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The impact of diagnosis-related groups on the cost of hospitalization for end-stage renal disease patients at Rhode Island Hospital from 1987 to 1990.

The introduction of diagnosis-related groups (DRGs) for the reimbursement of hospital costs in the Medicare population made no provisions to identify end-stage renal disease (ESRD) patients. To assess the impact of the DRGs on ESRD patients, we prospectively evaluated all hospitalizations (901) at the Rhode Island Hospital from July 1987 through April 1990 among a chronic hemodialysis population of 587 patients. The complied data on length of hospital stay, cost per day, and total cost were compared with the accepted allowances as defined by the DRG codes assigned to the admissions. The mean values and comparisons were length of stay, 10.2 +/- 21 days (ESRD) versus 9.7 +/- 3.6 days (DRGs), P = 0.44; cost per day, $1,240 +/- $685 (ESRD) versus $671 +/- $897 (DRGs), P = 0.0001; and total cost, $9,660 +/- $17,170 (ESRD) versus $6,815 +/- $8,872 (DRGs), P = 0.0001, a difference of $2,275 per admission. The increase in daily, and thus total, costs was primarily due to the use of supplies, medications, laboratory procedures, and transfusion services. It appears from our data that the DRGs do not adequately reflect the cost of caring for ESRD patients with the same DRGs as non-ESRD patients because of increased demand for ancillary services. If these observations are confirmed, a reevaluation of the DRG process as it relates to ESRD patients is warranted.

Diagnosis-Related Groups↗

Using high-intensity care management to integrate acute and long-term care services: substitute for large scale system reform?

This study evaluates a demonstration that used high intensity care management to improve integration between the acute and long-term care service systems. The demonstration intervention included the use of clinical nurse care manager, supervised by a geriatrician, to supplement an existing in-home care management system. Chronically disabled home care clients age 60 and over were randomly assigned (N = 308) to receive enhanced clinical services plus traditional care management, or to the control group, to receive the normal care management services provided. Treatment group members were expected to experience lower use of hospitals and nursing homes and lower overall health and long-term care costs. Research subjects were followed for up to 18 months using Medicare records and mortality data. A subsample (N = 150) also received in-person interviews to cover a range of health and social outcomes anticipated as a result of the intervention. Although there was some variation in health use and cost across treatment and control groups over the 18 month time period, the overall conclusion is that there were no differences between groups on any of the outcome variables examined. Efforts to integrate the acute and long-term care systems have proven to be difficult. This intervention, which attempted to create integration through high intensity care managers, but without financial or regulatory incentives, was simply unable to create enough change in the care system to produce significant change for the clients served.

Aged↗

Improving payments for Medicare patients with unrelated surgical procedures.

The Medicare prospective payment system (PPS) pays hospitals a fixed payment for patients in 474 categories of diagnosis-related groups (DRGs). Since the beginning of PPS, many DRGs have been modified to improve the accuracy of patient classification and the equity of hospital payments. There are continuing problems, however, in classifying surgical patients who have no procedure related to their reason for admission. Until recently, these patients were classified into a single miscellaneous category (DRG 468) and paid the same amount, despite considerable variation in their clinical conditions and resource use. Three options for improving the payment and classification of such cases were examined. Improvements are possible using each of the options examined. The greatest improvement, however, was achieved by reassigning patients to existing surgical DRGs, because patients with the same surgery tend to have similar costs, regardless of their original reason for entering the hospital. This change in assignment methodology would increase payments to teaching hospitals, where the most costly DRG 468 cases are concentrated. It also would remove potential incentives to deny access to or withhold appropriate treatments from patients needing high-cost surgical procedures. It was concluded that this change should be implemented for hospital payment under PPS.

Diagnosis-Related Groups↗

Reliability of assigning correct current procedural terminology-4 E/M codes.

