Lessons Learned Preparing for Medicare Bundled Payments

Mechanic, Robert E.; Tompkins, Christopher P.

doi:10.1056/nejmp1210823

Cited by 48 publications

(39 citation statements)

References 2 publications

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“…The decision to exclude low-volume hospitals is consistent with statistical principles used by the CMS and others when evaluating hospital performance-in particular, that small sample sizes of lower-volume hospitals are insufficient for valid estimates of performance [21,22]. For each patient who received a primary elective TKA in one of our study hospitals, we created a longitudinal record extending from 30 days before admission until 90 days after surgery; thus, the total episode of care for each patient extended for a full 120 days in accordance with current proposals for episode-of-care payments using the five data files described previously [9,18,24].…”

Section: Methodsmentioning

confidence: 99%

“…Bundled payments would involve a single lump sum payment from Medicare (or another payer) to an integrated healthcare delivery system for an entire episodeof-care [24,26]. The episode-of-care typically would include all preprocedure, periprocedure, and postdischarge services that a patient would receive during treatment for a wellcircumscribed disease or condition [26].…”

Section: Introductionmentioning

confidence: 99%

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What Drives Variation in Episode-of-care Payments for Primary TKA? An Analysis of Medicare Administrative Data

Cram

Ravi

Vaughan-Sarrazin

et al. 2015

Clinical Orthopaedics &Amp; Related Research

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Background Episode-of-care payments are defined as a single lump-sum payment for all services associated with a single medical event or surgery and are designed to incentivize efficiency and integration among providers and healthcare systems. A TKA is considered an exemplar for an episode-of-care payment model by many policymakers, but data describing variation payments between hospitals for TKA are extremely limited. Questions/purposes We asked: (1) How much variation is there between hospitals in episode-of-care payments for primary TKA? (2) Is variation in payment explained by differences in hospital structural characteristics such as teaching status or geographic location, patient factors (age, sex, ethnicity, comorbidities), and discharge disposition during the postoperative period (home versus skilled nursing facility)? (3) After accounting for those factors, what proportion of the observed variation remains unexplained? Methods We used Medicare administrative data to identify fee-for-service beneficiaries who underwent a primary elective TKA in 2009. After excluding low-volume hospitals, we created longitudinal records for all patients undergoing TKAs in eligible hospitals encompassing virtually all payments by Medicare for a 120-day window around the TKA (30 days before to 90 days after). We examined payments for the preoperative, perioperative, and postdischarge periods based on the hospital where the TKA was performed. Confounding variables were controlled for using multivariate analyses to determine whetherThe institution of one of the authors (PC) has received, during the study period, funding from the National Institutes of Health (K24 AR062133 and R01 AG033035). All ICMJE Conflict of Interest Forms for authors and Clinical Orthopaedics and Related Research 1 editors and board members are on file with the publication and can be viewed on request. Each author certifies that the institutional review board at the University of Iowa approved the human protocol for this investigation, that all investigations were conducted in conformity with ethical principles of research, and that informed consent for participation in the study was obtained. This work was performed at the University of Iowa, Iowa City, IA. Clinical Orthopaedics and Related Research ®A Publication of The Association of Bone and Joint Surgeons® differences in hospital payments could be explained by differences in patient demographics, comorbidity, or hospital structural factors. Results There was considerable variation in payments across hospitals. Median (interquartile range) hospital preoperative, perioperative, postdischarge, and 120-day payments for patients who did not experience a complication were USD 623 (USD 516-768), USD 13,119 (USD 12,668), USD 8020 (USD 6403-9933), and USD 21,870 (USD 19,041), respectively. Variation cannot be explained by differences in hospital structure. Median (interquartile range) episode payments were greater for hospitals in the Northeast (USD 26,291 [22,323

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Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

What Drives Variation in Episode-of-care Payments for Primary TKA? An Analysis of Medicare Administrative Data

