Health Practitioner Bonuses and Their Impact on the Availability and Utilization of Primary Care Services. 1. Impact of PCIP Policy on Number of Eligible Providers

12/22/2014

We examined the changes in the number of providers with a Medicare PCIP eligible specialty in a county who have at least one claim for PCIP eligible services to identify the potential impact of the PCIP policy on these providers. Exhibit 13 shows the results from the DID regression models in which we use the number of providers in a county and in a specific year as the outcome variable (Model 1), the number of physicians in each county and year (Model 2); and the number of non-physicians (i.e., NP, PA and CN). The key variable in each model is the interaction between the indicator for PCIP eligible specialty and the indicator for the period after 2009.

In Model 1, the first estimated coefficient suggests that on average the number of Medicare providers with a PCIP eligible specialty and at least one PCIP eligible claim increased by about 2.8 providers per county in each year after 2009 due to the Medicare PCIP. This represents an economically meaningful increase given that on average there were about 15 providers per county per year in a PCIP eligible specialty during the sample period. This increase (almost 19 percent) in the number of providers in PCIP eligible specialties may be the primary reason for the estimated reduction in the number of E&M claims per provider due to the PCIP policy.

In addition, when we restrict the estimation to physicians (Model 2), the increase in the number of physicians with a PCIP eligible specialty attributable to the policy is about 2 per county per year. This is almost 10 percent of the average number of primary care physicians in a given PCIP eligible specialty per county per year (average is almost 19). Furthermore, the estimated policy impact in Model 3 indicates that the number of PCIP eligible non-physicians increased by over 3.6 providers per county per year. Thus, all three models confirm that the introduction of the PCIP policy generated an increase in the number of PCIP eligible providers above and beyond the general increasing time trend. Subsequently, this increased number of providers may have resulted in the reduction in the average number of E&M claims submitted by these Medicare providers after 2009.41

Exhibit 13: Impact of Medicare PCIP on the Number of PCPs with Medicare Claims for PCIP Eligible Services (2005-2011)

Dependent Variable: Number of Providers per county

All Providers (1) Physicians Only (2) Non-Physicians Only (3)

PCIP Elig. Specialty Indicator

42.47* 34.00* 27.21*
(3.133) (3.647) (2.078)

Elig. Specialty Ind x Post 2009

2.759* 1.950* 3.632*
(0.444) (0.674) (0.375)

Post 2009

2.929* 1.884* 2.895*
(0.455) (0.541) (0.304)

Median Income ($10k)

1.591* 2.218* 1.061*
(0.385) (0.468) (0.206)

Percent in poverty

0.254* 0.339* 0.210*
(0.0479) (0.0587) (0.0285)

Population (10k)

0.536* 0.607* 0.317*
(0.0280) (0.0339) (0.0128)

Percent Population over 65

-0.307* -0.196* -0.234*
(0.0363) (0.0452) (0.0238)

Unemployment Rate

-0.518* -0.510* -0.400*
(0.0461) (0.0557) (0.0324)

Intercept

-49.70* -59.88* -30.06*
(3.489) (3.996) (2.344)
Specialty Fixed Effects Yes Yes Yes
Year Fixed Effects Yes Yes Yes
State Fixed Effects Yes Yes Yes
N 140,192 107,526 95,647
Adj. R-sq. 0.310 0.338 0.365

Note: Robust standard errors are in parentheses; + significance at 10 percent; * significance at 5 percent. The number of observation is based on the number of counties, the number of years, and the number of provider specialties in each model (i.e., physicians include 4 primary care specialties and non-physicians include 3 sub- specialties).

The PCIP policy could impact the number of Medicare providers submitting PCIP eligible claims through several channels. First, the policy may induce an established PCP to start to treat Medicare patients (new or established patient) under PCIP eligible services that they may not have done before. In addition, the policy may also encourage new providers, fresh out of their completion of residency training, to provide PCIP eligible services under Medicare. Lastly, one can also argue that the PCIP policy may encourage providers with a PCIP non-eligible specialty to switch to a PCIP-eligible specialty and increase their chance to receive the incentive payment. This last scenario could be especially relevant for internal medicine sub-specialties such as cardiology, pulmonary disease, nephrology, and endocrinology, which are not PCIP-eligible although the internal medicine specialty is PCIP-eligible. Without judging whether such specialty switching is a desired outcome under the PCIP policy, we first examine to what extent such switching of specialty is prevalent in our dataset; and second, whether such phenomenon is large enough to influence the impact of the PCIP policy on the number of providers who submit at least one Medicare claim under PCIP eligible services.