STUDY OBJECTIVES: We determine the degree of interagency and intra-agency agreement on Current Procedural Terminology-4 (CPT-4) coding levels for emergency department medical records. We hypothesized that the level of agreement among coding agencies would be poor, but the distribution of codes would be similar and not significantly different. METHODS: We performed a prospective observational study consisting of 3 separate randomized, blinded trials: 2 interagency comparisons and 1 intra-agency comparison. The setting was 2 suburban academic EDs. In the 2 interagency audits, 4 coding agencies were used. In the intra-agency comparison, we used 5 individual coders from within our own internal agency. The main outcome measures were the level of agreement not due to chance estimated with the multiple-rater weighted kappa statistic and the Kendall tau-b. We measured the distribution of codes by agency or by individual coders with the chi(2) test. RESULTS: Our sample for the 2 interagency audits consisted of 194 and 195 records, respectively. We observed poor agreement in the level of coding assigned to individual charts among the 4 coding agencies, with kappa values of 0.28 (95% confidence interval [CI] 0.275 to 0.285) and 0.287 (95% CI 0.283 to 0.291). Our intra-agency comparison consisted of 100 records. The agreement in the intra-agency review was significantly better but still fair (kappa=0.436; 95% CI 0.428 to 0.444). The distribution of CPT-4 codes was significantly different for all 3 comparisons (P <.001). CONCLUSION: For our patient population, group of physicians, and methods of documentation, we identified poor-to-fair agreement in coding of emergency charts between coding agencies. Only fair agreement was measured in the intra-agency sample. The distribution of assigned CPT-4 codes was significantly different in each comparison. These findings have important financial and legal implications regarding the reliability of coding methods.

Centers for Medicare and Medicaid Services, U.S.↗

Clinical and economic outcomes of individuals with severe peptic ulcer hemorrhage and nonbleeding visible vessel: an analysis of two prospective clinical trials.

OBJECTIVE: We report the clinical outcomes and direct medical costs of 155 patients with severe peptic ulcer hemorrhage and a nonbleeding visible vessel at emergency endoscopy treated with endoscopic hemostasis or medical-surgical therapy. METHODS: In two consecutive, prospective, randomized, controlled trials, patients were randomly assigned to endoscopic hemostasis (heater probe, bipolar electrocoagulation, or injection sclerosis) or medical-surgical treatment. Study endpoints included the incidence of severe ulcer rebleeding and emergency surgery, length of hospital stay, blood transfusion requirements, mortality rate, and direct costs of utilized health care. Direct medical costs were estimated using combined fixed and variable institutional costs for consumed resources and Medicare reimbursement rates. RESULTS: Compared with medical-surgical treatment, endoscopically treated patients had significantly lower rates of severe ulcer rebleeding (p = 0.004), emergency surgery (p = 0.002 and p = 0.019, 0.024), and blood transfusions (p = 0.025). Observed inter-trial differences in ulcer rebleeding rates may be partially explained in a multivariate model by covariates of comorbid disease and inpatient ulcer bleeding. In both trials, length of hospital stay, mortality rates, and treatment-related complications were similar. Estimated median direct costs per patient differed: The first trial had lower costs with endoscopic hemostasis ($4254, vs $4620 for electrocoagulation and $5909 for medical-surgical treatment), yet the second trial yielded lower costs with medical-surgical treatment ($3169, vs $3477 for injection sclerosis and $4098 for heater probe). CONCLUSIONS: Compared with medical-surgical therapy, endoscopic hemostasis for severe ulcer hemorrhage and a nonbleeding visible vessel yielded significantly better patient outcomes and was safe. This procedure may or may not yield lower direct medical costs and cost savings.

Blood Transfusion↗

Strategies for improving comorbidity measures based on Medicare and Medicaid claims data.

Claims-based measures of comorbid illness severity have generally relied on the diagnoses listed for a single hospitalization. Unfortunately, such diagnostic information is often limited because patients have not been hospitalized during periods of interest, because of incomplete coding of diagnoses on claims forms, or because listed diagnoses represent complications of the hospitalization rather than pre-existing comorbid conditions. To address these limitations, we developed and tested four comorbidity index scores for patients with breast cancer, each based on different sources of health services claims from Medicare and Medicaid: hospitalization for breast cancer surgery; outpatient care prior to the hospitalization; other inpatient care prior to the hospitalization; and all sources combined. Varying the number and type of sources of diagnostic information yielded only very small improvements in the prediction of mortality at 1 and 3 years. Surprisingly, even simpler measures of comorbidity (crude number of diagnoses) and of prior health care utilization (total days spent in the hospital) performed at least as well in predicting mortality as did the more complex index scores which assigned points and weights for specific conditions. The greatest improvement in explanatory power was observed when another source of clinical information (cancer stage derived from a population-based cancer registry) was used to supplement claims information. Expanding the source of claims diagnoses and focusing on time periods prior to an index hospitalization are insufficient for substantially improving the explanatory power of claims-based comorbidity indices. Other improvements suggested by our results should include: increasing the completeness and accuracy of claims diagnoses; supplementing diagnoses with health care utilization information in claims data; and supplementing claims data with other sources of clinical information.

