In this analysis, we explore differences in the composition of PAC episodes using 18 different episode definitions. These episode definitions fall into two broad categories: fixed episodes and variable length episodes. Fixed episodes are calculated based on claims that occur within fixed windows of time following index acute hospital discharge. Our analysis of fixed episode definitions included 30 day, 60 day, or 90 day periods following acute hospital discharge. In contrast, variable length episodes included all claims prior to a gap of X days with no acute or PAC service use (including LTCHs, SNFs, IRFs, HHAs, and hospital outpatient therapy). Our analyses included an examination of variable length episode definitions defined by a 30 day, 45 day, or 60 day gap in service use. An alternative end point to each of the episode definitions is acute hospital readmission. Figure 1 provides a schematic of the differences between the fixed and variable length episode definitions.
Figure 1. Fixed versus Variable Length Episodes
Figure 1 This is a flow schematic of Fixed versus Variable Length Episodes.
Our analyses considered two methods for defining the end point of fixed episodes. The first method allows any claim initiating within a fixed period to be included in the episode definition. For example, using this method, the entirety of a 60 day home health claim initiating 25 days after acute hospital discharge would be included in the 30 day fixed episode definition. In the second method, we prorated claims so that only PAC days within 30 days of hospital discharge (and their associated dollars) were included in the episode definition. Using the example of the 60 day home health claim initiating 25 days after acute hospital discharge, under the prorated methodology, only visits occurring during the first 5 days of the home health claim (up to day 30 after acute hospital discharge) would be included in the 30 day fixed episode definition. Medicare payments per visit were estimated by dividing the total claim Medicare payment amount by the total number of visits on the claim. Similarly, in the case of inpatient PAC claims, dollars per day were calculated by dividing the total Medicare payment amount on the claim by the length of stay. Figure 2 provides a schematic of the differences between methods of defining the end points in fixed episodes.
Figure 2. Defining End Points of Fixed Episodes
Figure 2 This is a flow schematic of Defining End Points of Fixed Episodes.
Each of the episode definitions was examined in order to learn more about the percentage of beneficiaries using services under each of the definitions and the corresponding length of stay and payments for different PAC services. Payments were calculated for three different denominators: payments per service user, payments per PAC user, and payments per hospital discharge to demonstrate the differences in mean payments across different beneficiary samples.
- Payments per service user indicate the mean Medicare payments for those beneficiaries who use the specific PAC service (average payments per SNF admission for those who had a SNF admission).
- Payments per PAC user indicate the mean Medicare payments across all beneficiaries who use any PAC, regardless of whether or not they use a specific PAC service.
- Payments per hospital discharge indicate the mean Medicare payments across all beneficiaries with an index acute hospital stay, regardless of whether they use a PAC service.
Table 1 describes each of the episode definitions and shows the mean episode payments per index acute hospital discharge and per PAC user for the 18 different definitions included in our analyses. In addition to the data presented in this report, episode analyses were also conducted at the MS-DRG level for each of the episode definitions. We restrict the tables included here to the most frequent or high-cost MS-DRGs, but this analysis demonstrates the difference in expected use and cost for different types of conditions, particularly between those admitted to the hospital for medical versus surgical treatments.