Episodes of Care begin with a healthcare “event,” such as a knee replacement surgery, and extend throughout a window of time when a patient receives healthcare services following that event.
August 2018
[Download the full version of this brief]
HOW ARE EPISODES OF CARE DATA USED?
EoC data are relevant for developing and updating healthcare payment policies such as:
- Bundled payments
- MACRA – Medicare Access and CHIP Reauthorization Act
- MIPS – Merit-based Incentive Payment System
- APMs – Alternative Payment Models
TAKEAWAYS FROM OUR RESEARCH ON SURGICAL EoC:
1. Large payment variations exist in Medicare payments for EoC. Medicare payments can vary 40–60% for the same surgery.
2. Payment variation is predominantly driven by five factors:
- Procedure(s) performed
- Complications
- Patient complexity
- Post acute care use
- Readmissions
3. Drivers of payment variation differ across hospitals. Hospitals need access to comprehensive data on their own EoCs to address variations.
4. Patient complexity causes differences in bonuses and penalties that hospitals may receive. Patient complexity includes factors like age, health conditions, or socioeconomic status.
WHAT DOES ALL OF THIS MEAN FOR POLICY DISCUSSIONS?
As the Centers for Medicare & Medicaid Services (CMS) continues to pursue payment reform around episodes of care, several factors should be considered:
- These programs should incorporate risk adjustment to account for hospitals that care for complex patients.
- CMS should provide all hospitals access to EoC data so they can evaluate ways to improve care and decrease unnecessary costs.
- For each clinical condition in an EoC, CMS should tailor the payment incentives to the specific sources of variation in that condition.
- CMS should continually evaluate payment variation and rebalance incentives/payments when needed.
For more information, please contact Eileen Kostanecki, IHPI’s Director of Policy Engagement & External Relations, at [email protected] or 202-554-0578.
Episode-based Payment Variation for Urologic Cancer Surgery Ellimoottil C, Li J, Ye Z, Dupree JM, Min HS, Kaye D, Herrel LA, Miller DC. Urology. 2018 Jan;111:78-85. PMID: 29051001 doi.org/10.1016/j.urology.2017.08.053
Drivers of Payment Variation in 90-Day Coronary Artery Bypass Grafting Episodes Guduguntla V, Syrjamaki JD, Ellimoottil C, Miller DC, Prager RL, Norton EC, Theurer P, Likosky DS, Dupree JM. JAMA Surg. 2018 Jan 1;153(1):14–19. PMID: 28832865 doi.org/10.1377/hlthaff.2017.0940
Risk Adjustment May Lessen Penalties On Hospitals Treating Complex Cardiac Patients Under Medicare's Bundled Payments Markovitz AA, Ellimoottil C, Sukul D, Mullangi S, Chen LM, Nallamothu BK, Ryan AM. Health Aff (Millwood). 2017 Dec;36(12):2165-2174. PMID: 29200351 doi.org/10.1001/jamasurg.2017.2881
Implications of the Definition of an Episode of Care Used in the Comprehensive Care for Joint Replacement Model Ellimoottil C, Ryan AM, Hou H, Dupree JM, Hallstrom B, Miller DC. JAMA Surg. 2017 Jan 1;152(1):49-54. PMID:27682525 doi.org/10.1001/jamasurg.2016.3098
Identifying Drivers of Episode Cost Variation With Radical Prostatectomy Herrel LA, Syrjamaki JD, Linsell SM, Miller DC, Dupree JM. Urology. 2016 Nov;97:105-110. PMID: 27496300 doi.org/10.1016/j.urology.2016.05.071
Medicare's New Bundled Payment For Joint Replacement May Penalize Hospitals That Treat Medically Complex Patients Ellimoottil C, Ryan AM, Hou H, Dupree J, Hallstrom B, Miller DC. Health Aff (Millwood). 2016 Sep 1;35(9):1651-7. PMID: 27605647 doi.org/10.1377/hlthaff.2016.0263
Medicare's Bundled Payments for Care Improvement initiative: expanding enrollment suggests potential for large impact Chen LM, Meara E, Birkmeyer JD. Am J Manag Care. 2015 Nov;21(11):814-20. PMID: 26633254
Variations in Medicare payments for episodes of spine surgery Schoenfeld AJ, Harris MB, Liu H, Birkmeyer JD. Spine J. 2014 Dec 1;14(12):2793-8. PMID: 25017141 doi.org/10.1016/j.spinee.2014.07.002
Large variations in Medicare payments for surgery highlight savings potential from bundled payment programs Miller DC, Gust C, Dimick JB, Birkmeyer N, Skinner J, Birkmeyer JD. Health Aff (Millwood). 2011 Nov;30(11):2107-15. PMID: 22068403 doi.org/10.1377/hlthaff.2011.0783