Exploring Episode-Based Approaches for Medicare Performance Measurement, Accountability and Payment Final Report. Attributing Episodes of Care to Providers


A critical issue when measuring clinical performance and resource utilization is assigning responsibility (also called “attribution”) for the services or set of services that are or are not provided to a beneficiary.  The building block approach, which illustrates that an episode can be constructed and used in various ways, implies different issues related to attribution.

An episode-based approach that cuts across the continuum of care would require that accountability for the episode to be assigned to an entity or group of entities.  The accountable entities would then assume responsibility for performance (i.e., quality and/or resource use pertaining to the full set of services provided (or not provided) during the episode).  Accountability could be reinforced in a range of ways, including, but not limited to, measurement and providing feedback to providers on performance and resource use for episodes of care, public reporting of performance results within an episode of care construct, financial incentives for performance and/or resource use for episodes of care, or episode-based payment adjusted for performance.

In reviewing the literature, we sought to understand how attribution has been addressed either in practice or in concept within the area of performance measurement. Some of the approaches focused on assigning accountability to a single entity, while other approaches jointly attributed an episode to multiple entities.  Depending on how an episode of care is defined, the accountable entities accountability could be individual providers, integrated provider groups such as physician group practices or integrated delivery systems, or “virtual groups” of providers that create a formal relationship for the purposes of episode-based payment and/or performance measurement (Davis and Guterman, 2007).  A paper by Fisher et al. (2006) calls for the construction of Accountable Care Organizations (ACOs) by defining virtual groups that comprise physicians and the hospitals where they work or admit their patients; the researchers assert that this approach is feasible because Medicare beneficiaries receive most of their care from relatively coherent local delivery systems.  Some of the experts interviewed favored beginning by allowing integrated provider groups to accept accountability for episodes, while others expressed concerns that such an arrangement would reward existing organizational structures; instead allowing attribution to virtual groups would foster more innovation in health care delivery and may move providers towards forming more cohesive group arrangements.

Specific entities that have been used or proposed as the basis of attribution include:

  • Individual physician(s).  Commonly proposed criteria for assigning responsibility to an individual physician include a count of Evaluation and Management (E&M) visits or costs, physician specialty type, or some combination thereof (CCHRI, 2008).
  • Individual physician – hospital care onlyOne approach that has been tested is to attribute acute inpatient episodes to the attending physician for the hospitalization.
  • Hospitals.  Another strategy is to hold hospitals accountable for episodes of care that include a hospitalization in addition to physician services and/or services from other providers, such as skilled nursing facilities (Jencks and Dobson, 1985; Welch, 1989) .
  • Integrated Delivery Systems and Physician Group Practices.  Existing integrated provider organizations are likely to have the greatest ability to assume responsibility for episodes of care because of the defined relationships between providers (Davis and Guterman, 2007; MedPAC, 2007a; MedPAC, 2007b; MedPAC, 2007c) . 
  • Hospital medical staff.  This model would assign accountability for acute care episodes to the entire medical staff of a hospital (holding the hospital accountable as well). 
  • Virtual Groups. Some have suggested the possibility of using virtual groups – that is, groups defined by geographic areas or other characteristics primarily for the purposes of episode-based performance measurement or payment (Davis and Guterman, 2007).

Assignments could be made prospectively or retrospectively under any of these scenarios.  Prospective designation allows for some choice by physicians and patients about which providers should be responsible for which patients’ episodes of care (Davis, 2007; Pham, Schrag et al., 2007), but it also creates the possibility of risk selection (i.e., incentivizing providers to assume accountability for healthier, more-profitable patients).  Prospective designation is easier in environments, such as managed care plans, where patients are already assigned to primary care physicians (PCPs).  In a FFS environment, when patients may use multiple PCPs, the assignment could prove more challenging.  Retrospective attribution is methodologically challenging because physicians frequently bill under multiple tax identifiers and these tax identifiers may be at a group level thereby precluding attribution to a specific physician. 

Both approaches to attribution raise policy considerations because different assignment methods can lead to substantially different results on various criteria.  In a previous study, RAND found significant variation in both the fraction of episodes that could be assigned to a physician and the level of agreement to which a physician was held responsible.  RAND researchers (Mehrotra et al., 2007) examined 13 retrospective assignment rules in assigning episodes of resource utilization constructed from Symmetry’s ETG tool.  This study applied the assignment rules against an aggregated claims database from four commercial health plans in Massachusetts .  The 13 rules differed on characteristics such as the basis of assignment (e.g. costs versus visits) and whether only one or multiple physicians were assigned to an episode.  Comparing the results of two different rules found that 50 percent of the episodes were assigned to different physicians, illustrating that different assignment methods using different criteria can lead to substantially different results regarding which provider would be held responsible.

When accountability is assigned to individual physicians, small sample sizes could lead to substantial risk for costs and/or quality outcomes given that the estimates of costs and performance based on a small number of cases will be noisy (i.e., highly variable)—which is one reason thaThe discussions with experts found sharp differences of opinion on the relative merits of these two approaches. Some experts strongly believed that providers would not “buy in” to episode-based approaches unless they had prospectively identified the patients/episodes for which they were accountable.  Other experts expressed a concern that very few providers were organized into formally linked groups of providers to be able to accept accountability for episodes, and that strong incentives would be required to drive them to organize themselves to do so. Some experts expressed doubt that many providers would voluntarily accept accountability for episodes.t Fisher et al. (2006) recommended assigning accountability to larger units.  However, the risk would also depend on the variability of the outcome in question and potential safeguards against risk that could be used.  Given the degree of dispersion of care across multiple providers for a typical Medicare beneficiary, fostering a sense of shared accountability across providers and settings for an episode of care may prove challenging.  This may be particularly true whself as primarily responsible for delivering the recommended care (e.g., a cardiologist may not view her/himself as responsible for ensuring that a woman receives a mammogram).

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