This analysis found a heterogeneous pattern of changes in mortality rates with small increases for high-risk medical admissions but marked decreases in mortality rates following hip or knee replacement and marked increases in mortality following coronary artery bypass graft surgery. This uncertainty has led to third-party payers moving towards prospective payment methodologies. Prospective payment systems have become an integral part of healthcare financing in the United States. Disease severity was defined with the Disease Staging methodology and was used to form a patient classification system based on mortality risk. This report was prepared under contract #18-C-98641 between the U.S. Department of Health and Human Services (HHS), Office of Social Services Policy (now known as the Office of Disability, Aging and Long-Term Care Policy) and the Urban Institute. Washington, D.C. 20201, Biomedical Research, Science, & Technology, Long-Term Services & Supports, Long-Term Care, Prescription Drugs & Other Medical Products, Collaborations, Committees, and Advisory Groups, Physician-Focused Payment Model Technical Advisory Committee (PTAC), Office of the Secretary Patient-Centered Outcomes Research Trust Fund (OS-PCORTF), Health and Human Services (HHS) Data Council, Effects of Medicare's Hospital Prospective Payment System (PPS) on Disabled Medicare Beneficiaries: Final Report, HOSPITAL LOS, BY TERMINATION STATUS OF HOSPITAL STAY. Krakauer concluded that "overall, no adverse trends in the outcomes of the medical care provided Medicare beneficiaries are discernible as yet.". Hence, our decision rule probably produced lower rates of post-acute Medicare SNF and HHA utilization rates. The retrospective payment system model requires an in-person visit or a telemedicine visit for conditions that allow for remote treatment. Post-acute use of SNF or HHA did not influence either hospital readmission or mortality rates. I am a relatively new student and I contacted financial aid regarding my upcoming disbursement. We also discuss significant changes in utilization for each of these GOM subgroup types. The purpose of this study was to examine the effects of PPS on the subgroup of Medicare beneficiaries who were functionally disabled. Hospital LOS. We wish to thank many people who helped us throughout the course of this project. While differences in mortality were not statistically significant, they suggest an increase in hospital and SNF mortality and corresponding mortality decreases in HHA other settings. In terms of outcomes of hospital use related to quality of care, no difference in overall readmissions or mortality pre- and post-PPS were found. By following these best practices, prospective payment systems can be implemented successfully and help promote efficiency, cost savings, and quality care across the healthcare system. There were indications of service substitution between hospital care and SNF and HHA care. While this group is relatively healthier in terms of chronic functional and health problems they will still experience, at a lower rate, serious and acute medical problems. It is apparent that both rates of hospital discharge to HHA and hospital LOS prior to discharge were different between the two time periods. Humphrey Building, 200 Independence Avenue, SW, Washington, DC 20201. lock Comparisons were then made between the expected (severity adjusted) mortality rate and the observed 1985 mortality rates. Their hypothesis was that, after PPS, elderly patients hospitalized for hip fractures would receive shorter, less care-intensive hospitalization and would be institutionalized (in nursing homes) more frequently. A DRG is a statistical system of classifying any inpatient stay into groups for the purposes of payment. The IPPS pays a flat rate based on the average charges across all hospitals for a specific diagnosis, regardless of whether that particular patient costs more or less. This limitation restricted inferences about case-mix changes of hospital admissions, because lighter care patients who might have been admitted to inpatient hospital care were treated in outpatient facilities instead. That is, some hospital admissions result in death in the hospital; these cases would not be eligible for hospital readmission. Sociological Methodology, 1987 (C. Clogg, Ed.). This study examined hospitalization rates and hospital lengths of stay and location of death of the Medicaid patients. Please enable it in order to use the full functionality of our website. Table 11 presents the patterns of service use for the "Severely Disabled" group, which was characterized by heavy ADL dependency, neurological problems, stroke, and senility. Second, for each profile defined in the analysis, weights are derived for each person, ranging from 0 to 1.0 (and summing to 1.0) reflecting the extent to which a given individual resembles each of the profiles. Presented at the APHA Annual Meeting, New Orleans, Louisiana, October 20. Post-hospital use of Medicare skilled nursing facilities did not increase, as might be expected in light of PPS incentives to substitute post-acute nursing home days for hospital days. Iezzoni, L.I. Episodes