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Risk adjustment in claims-based research: the search for efficient approaches.

Claims-based indices of comorbidity and severity, as well as other measures derived from routinely collected administrative data, are developed and tested. The extent to which risk adjustments using claims can be improved by adding information from one well-known measure based on chart review and patient examination (the American Society of Anesthesiologists' (ASA) Physical Status score) is also examined. Readmissions and mortality after three common surgical procedures are the outcomes studied using multiple logistic regression. Claims-based measures of comorbidity, derived both from hospital discharge abstracts at the time of surgery and from hospitalizations in the 6 months before surgery, provided reasonably good predictions of postsurgical readmissions and mortality. In the most complete logistic regression models, the Somers' Dyx measure of fit (a rank correlation coefficient) ranged from 0.23 to 0.38 for readmissions and from 0.46 to 0.72 for mortality. In 5 out of 6 cases, these predictions were not improved by including the prospectively-collected ASA Physical Status score. Such difficulties in improving risk adjustment by more intensive data collection are discussed in terms of their research implications.

Comorbidity↗

Do treatment restrictions imposed by utilization management increase the likelihood of readmission for psychiatric patients?

OBJECTIVES: The use of utilization management as a cost-containment strategy has led to debate and controversy within the field of mental health. Little is currently known about how this cost-containment approach affects patient care or quality. The aim of this investigation was to determine whether treatment restrictions imposed on privately insured psychiatric patients by a utilization management program affected the likelihood of readmission. METHODS: The utilization management program included three review activities: preadmission certification, concurrent review, and case management. During a 5-year period (1989-1993), 3,073 inpatient reviews were performed on 2,443 privately insured psychiatric patients. Using logistic regression, restrictions imposed by utilization management on length-of-stay in relation to 60-day readmission rates were investigated. RESULTS: The most common diagnoses among the psychiatric patients whose care was reviewed were alcohol dependence (22.9%), recurrent depression (22.5%), and single-event depression (20.8%). On average, 22.4 days of inpatient psychiatric treatment was requested through the review procedures, and 15.5 days of care were approved by the utilization management program. Of the 2,443 patients reviewed, 7.9% had a readmission within 60 days of their initial admission. Patients whose length-of-stay was restricted by utilization management were more likely to be readmitted. For each day that the requested length-of-stay was reduced, the adjusted odds of readmission within 60 days increased by 3.1% (P = 0.004). CONCLUSIONS: The utilization management program restricted access to inpatient psychiatric care by limiting length of stay. Although this approach may promote cost containment, it also appears to increase the risk of early readmission. Continuing attention should be paid to investigating the effects on quality of utilization management programs aimed at containing mental health costs.

Adult↗

Medicare program; establishment of an expedited review process for Medicare beneficiaries enrolled in health maintenance organizations, competitive medical plans, and health care prepayment plans--HCFA. Final rule with comment period.

This final rule with comment period establishes a new administrative review requirement for Medicare beneficiaries enrolled in health maintenance organizations (HMOs), competitive medical plans (CMPs), and health care prepayment plans (HCPPs). This rule implements section 1876(c)(5) of the Social Security Act, which specifies the appeal and grievance rights for Medicare enrollees in HMOs and CMPs. This rule requires that an HMO, CMP, or HCPP establish and maintain, as part of the health plan's appeals procedures, an expedited process for making organization determinations and reconsidered determinations when an adverse determination could seriously jeopardize the life or health of the enrollee or the enrollee's ability to regain maximum function. This rule also revises the definition of appealable determinations to clarify that it includes a decision to discontinue services.

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

When courts review medical appropriateness.

OBJECTIVES: The authors examined how the courts have responded to public and private insurers' use of medical appropriateness criteria to establish coverage and payment policies. METHODS: A structured review of all federal and state court health insurance cases decided between 1960 and June 1994 that involved a dispute involving medical appropriateness was performed. A total of 3,215 published court decisions were analyzed, of which 203 met the criteria of relevance and 124 explicitly mentioned medical appropriateness criteria. The main outcome variable was whether the court ordered the insurer to provide coverage. RESULTS: In 185 cases, a definitive decision was rendered, and the insurer was required to pay in 57% of the decisions. Whether the insurer relied on an assessment or not, whether the assessment process was formal or informal, and who conducted the assessment did not appear to influence courts' decisions, nor did the specificity of the coverage exclusion. Significant predictors of courts ordering coverage were court jurisdiction, contract language assigning discretion to the insurer, severity of patient's condition, and whether the treatment appeared to work for the particular patient. CONCLUSIONS: For practice guidelines to be accepted by the courts, it is more important to focus on how insurance contracts are written than on how medical assessments are performed.