Aged↗

Clinical Risk Groups (CRGs): a classification system for risk-adjusted capitation-based payment and health care management.

OBJECTIVE: To develop Clinical Risk Groups (CRGs), a claims-based classification system for risk adjustment that assigns each individual to a single mutually exclusive risk group based on historical clinical and demographic characteristics to predict future use of healthcare resources. STUDY DESIGN/DATA SOURCES: We developed CRGs through a highly iterative process of extensive clinical hypothesis generation followed by evaluation and verification with computerized claims-based databases containing inpatient and ambulatory information from 3 sources: a 5% sample of Medicare enrollees for years 1991-1994, a privately insured population enrolled during the same time period, and a Medicaid population with 2 years of data. RESULTS: We created a system of 269 hierarchically ranked, mutually exclusive base-risk groups (Base CRGs) based on the presence of chronic diseases and combinations of chronic diseases. We subdivided Base CRGs by levels of severity of illness to yield a total of 1075 groups. We evaluated the predictive performance of the full CRG model with R2 calculations and obtained values of 11.88 for a Medicare validation data set without adjusting predicted payments for persons who died in the prediction year, and 10.88 with a death adjustment. A concurrent analysis, using diagnostic information from the same year as expenditures, yielded an R2 of 42.75 for 1994. CONCLUSION: CRGs performance is comparable to other risk adjustment systems. CRGs have the potential to provide risk adjustment for capitated payment systems and management systems that support care pathways and case management.

Capitation Fee↗

Nonsteroidal anti-inflammatory drug use and acute myocardial infarction.

BACKGROUND: Although aspirin has been shown to protect patients from acute myocardial infarction (AMI), the effect of nonaspirin nonsteroidal anti-inflammatory drugs (NSAIDs) is not clear. OBJECTIVE: To determine whether NSAIDs have a similar effect or whether they differ in their effect on the risk of AMI. METHODS: We performed a case-control study of AMI in a large health care database containing information on all filled prescriptions, hospitalizations, diagnoses, and procedures for all patients covered by the New Jersey Medicaid or Medicare and Pharmaceutical Assistance for the Aged and Disabled programs. We identified 4425 patients hospitalized for AMI between January 1, 1991, and December 31, 1995, and 17 700 control subjects. Multivariate models were constructed to control for potential confounders. RESULTS: A quarter of the cases and controls had filled a prescription for an NSAID in the 6 months before theirAMI (cases) or a randomly assigned index date (controls); 9% had filled a prescription for an NSAID that overlapped with their date of AMI or index date. Overall, NSAID users had the same risk of AMI as nonusers, whether such use was measured on the index date (adjusted odds ratio, 1.04; 95% confidence interval, 0.92-1.18; P =.55) or at any time in the prior 6 months (adjusted odds ratio, 1.00; 95% confidence interval, 0.92-1.08; P =.92). However, use of naproxen was associated with a significant reduction in the risk of AMI (adjusted odds ratio, 0.84; 95% confidence interval, 0.72-0.98; P =.03). CONCLUSIONS: Although NSAIDs have anti-inflammatory and antiplatelet effects similar to those of aspirin, we did not find that these drugs confer a protective effect against AMI. However, use of one specific NSAID, naproxen, appeared to be associated with a reduced rate of AMI, an effect recently suggested by a large randomized controlled trial as well.

Adult↗

A new payment system for outpatient services? The implications for radiology.

