TITLE: Access in Managed Care

ABSTRACT: This project developed and tested a set of performance indicators for Medicare managed care plans. The focus of this study was to develop a monitoring system that can be implemented using claims and encounter data from managed care plans, and was intended to serve as a pilot for determining what measures can be constructed and meaningfully interpreted. Using data from a managed care plan known to have high quality information systems already in place, a set of indicators can be constructed, and meaningful comparisons can be made between managed care and the fee-for-service sector. However, differences in databases can substantially complicate construction and interpretation of specific indicators. The final report contains a detailed discussion of the implications for developing a monitoring system such as the one tested during this study. The Health Care Financing Administration (HCFA) has begun the process of collecting encounter data from managed care plans. As the quality of the encounter data from managed care plans improves, the framework developed and tested through this project will serve as a foundation in future efforts to monitor and evaluate performance of the managed care sector relative to the fee-for-service sector.

AGENCY SPONSOR: Office of Strategic Planning

FEDERAL CONTACT: Renee Mentnech

PHONE NUMBER: 410-786-6692

PIC ID: 7189

PERFORMER ORGANIZATION: Health Economics Research, Inc. Waltham, MA
 

TITLE: Developing Cost Control Policies for Medicare Outpatient Services

ABSTRACT: This project involved an evaluation of the Ambulatory Patient Group (APG) Version II grouper. First, the grouper was evaluated for its ability to group 100 percent of Medicare outpatient department claims for the year 1993. No significant problems were encountered in grouping the outpatient claims using the grouper software. Secondly, charges were converted to costs and these data were then utilized to determine the homogeneity within and among the 290 groups. It should be noted that large cost coefficients of variation within and among the APGs are attributable to two primary causes. One is the grouping of unlike procedures into a single APG category. The other is variation in costs per unit at the procedure code level. The results of this analysis indicate that both factors are at work in varying degrees across the range of APGs. This analysis served to highlight those APG categories where additional refinement of the groupings might result in increased homogeneity of resource use. The third and final component of the project involved the calculation of cost-based payment weights and the performance of a financial impact simulation with the hospital as the unit of analysis. The findings are a cross-sectional, retrospective analysis that does not incorporate any behavioral offset response. They suggest there are almost no differences, on average, between the full packaged ancillary option and no packaging. However, adoption of an APG system will have varying impacts on different categories of hospitals. Hospitals in the Middle Atlantic, New England and Pacific regions and large urban facilities demonstrated losses. Hospitals in the other geographic areas and rural facilities showed gains relative to costs.

AGENCY SPONSOR: Office of Strategic Planning

FEDERAL CONTACT: Mark Krause

PHONE NUMBER: 410-786-6683

PIC ID: 7166

PERFORMER ORGANIZATION: Urban Institute Washington, D.C.
 

TITLE: Disenrollment and Selection Experience Under the Medicare HMO Risk Program

ABSTRACT: This project consisted of a series of analyses comparing Medicare health maintenance organization (HMO) joiners and disenrollees to beneficiaries in fee-for-service (FFS). The purpose was to make several different estimates of the degree of biased selection in enrollment and disenrollment. Biased selection in Medicare HMOs is taken to mean the enrollment (or disenrollment) of beneficiaries whose average costs are not equal to the average costs of like beneficiaries in the fee-for-sector. Among differences measured were prior use characteristics such as hospitalization and costs, mortality and occurrence of selected procedures after disenrollment. The methodology included logistic models for probability of joining an HMO conditioned on prior use, and probability of an event after disenrollment. Data used were for counties with at least 1,000 HMO enrollees in the years 1993 and 1994. One set of analyses compared 1993 pre-enrollment data on utilization and expenditures for persons who joined an HMO in 1994, to those who stayed in the FFS sector. The subset of 1994 HMO joiners who then disenrolled was examined separately and compared to the same sample of FFS beneficiaries. The study found that, in every case, reimbursements and utilization measures were lower in 1993 for persons who joined HMOs in 1994 than persons who remained in the FFS sector.