Eligibility Determination↗

The use of administrative databases to assess oral health care.

OBJECTIVE: We examined the potential for research using administrative databases containing dentists' claims to identify both the type of health services research questions addressed and the strength of the evidence that is achieved in such studies. METHODS: We searched Medline (1966 to March, 2003), retrieved additional reports from personal files, reviewed the literature cited in the relevant articles and conducted electronic searches on investigators' surnames. Information from relevant articles was abstracted into tables and the strength of the evidence for each was classified. RESULTS: Thirty-eight studies met our inclusion criteria. Researchers have used administrative databases of dental records to examine provider practices, the longevity or consequences of dental interventions, the prevalence of dental conditions, and patient factors that determined care, and to establish quality assurance criteria or standards of care. The strongest designs were prospective or case-control (Level II-2). CONCLUSION: Studies analyzing administrative databases have the advantage of size and economy but are subject to several threats to their validity and are seldom population-based. The strongest designs occurred with investigation of the longevity or consequences of care. Several studies demonstrated the benefit of linking the service data to patient or provider characteristics. The study of dentists' claims data appears under exploited, especially in the area of identifying and recommending changes in dental health care policies.

Databases, Factual↗

Retrospective denial of emergency department payments is inappropriate.

Third-party payers typically use patients' discharge diagnoses to determine "appropriate" Emergency Department (ED) usage. This analysis compared the resource intensity involved in ED evaluation for "inappropriate" and all other ED visits. In this retrospective database review, 11 discharge diagnoses (DX11) (chronic nasopharyngitis; chronic sinusitis; chronic pharyngitis; rhinitis; constipation; head cold; hemorrhoids; toothache; flu; headache; and tension headache) were identified by a third party payor as being "inappropriate" for ED evaluation. The chief complaints of all patients seen in 1994 and 1995 with one of the DX11 were identified along with their E & M billing level, ED length of stay (LOS), and the frequency of consultation. In this urban, university trauma center, 1994 and 1995 visits totaled 120,402. Eighty-two different chief complaints were associated with a final diagnosis of DX11; 79% of all ED patients presented with one of the chief complaints (AllCC). Four percent of patients with DX11 were admitted, and the AllCC group had comparable resource utilization to the entire ED population. Patients' presenting complaints are incapable of predicting diagnosis or disposition. Retrospective denial of payment by discharge diagnosis is inappropriate.

Emergency Service, Hospital↗

Assessing costs and cost effectiveness of pneumococcal disease and vaccination within Kaiser Permanente.

OBJECTIVE: To review studies of the costs of pneumococcal disease and the cost effectiveness of pneumococcal conjugate vaccination conducted in association with the Kaiser Permanente Pneumococcal conjugate Efficacy Trial. RESULTS: for each birth cohort of 3.8 million infants, routine pneumococcal conjugate vaccination program for healthy infants would prevent more than 12000 (78% of potential) meningitis and bacteremia cases, 53000 (69% of potential) pneumonia cases, and 1 million (8% of potential) otitis media episodes. Before accounting for vaccine costs, the vaccination program would reduce the costs of pneumococcal disease by $342 million in medical and $415 million in work-loss and other costs. Vaccination of healthy infants would result in net savings for society if the vaccine cost less than $46 per dose, and net savings for the health care payer if the vaccine cost less than $18 per dose.

Absenteeism↗

Managed care in the genomics era: assessing the cost effectiveness of genetic tests.

