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ABSTRACT

This project is taking a building block approach to examine alternative episode definitions to better align performance measures, incentives, payments and accountability within Medicare fee-for service in the near term and examining options for moving toward broader episode-based reforms to encourage high quality, efficient and coordinated care. The episode is used as the unit of analysis. The project includes an environmental scan, a technical expert panel for review and input of deliverables in the project, analyses of grouped Medicare claims data using two commercial grouper software products and the development of a conceptual analytic piece.

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TABLE OF CONTENTS

EXECUTIVE SUMMARY

• Existing Medicare Provider Payment Approaches
• Performance Measures Currently Reported to Medicare
• Proposed Uses and Current Applications of Episodes of Care
• Findings from Exploratory Analyses of Constructed Episodes
• Potential Applications of Episodes of Care Along a Continuum of Policy Reform Options
• Future Research and Demonstration Opportunities

TABLE OF CONTENTS

TABLE OF TABLES

TABLE OF FIGURES

ACKNOWLEDGMENTS

ABBREVIATIONS

1. INTRODUCTION

• The Cost and Quality Problem
• Goal of This Study
• The Potential Use of Episodes of Care as a Unit of Measure
• About This Report

2. MEDICARE PAYMENT POLICY

3. PERFORMANCE MEASURES REPORTED TO MEDICARE

• Cataloging the Set of Performance Measures Contained in CMS Performance Measurement Systems
• Alignment and Coordination of Performance Measures Across Medicare Provider Settings
• Summary

4. LITERATURE REVIEW AND EXPERT DISCUSSIONS

• Methods
  
• Results
  
• The Application of Episodes of Care
  • Episodes of Care for Performance Measurement
  • Episodes of Care for Payment
• Types of Episode of Care Constructions that Have Been Proposed or which Are in Use
  • Types of Episode Constructions that Have Been Used
  • Types of Episode Constructions that Have Been Proposed for Use
  • Summary: Episode Construction
• Attributing Episodes of Care to Providers
  • Summary: Attribution of Accountability
• Risk Adjustment of Episodes of Care for Payment and Performance Measurement
• Expert Discussions
• Summary of Findings from Literature Review and Expert Discussions

5. ANALYSIS OF EPISODES OF CARE

• Overview of the Analytic Sample
• Nine Conditions Selected for Analysis
• Overview of Analyses Conducted
• Results of Quantitative Analyses of Episodes of Care
• Summary

6. CONCLUSION

• Key Findings and Implications
• Potential Applications of Episodes of Care Along a Continuum of Policy Reform Options
• Next Steps: Future Research and Demonstration Work

APPENDIX A. DIAGNOSIS AND PROCEDURE CODES TO IDENTIFY CONDITIONS OF FOCUS

APPENDIX B.  SPECIFICATIONS USED TO CREATE EPISODES

APPENDIX C. EPISODES RELATED TO CONDITIONS OF FOCUS

APPENDIX D. STANDARDIZED PAYMENT METHODOLOGY

APPENDIX E. SETTINGS INVOLVED IN EPISODES, BY CONDITION AND MEASURES REPORTED TO MEDICARE REPORTING PROGRAMS

APPENDIX F. DEFINING PROFESSIONAL COSTS AND EVALUATION AND MANAGEMENT (E&M) VISITS

REFERENCES

TABLE OF TABLES

• Table 1. Medicare’s Payment Systems by Setting (as of 11/2008)
• Table 2. Number of Performance Measures Reported to Medicare as of 11/2008, By Measure Type and Program
• Table 3. Performance Measures Reported to Medicare as of 11/2008, By Setting
• Table 4. Conditions, Diseases and Procedures Covered By Measures Reported to Medicare (as of November 1, 2008)*
• Table 5. Measures for Conditions Addressed by Multiple Reporting Programs (as of November 1, 2008)*
• Table 6. Comparison of Algorithms for Assignment of Patients to Physicians
• Table 7. Summary Statistics for Continuously Enrolled Beneficiaries
• Table 8. Summary Statistics for Continuously Enrolled Beneficiaries
• Table 9. Number and Percent of Beneficiaries with Conditions of Focus
• Table 10. Common Episodes Experienced Not Related to Condition of Focus, Selected Conditions
• Table 11. Select Combinations of ETG Episodes for Beneficiaries Diagnosed with AMI
• Table 12. Process and Outcome Measures Reported to CMS Applicable to AMI Patients
• Table 13.  Process and Outcome Measures Reported to CMS Applicable to Diabetes Patients
• Table 14.   Application of PQRI Prevention/Screening Measures to Conditions of Interest
• Table 15. Application of SNF and Home Health Measures to Conditions of Interest
• Table 16: Design Characteristics of Episode-Based Attribution Rules
• Table 17. Percent of Episodes Assigned Using Various Attribution Rules, ETGs
• Table 18. Percent of Payments from Services Provided by Attributed Providers
• Table E1. Process and Outcome Measures Reported to CMS Applicable to AMI Patients
• Table E2. Process and Outcome Measures Reported to CMS Applicable to Diabetes Patients
• Table E3. Process and Outcome Measures Reported to CMS Applicable to Hip Fracture Patients
• Table E4. Process and Outcome Measures Reported to CMS Applicable to Bacterial Pneumonia Patients
• Table E5. Measures Reported to CMS Applicable to Breast Cancer Patients
• Table E6. Process and Outcome Measures Reported to CMS Applicable to Cerebrovascular Patients
• Table E7. Process and Outcome Measures Reported to CMS Applicable to COPD Patients
• Table E8. Process and Outcome Measures Reported to CMS Applicable to CHF Patients
• Table E9. Process and Outcome Measures Reported to CMS Applicable to Low Back Pain Patients