AGENCY SPONSOR: Office of Strategic Planning

FEDERAL CONTACT: Mel Ingber

PHONE NUMBER: 410-786-1913

PIC ID: 6294

PERFORMER ORGANIZATION: University of Minnesota Minneapolis, MN
 

TITLE: Evaluating Alternative Risk Adjusters for Medicare: Final Report

ABSTRACT: This project looked at the merit of alternative survey and claims-based risk adjusters for the Medicare population. It used multiple years (1991-1994) of the Medicare Current Beneficiary Survey to evaluate alternative demographic, survey, and claims-based risk adjusters for Medicare capitation payment. The investigators found that survey health status models have three to four times the predictive power of the demographic models. The claims-based models performed better than the survey models in predictive power and across most non-random groups. The combined claims/survey models were only modestly better than the claims diagnostic models alone. No single model predicted average expenditures uniformly well for all beneficiary subgroups of interest, suggesting a combination model may be appropriate. Substantial redundancy existed among the survey adjusters, indicating that reduction of survey questions is possible and necessary. More data are needed to obtain stable estimates of model parameters before a risk-adjustment payment methodology can be implemented. In conclusion, risk adjustment should improve risk selection problems.

AGENCY SPONSOR: Office of Strategic Planning

FEDERAL CONTACT: Sherry Terrell

PHONE NUMBER: 410-786-6601

PIC ID: 6989

PERFORMER ORGANIZATION: Center for Health Economics Research Waltham, MA
 

TITLE: Evaluation and Technical Assistance of the Medicare Alzheimer's Disease

ABSTRACT: The purpose of the Medicare Alzheimer's Disease Demonstration was to determine the effectiveness, cost, and impact on health status and functioning of providing comprehensive in-home and community-based services to beneficiaries who have dementia. Two models of care were studied under this project. Both models included case management and a wide range of services, such as homemaker/personal care services, adult day care, companion services, caregiver education and family counseling. The two models varied by the intensity of the case management provided to beneficiaries and their caregivers and the amount of demonstration service costs that could be paid for by Medicare each month. The demonstration achieved a number of its goals, but showed mixed results in its usefulness to informal support systems. Access to community care increased by more than a factor of two and the level of unmet task assistance in caring for the person with dementia was reduced by half among those in the treatment group. These supports generally did not replace the amount of informal care, instead they allowed this time to be redirected to specific tasks. These instrumental program achievements did not lead to significant reductions in caregiver burden or depression, nursing home placement rates, or overall Medicare expenditures.

AGENCY SPONSOR: Office of Strategic Planning

FEDERAL CONTACT: Dennis M.. Nugent

PHONE NUMBER: 410-786-6663

PIC ID: 6305

PERFORMER ORGANIZATION: University of California, San Francisco, Institute for Health and Aging, 201 Filbert Street, San Francisco CA 94133
 

TITLE: Evaluation of Version Two of the Ambulatory Patient Group System

ABSTRACT: Medicare hospital outpatient department claims are evaluated employing 3M/Health Information Systems Ambulatory Patient Group (APG) Version II software. The evaluation of a Medicare Prospective Payment System (PPS) for hospital outpatient departments was based on the universe of claims submitted in 1993. This analysis focused on: (1) the ability of the grouping software to group outpatient claims, (2) the relative distribution of the respective groups, (3) the calculation of payment weights, and (4) the simulated effects of moving to an APG payment system when compared to outpatient facility costs.

AGENCY SPONSOR: Office of Strategic Planning

FEDERAL CONTACT: Mark Krause

PHONE NUMBER: 410-786-6683

PIC ID: 6986

PERFORMER ORGANIZATION: Urban Institute Washington, D.C.
 

TITLE: Market Research for Providers and Other Partners: Final Report on Hospital Communication (February 9,1998)

ABSTRACT: The information needs of a hospital and the process by which these needs may be met are largely dictated by hospital characteristics. Several trends in the hospital market affect the way hospitals acquire knowledge and adapt operations, including: (1) the increasing prevalence of Medicare managed care; (2) consolidations, acquisitions, and mergers within the hospital market; and (3) the integration of hospital services with other types of care to form health systems and community networks. There are over 5,100 Medicare-certified short stay hospitals in the United States. The Health Care Financing Administration (HCFA) has initiated a comprehensive strategy to coordinate existing communication activities within HCFA and develop innovative, effective approaches that make information accessible to all program participants. This study addresses two central questions: (1) What information do hospitals need and want from HCFA? (2) How can this information be most effectively made available? Information on these issues was obtained from an expert Hospital Advisory Panel, Professional Review Organizations (PROs), and interviews with hospital staff, hospital associations and HCFA staff in the Central Office and Regional Offices. Additionally, reviews and content analyses of existing HCFA communication processes and written materials were conducted. Suggested areas for improvement include: (1) currency and accuracy of materials, (2) timeliness of communications, (3) consistency and coordination, (4) simplification, (5) availability, (6) dissemination, and (7) consultation with the hospital industry. Suggested changes would expand the use of some types of communication strategies, diversify communication methods and make certain specialized information more accessible. (final report is 110 pages)