Congress is now contemplating the most significant change in outpatient payment methodology in Medicare's 31-year history. It may approve a proposal by the Health Care Financing Administration (HCFA) to establish a Medicare prospective payment system for hospital outpatient departments. In March 1955, five years after a Congressional directive to develop a new outpatient payment system, HCFA delivered its proposal recommending use of the ambulatory patient groups (APG) classification system for determining payment of hospital outpatient services. The APG system, which uses outpatient procedures as its primary variable, divides all such procedures into one of three categories: 1) significant procedures or therapies (including therapeutic and other significant radiological procedures); 2) ancillary test and procedures (including 11 radiology ancillary service APGs); or 3) medical visits. Outpatients can be assigned to one or more of the 290 APGs, each comprising a number of clinically and resource intensity-similar procedures, medical visits or ancillary tests. Any new payment methodology for outpatient procedures would broadly impact the radiology community. How radiology providers will fare under the system being proposed will depend on several issues that have not yet been resolved, such as how the basic unit of payment is defined (e.g., a service, a visit, or an episode of care) and whether payment rates will be adequate to compensate for the costs of providing services. One key issue will be whether contrast media and radiopharmaceuticals will continue to be paid as pass-through costs, giving providers the flexibility to choose the specific agent that is most appropriate for their patients.

Ambulatory Care↗

Changes over time in the use of do not resuscitate orders and the outcomes of patients receiving them.

OBJECTIVES: Do not resuscitate (DNR) orders are increasingly common, though there has been little evaluation of their changing use. The authors contrasted the use and outcomes of DNR orders for nationally representative samples of Medicare patients hospitalized with specific diagnoses in 1981 to 1982 and 1985 to 1986. METHODS: Using ordinary least squares regression to adjust for patient and hospital characteristics, the authors compared use, timing and predictors of DNR orders, and survival to hospital discharge of patients with DNR orders between the two time periods. RESULTS: After adjustment for sickness at admission and for patient and hospital factors, more patients received DNR orders in 1985 to 1986 than in 1981 to 1982 (13% versus 10%, P < 0.001), with most of the increase among patients with the greatest sickness at admission. Disparity in DNR order use by age, diagnosis, functional status, preadmission residence, and gender found in 1981 to 1982 was still present in 1985 to 1986. DNR orders were written earlier in hospitalization during the latter time period. Patients with DNR orders were more likely to survive to hospital discharge in 1985 to 1986 than in 1981 to 1982 (44% versus 36%, P = 0.001), but their 30-day survival did not differ. CONCLUSIONS: Although use increased, disparities in DNR order assignment persisted in these 1980s data. Examination is needed into whether these differences persist and whether they reflect patient preferences. Systems should be developed to preserve and review the preferences of the increasing number of patients discharged after in-hospital DNR orders.

Aged↗

Applying the resource-based relative value scale to the Emory angioplasty versus surgery trial.

The resource-based relative value scale developed for use in the Medicare fee schedule can also be very useful in profiling and comparing physicians' cardiovascular utilization across different medical activities. This article applies relative value units (RVUs) to data from the Emory Angioplasty versus Surgery Trial. The Emory Angioplasty versus Surgery Trial was a randomized clinical trial to determine the efficacy of percutaneous transluminal coronary angioplasty (PTCA) versus coronary artery bypass surgery (CABG). All physician services in the clinical trial provided to 2 groups of patients--those undergoing CABG and those receiving PTCA-over the course of 4 years were assigned physician work RVUs (representing the intensity of physician work required) and total RVUs (representing both the intensity and practice costs). Physician charges were also compiled. These data were used to profile and compare physician services to the 2 groups of patients by type of service, distribution over time, and clinical department. Comparisons based on RVUs contrast sharply with differences based on charges. Mean physician charges, in 1996 dollars, were $27,158 for CABG patients and $21,491 for PTCA patients, a 26% difference (p <0.001). Physician work RVUs generated an 18.3% difference (p = <0.001). Using total RVUs, the difference between the 2 groups was 3.3% (p = 0.249). Resource-based relative value weights are a valuable tool for analyzing and comparing physicians' use of cardiovascular resource. The results suggest that conclusions about physician resource utilization based on physician charges should be carefully evaluated. When possible, physician work RVUs should be compiled and evaluated along with physician charges.

Angina Pectoris↗

Coding of acute myocardial infarction. Clinical and policy implications.