were defined as periods of service use according to dates coded on the Medicare Part A bills. Discusses health reimbursement issues and includes an accurate and detailed explanation of the key aspects of the topic Provide an in-depth analysis that demonstrates a good understanding of challenges of healthcare reimbursement concepts Conduct comprehensive research that provides . Detailed service-specific, casemix information (e.g., DRGs) was unavailable for comparison in pre- and post-PPS observation periods. This distribution across time periods allowed before-and-after comparisons among patient groups. Table 5 presents the discharge patterns of individuals who experienced Medicare SNF use pre- and post-PPS and the length of stay in Medicare SNFs. Houchens. Finally, the analysis was not specifically designed to evaluate the effects of PPS on the need for or use of "aftercare" in the community. The introduction of prospective payment systems marked a significant shift in how healthcare is financed and provided, replacing the traditional cost-based system of reimbursements. Across all of these measures, mortality declined for all five patient groups. In a second study, Krakauer (HCFA, 1987) analyzed the effectiveness of care provided to Medicare beneficiaries during hospitalization and thereafter in 1983-85. Further research on the community services, nursing home use and other periods of care would be necessary to develop a complete picture of the effects of PPS on impaired Medicare beneficiaries. When a system underperforms, stepping back and re-thinking processes can have a dramatic impact. The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. In addition, a small increase in the rate of hospital readmission was suggested by SNF discharges to hospitals for the subgroup of severely ADL dependent persons. Determining the seriousness of this problem requires further monitoring and study. For these samples, Medicare Part A bills on hospital, skilled nursing facility (SNF) and home health service (HHA) use were obtained from the Health Care Financing Administration (HCFA). This report describes a study to measure changes in the pattern of Medicare service use resulting from the implementation of the prospective payment system (PPS) for Medicare hospital reimbursement. Life Table Analysis. PPS is intended to motivate healthcare providers to structure cost-effective, efficient patient care that avoids unnecessary services. The specific aims of this study were to measure changes in Medicare service use and to evaluate the effects of these changes on quality of care in terms of hospital readmission and mortality. The proportion of persons with no readmissions were 65.0%, 65.8% and 67.3% for the three years. Moreover, membership in this group is also associated with a 70 percent chance of being incontinent. Additionally, it helps promote greater equity in care since all patients receive similar quality regardless of their provider choices. The pre-PPS period was the one-year window from October 1, 1982 through September 30, 1983. Medicares prospective payment system (PPS) did not lead to significant declines in the quality of hospital care. The first part presents a general context of mortality and Medicare service use of the various subgroups of the total Medicare beneficiary population based on the total population screened for the NLTCS. Under PPS, hospitals receive a fixed amount for treating patients diagnosed with a given illness, regardless of the length of stay or type of care received. After making a selection, click one of the export format buttons. Results of our study provided further insights on the effects of PPS on utilization patterns and mortality outcomes in the two periods of time. However, because it contained incentives for hospitals to shorten stays and to choose the least expensive methods of care, PPS raised concerns about possible declines in the quality of care for hospitalized Medicare patients. Home health episodes were significantly different with overall LOS decreasing from 108 days to 63 days. Conclusions in this report are solely those of the authors, and do not necessarily reflect the view of the Urban Institute, Duke University, or the Department of Health and Human Services. and S. Harrison. For example, use of the PAS data precluded measurement of post-discharge mortality figures. JavaScript is disabled for your browser. In this study, hospital readmission and mortality were viewed as indicators of quality of care. Hence a person who is 0.5 like the first profile and 0.5 like the second profile would have service use life tables that, likewise, are weighted combinations of the life tables for the first and second profiles. Prospective payment systems offer numerous advantages that can benefit both healthcare organizations and patients alike. Different By accurately estimating the costs of services provided, a prospective payment system can help prevent overpayment. Prospective payment systems are designed to incentivize providers to establish delivery systems that offer high quality patient care without overtaxing available resources. The second analysis strategy focused