AGENCY SPONSOR: Office of Strategic Planning

FEDERAL CONTACT: Sherry Terrell

PHONE NUMBER: 410-786-6601

PIC ID: 6992

PERFORMER ORGANIZATION: Barents Group, KPMG Peat Marwick LLP Washington, D.C.
 

TITLE: Medicare Cataract Surgery Alternate Payment Demonstration: Final Evaluation Report

ABSTRACT: This report evaluates the demonstration of an innovative payment approach, known as package payment or bundled pricing, for cataract surgical episodes in the Medicare program. Officially known as the Medicare Cataract Surgery Alternate Payment Demonstration, the project sought to employ market forces to select providers and negotiate discounted prices for a package or bundle of specified pre-operative, operative and post-operative services associated with an episode of cataract surgery. The primary objective of the demonstration was to assess the potential benefits of a negotiated package pricing arrangement for cataract removal with an intraocular lens (IOL) implant. By testing this alternate payment system, the Health Care Financing Administration (HCFA) sought to: (1) allow provider flexibility in managing the mix and type of services used, (2) provide incentives to manage patient care so that cost efficiencies are realized and the procedure can be performed at a lower total cost, (3) reduce Government involvement in the pricing of individual services and in the providers' decision making, (4) provide insight into appropriateness indicators and effective quality assurance and utilization review mechanisms for cataract surgery, and (5) provide information regarding factors influencing providers' decisions to participate and beneficiaries' decisions to select designated providers under a demonstration that is completely voluntary. To test this approach, HCFA decided that the demonstration would be implemented in three geographic locations and would operate for a period of three years. Despite its modest savings impact, the demonstration was remarkably successful in meeting most of its original objectives. (final report is 129 pages)

AGENCY SPONSOR: Center for Health Plans and Providers

FEDERAL CONTACT: Cynthia K. Mason

PHONE NUMBER: 410-786-6680

PIC ID: 6998

PERFORMER ORGANIZATION: Abt Associates, Inc. Cambridge, MA
 

TITLE: Medicare Participating Heart Bypass Center Demonstration Evaluation

ABSTRACT: This project was the second and final evaluation of the negotiated bundled payment demonstration, implemented in May 1991 to assess the benefits of a negotiated package pricing arrangement for heart bypass surgery. Under the demonstration, hospitals and physicians received a global payment (covering hospital and related physician services, including outliers and re-admissions), for each Coronary Artery Bypass Graft procedure. The negotiated rate represented a discount from what Medicare paid, on average, for these procedures. The demonstration was implemented at four sites in May 1991. An initial three year evaluation was completed and a second extended evaluation was started in 1994 for the remaining two years of the demonstration. At the end of the demonstration, over 10,000 procedures were performed under the demonstration with an estimated savings to the Medicare program of over $50 million. Findings suggest that both Medicare and hospitals can benefit from global payment arrangements through reduced costs, better coordination of services, and improved quality of care. The bundled payment arrangement provided incentives to facilitate more cooperative relationships between physicians and hospital staff, leading to quality improvement activities which resulted in high quality, efficient patient care delivery and lower costs. The demonstration led to innovative physician incentive programs to improve quality and reduce costs, a nationwide proliferation of private sector bundled payment arrangements based on the demonstration, proposed legislation to establish negotiated bundled payment arrangements under the regular Medicare program, and the design of a new bundled payment demonstration for orthopedic and cardiovascular services.

AGENCY SPONSOR: Office of Clinical Standards and Quality

FEDERAL CONTACT: Armen H..Thoumaian, Ph.D.

PHONE NUMBER: 410-786-6672

PIC ID: 5958.5

PERFORMER ORGANIZATION: Health Economics Research, Inc. Waltham, MA