Cram

Ravi

Vaughan-Sarrazin

et al. 2015

Clinical Orthopaedics &Amp; Related Research

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“…2,4,8 We linked 5 separate data files (Table 1) to comprehensively capture all payments made by Centers for Medicare and Medicaid Services (CMS) during the study period. When used in combination, these files allow for the capture of all inpatient, outpatient, and postacute care.…”

Section: Methods Datamentioning

confidence: 99%

Bundled Payments for Elective Primary Total Knee Arthroplasty

Cram

Lü

2014

Geriatr Orthop Surg Rehabil

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Bundled payments have been proposed as a mechanism for restraining health care spending for total knee arthroplasty (TKA), but empirical data are limited. We used Medicare data to examine variation in payments for TKA during a window extending 30 days before to 90 days after TKA for 167 186 patients who underwent elective primary TKA in 2009. Mean Medicare payment was US$23 656. We found that 2.5% of patients incurred payments of >US$50 000 (0.2% >US$100 000). Payments were lower for men and for non-Hispanic whites but higher for patients with greater comorbidity. Episode-of-care payment for primary TKA varies substantially depending upon patient demographics and comorbidity. To the extent that similar patients tend to be clustered within hospitals, bundled payments could inadvertently cause financial harm to certain health systems while rewarding others.

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“…We used the perspective of a hospital with a bundled payment model providing a fixed reimbursement for a hospitalization, similar to those being evaluated by the US Centers for Medicare and Medicaid Services as part of the Affordable Care Act. 15,16 …”

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confidence: 99%

Cost-Benefit Analysis of a Medical Emergency Team in a Children’s Hospital

Bonafide

Localio

Song³

et al. 2014

Pediatrics

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WHAT'S KNOWN ON THIS SUBJECT:Numerous studies have demonstrated clinical benefits of medical emergency team (MET) implementation, including reductions in mortality, cardiac arrests, and critical deterioration events. No studies have evaluated the financial costs and benefits of METs. WHAT THIS STUDY ADDS:The costs of operating an MET can plausibly be recouped with a modest reduction in critical deterioration events. Hospitals reimbursed with bundled payments could see real financial savings by reducing critical deterioration events with a MET. abstract OBJECTIVES: Medical emergency teams (METs) can reduce adverse events in hospitalized children. We aimed to model the financial costs and benefits of operating an MET and determine the annual reduction in critical deterioration (CD) events required to offset MET costs. METHODS:We performed a single-center cohort study between July 1, 2007 and March 31, 2012 to determine the cost of CD events (unplanned transfers to the ICU with mechanical ventilation or vasopressors in the 12 hours after transfer) as compared with transfers to the ICU without CD. We then performed a cost-benefit analysis evaluating varying MET compositions and staffing models (freestanding or concurrent responsibilities) on the annual reduction in CD events needed to offset MET costs. RESULTS:Patients who had CD cost $99 773 (95% confidence interval, $69 431 to $130 116; P , .001) more during their post-event hospital stay than transfers to the ICU that did not meet CD criteria. Annual MET operating costs ranged from $287 145 for a nurse and respiratory therapist team with concurrent responsibilities to $2 358 112 for a nurse, respiratory therapist, and ICU attending physician freestanding team. In base-case analysis, a nurse, respiratory therapist, and ICU fellow team with concurrent responsibilities cost $350 698 per year, equivalent to a reduction of 3.5 CD events.CONCLUSIONS: CD is expensive. The costs of operating a MET can plausibly be recouped with a modest reduction in CD events. Hospitals reimbursed with bundled payments could achieve real financial savings by reducing CD with an MET. Pediatrics 2014;134:235-241

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Lessons Learned Preparing for Medicare Bundled Payments

Cited by 48 publications

References 2 publications

What Drives Variation in Episode-of-care Payments for Primary TKA? An Analysis of Medicare Administrative Data

What Drives Variation in Episode-of-care Payments for Primary TKA? An Analysis of Medicare Administrative Data

Bundled Payments for Elective Primary Total Knee Arthroplasty

Cost-Benefit Analysis of a Medical Emergency Team in a Children’s Hospital

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