BACKGROUND: Despite the fact that the Human Genome Project was completed only recently, genetic tests already have entered the marketplace, some with few or no long-term data to support their use. Managed care organizations will face reimbursement decisions for genetic tests on a growing scale, and they should have a framework in place to evaluate the clinical and economic outcomes of this new class of diagnostics. OBJECTIVE: To develop a set of criteria that could assist decision makers in evaluating the cost effectiveness of genetic testing. METHODS: A literature review was conducted of marketed genetic tests and criteria used to evaluate the clinical and economic benefits of genetic testing. Criteria were developed and pilot-tested on currently available genetic tests in colon cancer, periodontitis, acute lymphoblastic leukemia, and anticoagulation. RESULTS: A robust cost-effectiveness analysis requires data demonstrating (1) genotype-phenotype association; (2) genetic variant prevalence; (3) clinical outcome severity and incidence; (4) interventions for the variant group; and (5) sensitivity, specificity, and timing of the assay result. In addition, calculating the number of patients who need to be screened based on the above factors is useful for evaluating genetic tests. CONCLUSIONS: When evaluating a genetic test for reimbursement, these criteria can help to: (1) quantify the potential clinical benefit and economic savings; (2) assess the robustness of a cost-effectiveness analysis; and (3) clarify areas where data are deficient. These criteria should be used to inform the decision-making process in the context of ethical, legal, and social issues related to genetic testing.

Cost-Benefit Analysis↗

Variation in Medicare's local coverage policies: content analysis of local medical review policies.

OBJECTIVE: To assess variation in the content of Medicare's local medical review policies. STUDY DESIGN: Six case studies to compare differences in coverage policies by diagnosis codes, procedure codes, and indications for use. METHODS: All carrier policies from 48 carrier contracts (n = 5213) posted to the Centers for Medicare & Medicaid Services Web site were downloaded on May 31, 2001. All policies in the data set were coded based on a typology: new technology (NT), extensions of new technology (TE), and utilization management (UM) of widely used procedures. We identified policies addressing the same procedure or technology. We required at least 20 separate policies in each case study to allow meaningful comparisons. We randomly selected 1 case study of a diagnostic and 1 for a treatment modality from each policy type (NT, TE, and UM). RESULTS: Given previous research on local carriers, we expected to find variations among policies in each case study. We found substantial similarity, however, among policies covering the NT and TE types. We found significantly more variation among our UM-type case studies. CONCLUSIONS: Medicare legislation has called for greater coverage policy consistency in Medicare. This analysis on variation in policy content, part of a larger study on variation in Medicare's local coverage process, provides data on policy content differences. Policy reform should reflect the nature of and reasons for policy variation as suggested by the findings of this research.

Humans↗

Physician manipulation of reimbursement rules for patients: between a rock and a hard place.

CONTEXT: Health plan utilization review rules are intended to enforce insurance contracts and can alter and constrain the services that physicians provide to their patients. Physicians can manipulate these rules, but how often they do so is unknown. OBJECTIVE: To determine the frequency with which physicians manipulate reimbursement rules to obtain coverage for services they perceive as necessary, and the physician attitudes and personal and practice characteristics associated with these manipulations. DESIGN, SETTING, AND PARTICIPANTS: A random national sample of 1124 practicing physicians was surveyed by mail in 1998; the response rate was 64% (n = 720). MAIN OUTCOME MEASURE: Use of 3 different tactics "sometimes" or more often in the last year: (1) exaggerating the severity of patients' conditions; (2) changing patients' billing diagnoses; and/or (3) reporting signs or symptoms that patients did not have to help the patients secure coverage for needed care. RESULTS: Thirty-nine percent of physicians reported using at least 1 tactic "sometimes" or more often in the last year. In multivariate models comparing these physicians with physicians who "never" or "rarely" used any of these tactics, physicians using these tactics were more likely to (1) believe that "gaming the system" is necessary to provide high-quality care today (odds ratio [OR], 3.67; 95% confidence interval [CI], 2.54-5.29); (2) have received requests from patients to deceive insurers (OR, 2.44; 95% CI, 1.72-3.45); (3) feel pressed for time during patient visits (OR, 1.69; 95% CI, 1.21-2.37); and (4) have more than 25% of their patients covered by Medicaid (OR, 1.60; 95% CI, 1.08-2.38). Notably, greater worry about prosecution for fraud did not affect physicians' use of these tactics (P = .34). Of those reporting using these tactics, 54% reported doing so more often now than 5 years ago. CONCLUSIONS: A sizable minority of physicians report manipulating reimbursement rules so patients can receive care that physicians perceive is necessary. Unless novel strategies are developed to address this, greater utilization restrictions in the health care system are likely to increase physicians' use of such manipulative "covert advocacy" tactics.