STUDY OBJECTIVE: To evaluate the appropriateness of diagnostic coding of acute myocardial infarction across teaching and nonteaching hospitals. DESIGN: Retrospective review of a random sample of medical records to find evidence of the occurrence and active treatment of acute myocardial infarction during the admission. SETTING: Five tertiary teaching, five other teaching, and five nonteaching hospitals in metropolitan Boston. CASES: Random sample of hospital admissions assigned a discharge diagnosis of acute myocardial infarction between October 1984 and September 1985. MEASUREMENT AND MAIN RESULTS: Of the 1003 cases reviewed, 260 did not meet the clinical criteria for acute myocardial infarction. At tertiary hospitals, 175 (41.7%) failed to qualify, compared with 25 (9.1%) at nonteaching facilities. In a large fraction of the disqualified cases, the patients had been admitted to exclude the diagnosis of acute myocardial infarction; although explicitly "ruled out," an acute myocardial infarction code was assigned. Sixty-six cases from teaching hospitals did not qualify because the patient had been admitted only for coronary angiography after an uneventful postmyocardial infarction course. Almost one-third of these patients had had their infarcts from 5 to 8 weeks before the angiography admission. CONCLUSIONS: Cases with an inappropriate discharge diagnosis of acute myocardial infarction may be concentrated in teaching hospitals. This finding could have implications for Medicare's diagnosis-related group payment system and governmental and other research efforts that use these data for such purposes as drawing inferences about the quality of hospital care.

Boston↗

A clearing in the crowd: innovations in emergency services.

Emergency department overcrowding may not be so much a result of inappropriate use of the emergency department as it is a problem of the unavailability and inaccessibility of primary care services in the community. The prevailing theory that people use the emergency department because they cannot afford care elsewhere does not hold true. The vast majority of patients surveyed as part of the Emergency Services Initiative had some type of coverage, primarily Medicare or Medicaid. Without additional primary care capacity to accommodate walk-in patients and to make appointments available within one to two weeks, emergency departments will remain over-crowded. In addition to increasing primary care capacity, services must be structured to be as convenient and amenable to patient use as the emergency department. The findings of the Emergency Services Initiative supports the Preferred Primary Care Provider guidelines for the assignment of a primary practitioner or team to each patient, 24-hour telephone access for medical advice, evening and weekend hours, accommodation of walk-in patients, and the provision of nonurgent appointments within a maximum of two to four weeks. In addition, easy access to ancillary services for lab tests and X rays is beneficial for attracting patients. Patient education is also necessary. Questioning by counselors indicated that patients often do not understand that primary care settings are more appropriate than the emergency department for treatment of minor health problems. The most effective way to implement change in the health care system may not be through broad, generic prescriptions but through well-designed programs tailored to specific sites and communities. Changing staff behavior is often as challenging as changing patient behavior. Pre-project planning and communication about purpose, scope, and procedures are necessary if projects are to begin and continue smoothly. Ongoing evaluation is also key.

Community-Institutional Relations↗

Compliance with a 12-month assessment in an elderly cohort participating in a preventive intervention study: the San Diego Medicare Preventive Health Project.

Non-compliance in long-term cohort studies contributes to bias in the estimation of study parameters and loss of power in hypothesis testing. This paper identifies baseline factors associated with non-compliance in a 12-month health assessment among elderly participants in the San Diego Medicare Preventive Health Project, a randomized preventive intervention study. A non-complier was defined as a study subject contacted by telephone by study personnel to schedule an appointment for the 12-month health assessment but who would not or could not attend. Of the almost 1600 contacted subjects, 14.1% did not participate in the evaluation. Using logistic regression, non-compliance was found to be associated with older age, intervention group assignment, nonsingle family residence, no alcohol use, and, to a lesser extent, depression. No interactions between group assignment and other baseline factors were detected. These results may be useful in designing cohort maintenance strategies where greater resources may be devoted to participants at higher risk of non-compliance and attrition.

Aged↗

Collection performance: an empirical analysis of not-for-profit community hospitals.

Many not-for-profit community hospitals had major shifts in their annual collection performance between 1986 and 1988. The collection performance is measured by excess collection time; this is computed as the difference between the actual average collection time for a hospital and the median for one of the six panels to which the hospital is assigned based on ownership, control code, and financial reporting practices. The sample for this study has 1,246 not-for-profit hospitals comprising over 50 percent of total revenue and expenses of all community hospitals (about 5,500). More than 16 percent of these hospitals had annual changes of ten-plus days in each of the years. Excess collection time within the six panels was examined by state, payer mix (Medicare, Medicaid, and Blue Cross), membership in the Council of Teaching Hospitals, medical school affiliation, case-mix index for Medicare, contractual allowance rate, debt-service coverage, return on assets, new investments, age of property, and urban location. Major findings were that collection patterns are different among some states. The proportions of Medicare, Medicaid, and Blue Cross are negatively associated with excess collection time in three of the panels. Contractual allowance is positively related, and return on assets is negatively associated with excess collection time in two of the panels. The other factors had virtually no effect on the collection performance.

