Higher treatment intensities and more radical monitoring strategies result in higher medical costs, but high treatment intensities reduce the baseline readmission rates. This study intends to provide a systematic optimization framework for healthcare warranty policies. In this paper, the proposed model allows healthcare providers to determine the optimal combination of treatment decisions and disease-monitoring policies to minimize the total expected healthcare warranty cost over the prespecified period. Given the nature of the disease progression, we introduced a delay time model to simulate the progression of chronic diseases. Based on this, we formulated an accumulated age model to measure the effect of follow-up on the patient’s readmission risk. By means of the proposed model, the optimal treatment intensity and the monitoring policy can be derived. A case study of pediatric type 1 diabetes mellitus is presented to illustrate the applicability of the proposed model. The findings could form the basis of developing effective healthcare warranty policies for patients with chronic diseases.

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Are current DRG-based bundled payment models for lumbar fusions risk-adjusting adequately? An analysis of Medicare beneficiaries

Cited by 27 publications

References 34 publications

Early prediction of diagnostic-related groups and estimation of hospital cost by processing clinical notes

Early prediction of diagnostic-related groups and estimation of hospital cost by processing clinical notes

Strategies for spinal surgery reimbursement: bundling in the working-age population

Healthcare Warranty Policies Optimization for Chronic Diseases Based on Delay Time Concept

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