on outcomes subsequent to hospital admission. We selected episodes rather than Medicare beneficiaries because beneficiaries could experience different numbers of episodes of one type of care (e.g., hospital) and different patterns of multiple service use episodes (e.g., hospital, SNF, HHA) during a 12-month period. "The DRGs classify all human diseases according to the affected organ system, surgical procedures performed on patients, morbidity, and sex of the patient. Hence, the results of this analysis provides a representative picture of differences in pre- and post-PPS patterns of Medicare service use, in terms of service types and each episode of any given service type experienced by Medicare beneficiaries. This analysis examines the changes in length of stay and termination status of episodes of each of these Medicare services between the two time periods without regard to the interrelation of events. This suggests a reduction in hospital readmission from SNFs since most SNF stays are preceded by hospital stays. This week you will, compare and contrast prospective payment systems with non-prospective payment systems. GOM analysis is a multivariate technique that combines two types of analyses usually performed separately (Woodbury and Manton, 1982). The second component is a grade or weight for each person representing how much each person is described by the characteristics associated with a given case-mix dimension. In this way they are distinct from DRGs, for example, which differentiate the acute care requirements of persons being admitted to hospitals. ForeSee Medicals risk adjustment software for Medicare Advantage supports prospective workflows, integrates seamlessly with your EHR, and gives you accurate decision support at the point of care or before. Prospec For this potentially vulnerable group, because of the detailed survey information, we will be able to control for detailed chronic health and functional status characteristics. 1982: 287 days1984: 287 days* Adjusted for competing risks of readmission and end of study. In the following sections on Medicare service use, these GOM groups are used to adjust overall utilization differences between pre- and post-PPS periods. The Outpatient Prospective Payment System (OPPS) is the system through which Medicare decides how much money a hospital or community mental health center will get for outpatient care to patients with Medicare. Significant differences were detected for this group in terms of lower rates of being admitted from the community directly to HHA services and higher rates of dying in "other" types of episodes. Share sensitive information only on official, secure websites. "Post-hospital Care Before and After the Medicare Prospective Payment System." Employee representatives, for the purposes of filing a complaint, are defined as any of the following: a. RAND is nonprofit, nonpartisan, and committed to the public interest. For example, for hospital episodes there was a large decline in the "Severely ADL Dependent" (i.e., from 20.3% to 16.9%) but increases in the "Oldest-Old" and "Heart and Lung" suggesting an increase in the medical acuity of the population with a significant reduction in seriously impaired persons with less medical acuity. Except for acute care hospital settings, Medicare inpatient PPS systems are in their infancy and will be experiencing gradual revisions. Second, to provide current information about the effects of Medicares payment methods on quality of care, clinically detailed data should be collected to monitor sickness at admission, processes of care, discharge status, and outcomes on a regular basis as long as PPS is in place. These value-based care models promote doctors, hospitals, and other providers to work together to receive value-based reimbursements from CMS. Both payers and providers benefit when there is appropriate and efficient alignment of risk. Overall mortality differences were not found between the two periods, although some differences were found in the patterns of mortality by service settings. First, we examined the proportion of hospital admissions that resulted in readmissions during the one year windows of observation. Changes in LOS of the nondisabled may be compared with the decline in hospital LOS for persons in institutions (from 12.0 to 10.0 days) and for the community disabled elderly (from 11.6 to 10.4 days). This increase in HHA use was significant even after adjustments were made for the chronic health and functional status differences between the four GOM defined subpopulations. Continuous Medicare Part A bills permitted a tracking of persons in the NLTCS samples through different parts of the health care system (i.e., Medicare hospital, SNF and HHA) so that we could examine transitions from acute care hospitals to subsequent experience in Medicare SNF or HHA services. However, since our objective in this study was to measure pre- and post-PPS changes in utilization, the application of a uniform definition for both study periods produced comparable measures for the two periods. Table 4 indicates that, while HHA admissions from hospitals increased, the LOS in hospitals prior to