Based on our 2005-2011 claims data we have estimated that during the post-PCIP policy period (2010 and 2011) there are about 30,864 new primary care physicians (family practice, internal medicine, pediatrics and geriatrics) and 27,927 new primary care non-physicians who have submitted at least one claim under Medicare. (Note that, in this accounting, we do not attempt to distinguish between “new” providers who were induced by the PCIP to participate, and providers that would have entered the Medicare program anyway.) Based on our Medicare data we have estimated that 3,057 physicians with at least one Medicare claim switched their specialty to a PCIP eligible specialty during the post-policy period. Over 50 percent (1,645) of these specialty switches are switches into internal medicine, mainly from internal medicine sub-specialties. The number of specialty switchers is substantially smaller than the number of total new Medicare physicians with a PCIP eligible specialty in the post-policy periods. Thus, switching of specialty could not account for the estimated impact of the PCIP policy on the number of primary care physicians.

Based on our claims data we estimate that during the post-PCIP policy period (2010 and 2011) there are 17,662 new primary care physicians (family practice, internal medicine, pediatrics and geriatrics) who have submitted at least one PCIP eligible claim. Additionally, we have estimated from published sources that during the post policy period there are about 10,000 residency positions filled under primary care, annually, from 2009 to 2011.42 If the Medicare PCIP policy attracts part of these providers under Medicare to provide PCIP eligible services, then such evidence would be consistent with our estimated impact of the PCIP policy in Exhibit 13.

Exhibit 14 shows the impact of the PCIP policy on the number of providers accepting new Medicare patients (Model 1) and on the number of new Medicare providers (Model 2). The estimated coefficient on the main variable of interest — the interaction between the PCIP eligibility indicator and the post-2009 indicator — suggests that, due to the PCIP policy, on average the number of PCPs accepting new Medicare patients increased by about 1 provider per county per year for a given PCIP eligible specialty. This estimated impact is not negligible given that there are about 9 Medicare PCPs for a given primary care specialty who accept new Medicare patients per county per year during the sample period.

Similarly, Model (2) in Exhibit 14 shows the impact of the PCIP policy on the number of new Medicare providers who have submitted Medicare claims for PCIP eligible services. The estimated coefficient on the main variable of interest suggests that due to the PCIP policy, on average, the number of new Medicare primary care providers with at least one claim submitted for PCIP eligible services increased by 0.148 per county per year for a given PCIP eligible specialty. Given that, on average, there are about 1.4 new Medicare primary care providers per county per year in a PCIP eligible specialty with at least one PCIP eligible claim during the sample period, the estimated impact is again not negligible.

Exhibit 14: Impact of Medicare PCIP on the Number of Providers Accepting New Medicare Patients and the Number of New Primary Care Providers under Medicare with Claims for PCIP Eligible Services (2005-2011)

  Number of Providers Accepting New Medicare Patients (1) Number of New Medicare Providers (2)

PCIP Elig. Specialty Indicator

28.19* 4.367*
(1.959) (0.297)

Elig. Specialty Ind x Post 2009

0.883* 0.148*
(0.345) (0.0440)

Post 2009

1.605* 0.293*
(0.369) (0.0460)

Median Income ($10k)

1.455* 0.0508
(0.295) (0.0445)

Percent in poverty

0.143* 0.0160*
(0.0366) (0.00545)

Population (10k)

0.351* 0.0482*
(0.0204) (0.00328)

Percent Population over 65

-0.177* -0.0443*
(0.0295) (0.00436)

Unemployment Rate

-0.314* -0.0512*
(0.0374) (0.00544)

Intercept

-34.32* -3.926*
(2.461) (0.330)
Specialty Fixed Effects Yes Yes
Year Fixed Effects Yes Yes
State Fixed Effects Yes Yes
N

 

Adj. R-sq.

140,192

 

0.250

121,084

 

0.255

Note: Robust standard errors are in parentheses; + significance at 10 percent; * significance at 5 percent.


41 We have also estimated similar models for the primary care providers who have any Medicare claims (not necessarily under PCIP eligible services) and the estimated effects of the PCIP policy are slightly larger in those cases. These additional results are included in Appendix B Exhibit B 15. In addition we have estimated similar models of providers who met the 60% PCIP eligibility threshold in each year (2005-2011). As expected, the estimated impact of PCIP policy on the number of primary care providers is relatively lower for this restricted set of providers. However, if we focus on this restricted set of providers then we are likely to lose those providers who may have been induced to provide PCIP eligible services in response to the policy, but may not have reached the 60% threshold. Similarly we would lose the information on the providers who have reduced the proportion to below 60%. The estimated results on this restricted set of providers are presented in Appendix B Exhibit B16.

42 Estimates include the following primary care specialties: family practice, internal medicine (including pediatrics), pediatrics. Source: National Resident Matching Program, Results and Data: 2011 Main Residency Match. National Resident Matching Program, Washington, DC. 2011.

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