There is an absence of solid empirical work related to and few real-world applications of episode-based approaches that provide guidance on how best to construct and apply episodes of care in the context of performance measurement and/or payment policy. The work done within this project was exploratory in nature and represents only a first step in a much larger process to flesh-out episode of care-based approaches to performance measurement and payment. The findings contained in this report reflect the design features of the two commercially available grouper software tools that were used to construct episodes in this project. Other types of episode constructions could yield different results. Additionally, some of the observed variation in results across states may be an artifact of variations in coding practices in different regions and future work should attempt to understand the extent of variation in coding practices.
Our exploration highlighted a number of issues and gaps in the knowledge base where additional research studies and/or testing in the form of small pilot studies or demonstrations could further advance Medicare’s capabilities to apply episodes of care in various ways to drive improvements in quality and cost-efficiencies. Areas for additional work that could be considered are described in more detail in Chapter 6.