TABLE OF FIGURES

• Figure 1: Overview of Analyses. 85
• Figure 2. Number of Conditions of Focus among Beneficiaries with at Least One Condition. 90
• Figure 3. Average Number of Related Episodes per Condition, ETGs. 91
• Figure 4. Average Number of Related Episodes per Condition, MEGs. 92
• Figure 5. Average Standardized Payment per Episode, ETGs. 93
• Figure 6. Coefficient of Variation for Standardized Payments for Related Episodes,  ETGs. 94
• Figure 7. Average Standardized Payment per Episode, MEGs. 94
• Figure 8. Coefficient of Variation for Standardized Payments for Related Episodes,  MEG.. 95
• Figure 9. Portion of Episodes Related to Condition, ETG.. 96
• Figure 10. Portion of Standardized Payments for Episodes Related to Condition,       ETGs. 97
• Figure 11. Portion of Episodes Related to Condition, MEGs. 97
• Figure 12. Portion of Standardized Payments for Episodes Related to Condition,      MEGs. 98
• Figure 13. Select Combinations of Vascular Disease Episodes. 100
• Figure 14. Median Number of Providers Involved in the Episode, ETGs. 102
• Figure 15. Median Number of Physicians Providing Services in Facility and Outpatient Settings, ETGs  103
• Figure 16. Potential Patient Trajectories Through the Health Care System.. 104
• Figure 17. Number of Settings Involved in Episodes by Condition, ETGs. 105
• Figure 18. Settings Involved in ETG Episodes Related to AMI 107
• Figure 19.  Settings Involved in ETG Episodes Related to Diabetes. 109
• Figure 20.  Settings Involved in ETG Episodes Related to Hip Fracture. 111
• Figure 21. Division of Standardized Payments across Care Settings, ETGs. 116
• Figure 22. Relationship between Number of Settings Involved in Episode and  Attribution. 120
• Figure 23. Average Standardized Payments per Episode by Condition and State,       ETGs. 122
• Figure 24. Types of Facilities Involved in ETG Episodes Related to Hip Fracture by  State. 123
• Figure 25. Percentage of ETG Episodes Involving Providers from More than One      State. 124
• Figure 26. Average Standardized Payment per Episode by Number of Episodes Experienced. 125
• Figure 27. Median Number of Providers per Episode by Number of Episodes Experienced. 126
• Figure 28. Percent of Episodes Attributed to Physicians by Total Number of Episodes Experienced. 127
• Figure E1. Settings Involved in Episodes: AMI (MEGS) 169
• Figure E2. Settings Involved in Episodes: Diabetes (MEGS) 171
• Figure E3. Settings Involved in Episodes: Hip Fracture (MEGS) 173
• Figure E4. Settings Involved in Episodes: Bacterial Pneumonia (ETGs) 175
• Figure E5. Settings Involved in Episodes: Bacterial Pneumonia (MEGS) 176
• Figure E6. Settings Involved in Episodes: Breast Cancer (ETGs) 178
• Figure E7. Settings Involved in Episodes: Breast Cancer (MEGS) 179
• Figure E8. Settings Involved in Episodes: Cerebrovascular Disease (ETGs) 181
• Figure E9. Settings Involved in Episodes: Cerebrovascular Disease (MEGS) 182
• Figure E10. Settings Involved in Episodes: COPD (ETGs) 184
• Figure E11.  Settings Involved in Episodes: COPD (MEGS) 185
• Figure E12. Settings Involved in Episodes: Congestive Heart Failure (CHF) (ETGs) 187
• Figure E13. Settings Involved in Episodes: Congestive Heart Failure (CHF) (MEGSs) 188
• Figure E14. Settings Involved in Episodes: Low Back Pain (ETGs) 190
• Figure E15. Settings Involved in Episodes: Low Back Pain (MEGS) 19

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Last Updated: 03/15/2010