Exploring Episode-Based Approaches for Medicare Performance Measurement, Accountability and Payment Final Report. Geographic Variation and Out of State Care

02/01/2009

Much of the data presented in the chapter has been aggregated across the three states, Florida, Oregon and Texas. Figure 23 shows the average standardized payments per ETG episode by state for each of the nine conditions. As shown, there is substantial variation in the payments per episode, but the pattern by state is not completely consistent. For most conditions, Oregon has lower standardized payments per episode than either Florida or Texas. For some conditions, Florida and Texas have very similar average standardized payments per episode, but Texas has substantially higher payments for bacterial pneumonia, cerebrovascular disease and hip fracture, while Florida has higher average standardized payments for congestive heart failure. These differences could be driven by differences in the number of episodes per beneficiaries in the three states, which could be interpreted as differences in case mix or health of the beneficiaries. The variations could also be due to variations in practice patterns or differences in the use of different care settings, such as the use inpatient rehabilitation facilities versus SNFs. It will be important in future work to distinguish how much of the differences observed are a function of these various factors and to consider the implications for performance measurement and financial incentives.

Figure 23. Average Standardized Payments per Episode by Condition and State, ETGs

Average Standardized Payments per Episode by Condition and State, ETGs

Figure 23 shows the average standardized payments per ETG episode by state for each of the nine conditions. As shown, there is substantial variation in the payments per episode, but the pattern by state is not completely consistent. For most conditions, Oregon has lower standardized payments per episode than either Florida or Texas. For some conditions, Florida and Texas have very similar average standardized payments per episode, but Texas has substantially higher payments for bacterial pneumonia, cerebrovascular disease and hip fracture, while Florida has higher average standardized payments for congestive heart failure. These differences could be driven by differences in the number of episodes per beneficiaries in the three states, which could be interpreted as differences in case mix or health of the beneficiaries.

Figure 24. Types of Facilities Involved in ETG Episodes Related to Hip Fracture by State

Types of Facilities Involved in ETG Episodes Related to Hip Fracture by State

Figure 24 illustrates for hip fracture the state variation in the types of facilities involved in the management of an episode. While approximately 80 percent of episodes related to hip fracture involve an inpatient hospital setting in all three states, there is variation in the use of inpatient rehabilitation facilities (IRFs) and SNFs. Of the three states, Texas has the highest use of IRFs and the lowest use of SNFs, suggesting these two types of facilities are substitutes. Oregon, which has few IRFs, has a much use of SNFs for hip fracture-related episodes.

Figure 25. Percentage of ETG Episodes Involving Providers from More than One State

  Percentage of ETG Episodes Involving Providers from More than One State

Figure 25 shows the fraction of care delivered outside the primary state of residence of the beneficiary for each of the nine conditions. This out of state care could be due to beneficiaries residing in a different state for part of the year (e.g., snowbirds), referrals to providers or facilities in a different state, or cross border care when a beneficiary lives close to a state line. There was variation among beneficiaries in the three states in the proportion of ETG episodes that involved providers outside of the beneficiaries"™ primary state of residence, with Oregon having the largest fraction. Contrary to our expectations, Florida does not have the highest rate of out of state care due to snowbirds, but this may be because Florida is not the primary state of residence for these individuals. Overall out-of-state care was received for a minority of episodes "“ less than 20 percent. However, when out of state care was involved, it was often a significant portion of the total standardized payments for the episode, with the average ranging from 43 to 57 percent. Similar results were observed using MEGs.

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