HHA admissions decreased between pre- and post-PPS periods. Under cost-based reimbursement, patients' insurance companies make payments to doctors and hospitals based on the costs of the care provided to the patients. Finally, as indicated by the researchers, these analyses measured the short-term effects of PPS; utilization and outcome measures beyond 1984 could also yield different conclusions. Because the coefficients are estimated using maximum likelihood procedure (Woodbury and Manton, 1982), the procedure provides a statistical criterion for selecting the best value of K. This criterion is a X2 value (calculated as twice the change in the log-likelihood function) describing the statistical significance of the K + l dimension, i.e., whether the 's are closer to the xijl's than could be expected by chance when the K + l group is added. For a one-stop resource web page focused on the informational needs and interests of Medicare Fee-for-Service (FFS) providers, including physicians, other practitioners and suppliers, go to the Provider Center (see under "Related Links" below). In 1985, the corresponding rates were 6.8 percent and 21.2 percent. Stern, R.S. Data for this study were derived from hip fracture patients at a 430 bed, university-affiliated municipal hospital that primarily served indigent persons in Indianapolis, Indiana. Table 15 also presents, for persons who died, the proportion of deaths that occurred within 30 and 90 days in the given type of episode. In a second case, the "Severely Disabled" group with no Medicare post-acute services, there was also a longer expected duration prior to hospital readmission in the post-PPS period, and generally lower risks of readmission at different intervals after the initiating hospital admission. Hospitalization data were available from the Wisconsin Medicaid program for the period from 1982 through 1984, while mortality data were obtained for the years 1980 through 1985. Second, the GOM groups represent potentially vulnerable subsets of the total disabled elderly population according to functional and health characteristics. In addition to employing the GOM subgroups to adjust for overall utilization changes before and after PPS, we examined differences in the effects of PPS on the specific subgroups among the disabled elderly population. By summing the individual case weights per GOM profile per case, it was possible for us to determine whether there was a shift in the cases that resembled each of the GOM subgroups (shift in the distribution of GOM scores between 1982 and 1984). Samples of the Medicare utilization information for the community disabled individuals from the 1982 and 1984 NLTCS were drawn for analysis. It was not possible to conduct a controlled experiment, since the entire country was placed under PPS at the same time. Section D discusses hospital readmission patterns by examining rates of readmission at specific intervals after hospital admission. Draper, David, William H. Rogers, Katherine L. Kahn, Emmett B. Keeler, Ellen R. Harrison, Marjorie J. Sherwood, Maureen F. Carney, Jacqueline Kosecoff, Harry Savitt, Harris Montgomery Allen, Lisa V. Rubenstein, Robert H. Brook, Carol P. Roth, Carole Chew, Stanley S. Bentow, and Caren Kamberg, Effects of Medicare's Prospective Payment System on the Quality of Hospital Care. Moreover, SNF episodes for this group had an increase in the proportion that were discharged to the other settings. In general, our results on the impaired elderly are consistent with findings from other studies that examined PPS effects on the total Medicare population. Type I would appear to be the least vulnerable to inappropriate outcomes of hospital admissions--principally because of their overall good health. In a comparison of the pre- and post-PPS periods, the proportion of persons with hospital admissions who eventually died in the 12-month period remained about the same--12.1% in 1982-83 and 12.5% in 1984-85. These groups represent distinct subsets of medical and functional states of Medicare beneficiaries reflecting the multiple comorbidities of elderly persons which may be expected to be associated with service use patterns and possible negative outcomes of care such as hospital readmission and mortality. Episodes of hospital, SNF, HHA and all other episodes were drawn proportionally to the number of each type of service status available. Finally, our use of the Medicare enrollment files allowed us to measure mortality when individuals were receiving Medicare Part A services and also when they were not. The authors posited two possible explanations for the increased hospitalization of institutionalized persons: (1) physician manipulation of PPS by discharging nursing home residents only to have them scheduled for readmission at a later date and (2) shorter hospital stays representing premature hospital discharges that resulted in more frequent rehospitalizations. A higher rate of other episodes terminating in deaths among the oldest-old suggests that Medicare service use changed for this group. For initial hospitalizations followed by SNF use, the risks of readmission to a hospital increased from 7.3 percent to 