Although pay-for-performance (P4P) is being widely adopted, little is known about how different P4P strategies affect provider payment. These differences may be essential in motivating and maximizing quality improvement across all providers. We review hospitals' P4P strategies and describe differences in payments by size of reward; payment differences between high- and low-performing providers; ability to reward improvement in the absence of high performance; and the percentage of payments based on performance. Bonuses vary considerably by payment strategy, which suggests that the strategy selected should vary depending on program goals. These findings are relevant to P4P for any type of provider.
Interventions to transform primary care practices into medical homes are increasingly common, but their effectiveness in improving quality and containing costs is unclear.To measure associations between participation in the Southeastern Pennsylvania Chronic Care Initiative, one of the earliest and largest multipayer medical home pilots conducted in the United States, and changes in the quality, utilization, and costs of care.Thirty-two volunteering primary care practices participated in the pilot (conducted from June 1, 2008, to May 31, 2011). We surveyed pilot practices to compare their structural capabilities at the pilot's beginning and end. Using claims data from 4 participating health plans, we compared changes (in each year, relative to before the intervention) in the quality, utilization, and costs of care delivered to 64,243 patients who were attributed to pilot practices and 55,959 patients attributed to 29 comparison practices (selected for size, specialty, and location similar to pilot practices) using a difference-in-differences design.Pilot practices received disease registries and technical assistance and could earn bonus payments for achieving patient-centered medical home recognition by the National Committee for Quality Assurance (NCQA).Practice structural capabilities; performance on 11 quality measures for diabetes, asthma, and preventive care; utilization of hospital, emergency department, and ambulatory care; standardized costs of care.Pilot practices successfully achieved NCQA recognition and adopted new structural capabilities such as registries to identify patients overdue for chronic disease services. Pilot participation was associated with statistically significantly greater performance improvement, relative to comparison practices, on 1 of 11 investigated quality measures: nephropathy screening in diabetes (adjusted performance of 82.7% vs 71.7% by year 3, P < .001). Pilot participation was not associated with statistically significant changes in utilization or costs of care. Pilot practices accumulated average bonuses of $92,000 per primary care physician during the 3-year intervention.A multipayer medical home pilot, in which participating practices adopted new structural capabilities and received NCQA certification, was associated with limited improvements in quality and was not associated with reductions in utilization of hospital, emergency department, or ambulatory care services or total costs over 3 years. These findings suggest that medical home interventions may need further refinement.
Abstract We sought to explore the heterogeneity among patients hospitalized with pneumonia, a condition targeted in payment reform. In a retrospective cohort study of Medicare beneficiaries hospitalized for pneumonia, we compared postacute care utilization and costs of 90‐day episodes of care among patients with and without comorbidities of chronic obstructive pulmonary disease (COPD) and/or heart failure. Of the 1,926,674 discharges, 28.1% had COPD, 14.3% had heart failure, and 14.6% carried both diagnoses. Patients with pneumonia were more likely to be discharged to a facility than those with pneumonia and COPD with or without heart failure, though less likely than those with pneumonia and heart failure only. Compared to patients with pneumonia only, patients with COPD and/or heart failure had higher episode payments. Acute conditions such as pneumonia may hold promise for episode‐based care payment reform; however, the heterogeneity within this diagnosis indicates the need to consider other patient characteristics in interventions to improve value‐based care.
Nursing homes serve both long-term care and post-acute care (PAC) patients, two groups with distinct financing mechanisms and requirements for care. We examine empirically the effect of nursing home specialization in PAC using 2011–2018 data for Medicare patients admitted to nursing homes following a hospital stay. To address patient selection into specialized nursing homes, we use an instrumental variables approach that exploits variation over time in the distance from the patient’s residential ZIP code to the closest nursing home with different levels of PAC specialization. We find that patients admitted to nursing homes more specialized in PAC have lower hospital readmissions and mortality, longer nursing home stays, and higher Medicare spending for the episode of care, suggesting that specialization improves patient outcomes but at higher costs.
Safety-net hospitals (ie, those that predominantly treat poor and underserved patients) often have lower quality of care than non-safety-net hospitals. While public reporting and pay for performance have the potential to improve quality of care at poorly performing hospitals, safety-net hospitals may be unable to invest in quality improvement. As such, some have expressed concern that these incentives have the potential to worsen existing disparities among hospitals.To examine trends in disparities of quality of care between hospitals with high and low percentages of Medicaid patients.Longitudinal study of the relationship between hospital performance and percentage Medicaid coverage from 2004 to 2006, using publicly available data on hospital performance. A simulation model was used to estimate payments at hospitals with high and low percentages of Medicaid patients.Changes in hospital performance between 2004 and 2006, estimating whether disparities in hospital quality between hospitals with high and low percentages of Medicaid patients have changed.Of the 4464 participating hospitals, 3665 (82%) were included in the final analysis. Hospitals with high percentages of Medicaid patients had worse performance in 2004 and had significantly smaller improvement over time than those with low percentages of Medicaid patients. Hospitals with low percentages of Medicaid patients improved composite acute myocardial infarction performance by 3.8 percentage points vs 2.3 percentage points for those with high percentages, an absolute difference of 1.5 (P = .03). This resulted in a relative difference in performance gains of 39%. Larger performance gains at hospitals with low percentages of Medicaid patients were also seen for heart failure (difference of 1.4 percentage points, P = 0.04) and pneumonia (difference of 1.3 percentage points, P <.001). Over time, hospitals with high percentages of Medicaid patients had a lower probability of achieving high-performance status. In a simulation model, these hospitals were more likely to incur financial penalties due to low performance and were less likely to receive bonuses.Safety-net hospitals tended to have smaller gains in quality performance measures over 3 years and were less likely to be high-performing over time than non-safety-net hospitals. An incentive system based on these measures has the potential to increase disparities among hospitals.
Some research suggests that risk adjustment plays a substantial role in explaining the high levels of government spending on Medicare Advantage (MA). We studied whether the reliance on diagnosis codes to risk-adjust payments to MA plans leads to the inflation of submitted diagnoses. Our approach relied on a comparison among diagnoses included in hospital claims, health status measures from similarly timed health assessments completed by skilled nursing facility (SNF) clinicians, and short-term mortality data. SNF assessments are completed for both MA and traditional Medicare enrollees and, in contrast to diagnoses in claims, cannot be directly manipulated by MA plans or inform their payments. We found that among patients with the same assessment-based health status discharged to the same SNF, claims-based disease scores were 4.1 percent higher for MA enrollees, on average, relative to traditional Medicare enrollees. However, short-term mortality risk was, on average, 8.8 percent lower for MA enrollees. About 60 percent of the payer-based difference in disease scores was attributable to MA chart review updates to diagnoses, and additional codes from chart reviews were unrelated to assessment-based health status. Given the growth of MA and current spending on the program, which reached $321 billion in 2021, this evidence of potential coding inflation may have large fiscal implications.