Accounts Payable and Receivable↗

Chemoprevention: drug pricing and mortality: the case of tamoxifen.

BACKGROUND: Tamoxifen is a prototypic cancer chemopreventive agent, yet clinical trials have not evaluated its effect on mortality or the impact of drug pricing on its cost-effectiveness. METHODS: A state-transition Markov model for a hypothetical cohort of women age 50 years was used to evaluate the effects of tamoxifen on mortality and tamoxifen price on cost-effectiveness. Incidence and mortality rates for breast and endometrial cancers were derived from Surveillance, Epidemiology and End Results statistics, and noncancer outcomes were obtained from published studies. Relative risks of outcomes were derived from the National Surgical Adjuvant Breast and Bowel Project P-1 trial. Costs were based on Medicare reimbursements. RESULTS: Projected overall mortality for women at 1.67% 5-year breast cancer risk showed little difference with or without tamoxifen, resulting in a cost-effectiveness ratio of $1,335,690 per life-year saved as a result of tamoxifen use. Adjusting for the differential impact of estrogen receptor-negative cancers, tamoxifen increased mortality for women with a uterus until the 5-year breast cancer risk reached > or =2.1%. Assigning the Canadian price for tamoxifen dramatically reduced the incremental cost (to $123,780 per life-year saved). At that price, the use of tamoxifen was less costly and more effective for women with 5-year breast cancer risks >4%. CONCLUSIONS: Tamoxifen may increase mortality in women at the lower end of the "high-risk" range for breast cancer. If prices in the U.S. approximated Canadian prices, then tamoxifen use for breast cancer risk reduction in women with a 5-year risk >3% could be a reasonable strategy to reduce the incidence of breast cancer. Because they are used by many unaffected individuals, the price of chemopreventive agents has a major influence on their cost-effectiveness.

Anticarcinogenic Agents↗

10 tips for avoiding APC traps.

To encourage proper payment and avoid imposition of penalties by the Office of Inspector General, providers need to prioritize outpatient compliance efforts. Departments should be accountable for reconciling outpatient code editor edit failures. Evaluation and management code assignment should be examined for inter-rater reliability. Transitional pass-through items should be audited routinely; associated coding should be kept current. Consideration should be given to meeting medical necessity requirements, particularly for mental health services.

Ambulatory Care↗

Outcomes of patients with do-not-resuscitate orders. Toward an understanding of what do-not-resuscitate orders mean and how they affect patients.

OBJECTIVES: To evaluate the outcomes of hospitalized patients with do-not-resuscitate (DNR) orders and to identify variables that may elucidate the high mortality of patients with DNR orders. METHODS: Among a nationally representative sample of Medicare patients hospitalized with congestive heart failure, acute myocardial infarction, pneumonia, cerebrovascular accident, or hip fracture, we retrospectively studied in-hospital and 180-day mortality and hospital lengths of stay for patients without DNR orders, with early (day 1 or 2) DNR orders, and with late (day 3 or later) DNR orders, before and after adjustment for sickness at hospital admission and patient and hospital characteristics. RESULTS: In-hospital mortality for patients with DNR orders exceeded that for patients without DNR orders before adjustment (59% vs 8%, P < .001), and after accounting for differences in sickness at admission and patient and hospital characteristics (40% vs 9%, P < .001). Sicker patients were assigned earlier DNR orders. Yet, patients with early DNR orders had a lower adjusted in-hospital mortality (31% vs 49%, P < .001) and shorter hospital stay (10 vs 18 days, P < .001) than did patients with late DNR orders. CONCLUSIONS: Hospitalized older patients with DNR orders have a much higher mortality than predicted by admission demographic and clinical characteristics. The differential association of early and late DNR orders with mortality indicates that DNR orders represent a heterogeneous group of interventions that may be a marker of unmeasured sickness and a determinant of quality of care. A better understanding of what the DNR order represents and its effect on patient care is needed to ensure optimal use.

Aged↗