Attitude of Health Personnel↗

Health care policy evaluation using longitudinal insurance claims data: an application of the panel Tobit estimator.

The British Columbia Ministry of Health provides enhanced prescription drug insurance coverage to residents aged 65 and older. This exogenous change in the effective price of prescription drugs is used to investigate aspects of the drug use by seniors. Three sets of issues are of interest. First, what is the effect of enhanced insurance coverage on drug use and programme costs once drugs are provided free of charge? Second, is this effect permanent, or transitory? Third, are any increases in use observed concentrated among those with lower incomes? Longitudinal administrative claims payment data on 18,000 seniors over the period 1985-92 are used. All individuals in the sample turned 65 at some point and therefore became eligible for subsidized prescription drugs. Health status information is not collected; instead, health status is treated as an individual-specific fixed endowment, subject to a common rate of decay. Estimation is complicated by censoring of real drug expenditures for those under 65, rendering 'first differencing' methods invalid. A semi-parametric fixed effects Tobit estimator is used instead. For most individuals, the extension of insurance does not permanently increase drug use. Males with lower income were the exception. Little evidence of transitory effects to insurance coverage was found. Finally, the extension of insurance has made only a minor contribution to growth in seniors' drug use, relative to secular growth in drug use over time.

Age Factors↗

Health care policies affecting the treatment of patients with cancer and cancer research.

BACKGROUND: Reimbursement policies under the current health care financing system are chaotic, even for older individuals who might expect some measure of uniformity under federal statues that govern coverage under Medicare. Policy changes at the federal level have increased the complexity and uncertainty of reimbursement for providers and patients. METHODS: The Association of Community Cancer Centers, in conjunction with a number of state medical oncology societies, distributed surveys to medical oncologists in 20 states during 1993. Eight hundred, fifty-six medical oncologists in 282 practices responded with information on their practices and insurance problems. RESULTS: Data illustrate the broad diversity of coverage for cancer treatment and research and its impact on treatment decisions and patient access. The broad spectrum of results from various states indicates significant differences in the implementation of federal policies on key issues, such as access to chemotherapeutic agents for off-label indications and clinical trials. CONCLUSIONS: The data portray the significant influence of insurance company policies on clinical research and disease prevention and treatment. Under the current system, prevention measures and prevention trials are discouraged, and a growing number of insurers are not paying for clinical research. New state and federal legislation offers some hope that uniformity of access to providers, prevention, off-label drugs, and clinical trials may be on the horizon.

Clinical Trials as Topic↗

Disease coding errors by health care organizations: effects of a government quality intervention.

Disease coding errors in claims data can cause serious problems for financing, reimbursement systems, public health surveillance and health research. This study analysed a government intervention to improve coding accuracy of health care organizations in South Korea. The intervention was implemented in 1997 by 226 organizations that had submitted erroneous claims in 1996 for five selected diseases. In 1998, 94% of these organizations eliminated coding errors for these diseases. Those organizations least responsive to the intervention were tertiary hospitals, those publicly owned, and those with other complex organizational characteristics. Overall, this simple intervention appeared extremely effective, and wider adoption of such techniques should be explored.

Communicable Diseases↗

TMJ syndrome: is it compensable?

Temporomandibular joint (TMJ) syndrome has only recently surfaced as a workers' compensation or auto accident claim in the insurance industry. It usually appears as a secondary problem to cervical injuries. Further research is needed to establish guidelines for determining whether TMJ syndrome is compensable, but a survey of healthcare practitioners who deal with TMJ--such as the one described in this article--can help in making a determination until guidelines are established. In early 1990, the American Academy of Craniomandibular Disorders and the American Dental Association published guidelines; however, these guidelines address only diagnosis and treatment (Independent Medical and Dental Consultants, Inc., 1990). Further information is needed concerning TMJ's causes and whether the condition should be compensated. Sixty survey questionnaires were sent out to dentists and oral surgeons to identify causes of TMJ, symptoms, diagnostic methods, and treatment. The primary question for which the survey sought an answer was how to judge whether a person with a cervical injury complicated by TMJ syndrome should be compensated for TMJ problems. The remaining questions and answers concerned the medical management of patients with TMJ syndrome.

Health Planning Guidelines↗