9.2 percent for the 0-30 days interval and from 31 percent to 33.2 percent for the 0-90 day interval. The broad focus of prospective payment system PPS on patient care contrast favorably to the interval care more prevalent in other long-established payment methods. Episodes of Service Use. Mortality. The prospective Payment System (PPS) represents a fundamental change in the way the United States government reimburses hospitals for medical services covered under Medicare, a federal health care insurance program for the elderly and disabled. The mortality increases that do exist are of the magnitude that could be caused by year to year changes in national mortality patterns found in Figure 1. For each disease, readmission rates were unchanged; a slightly but not significantly higher percentage of patients who had been admitted from home were discharged to nursing care facilities. "Prospective Payment System on Long Term Care Providers." It doesn't matter how the property passes to the inheritor.State Supplemental Pay System Page 7 Recommendations: 1. Of the hospital episodes with a subsequent SNF stay, there was a decline in the proportion of deaths for the one year observation period. Post Acute HHA Use. The results have been surprising" says industry expert Dr. Tom Davis, who strongly believes prospective review will be the industry standard. Table 9 presents the patterns of Medicare Part A service use episodes for the "Oldest-Old" subgroup, which was characterized by a 50 percent likelihood of being over 85 years of age, hip fracture and cancer and with many ADL problems. Additional payments will also be made for the indirect costs of medical education. Type III, which we will refer to as "Heart and Lung Problems," has mild ADL dependencies, such as bathing, and IADL dependencies. They could include, for example, no services, Medicaid nursing home stays and Medicare outpatient care. Per diem rate for each of four levels of care: Geographic wage adjustments determine the only variation in payment rates within each level. The higher post-PPS probability of hospital readmission was also found for the 15-29 day interval after hospital admission. In summary, we found that hospital lengths of stay decreased between 1982-83 and 1984-85 for the subgroup of disabled, non-institutionalized Medicare beneficiaries, but that much of this chance was attributable to case-mix changes. Further research on the community services, nursing home use and other types of care would be necessary to develop a complete picture of the effects of PPS on disabled Medicare beneficiaries. The life tables for the total population can be derived by employing the case-mix weights (i.e., the gik) actually calculated for each person. The GOM subgroups derived are based on much broader criteria involving chronic health problems than the diagnostic related groups (DRG's) employed in the actual PPS reimbursement system. Specifically, principal disease accounted for approximately 46 percent of the change in mortality from 1984 to 1985, while the severity of principal diseases explained an additional 35 percent of the 1984-85 change. Results from this analysis included findings that total Medicare discharges and length of stay of Medicare hospital patients decreased in the post-PPS period. The authors pointed out that despite shorter stays and less rehabilitation, their results did not unequivocally demonstrate that patients were less ambulatory at hospital discharge, and that differences in the severity of comorbidity, for example, might have explained the differential referral rate to nursing homes in the two periods. Relative to the entire population of disabled Medicare beneficiaries, Type I individuals are young, with only 10 percent being over 85 years of age. This group also has the highest rates of prior nursing home use (22%) compared to the sample average (10%). Life table methodology permits the derivation of duration specific schedules of the occurrence of events, such as the probability of a discharge to a SNF after a specific number of days of hospital stay. Abstract In a longitudinal panel study design, 80 hospitals in Virginia were selected for analysis to test the hypothesis that the introduction of the prospective payment system (PPS) in October 1983 had helped hospitals enhance their operational performance in technical efficiency. Dittus. An important parameter in the analysis is the number of case-mix dimensions (i.e., K). Specific documentation supports coding and reporting of Patient Safety Indicators (PSIs) developed by the Agency for Healthcare Research and Quality (AHRQ). Thus the GOM defined groups are distinctly different subgroups of the disabled elderly population, ranging from persons with mild disability to severely disabled individuals. At the time the study was conducted, data were not available to measure use of Medicare Part B services. For the analyses where utilization patterns were examined for specific case-mix groups, specialized cause elimination life table methodologies were developed to derive life table functions for each of the case-mix subgroups.
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