This helps ensure that providers are paid accurately and timely, while also providing budget certainty to both parties. In examining the length of time and percent of cases that terminate in a particular way we see that the nondisabled community elderly and the institutionalized elderly have slight increases in hospital episodes ending in death with the community disabled experiencing virtually no change. We measured changes in hospital use, and use of post-acute SNF and HHA services, hospital readmissions and mortality during and after hospital stays. The results of our study were consistent with findings by other researchers and understandable, in part, in the context of changes in the health care service environment surrounding the implementation of Medicare's new payment system for hospitals. The statistic used to test the significance of differences is the well known X2 "goodness-of-fit" statistic which is used to determine if two or more distributions are statistically significantly different. Our specific aims 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. Additionally, it helps level the playing field by ensuring all patients receive similar quality care regardless of their ability to pay or provider choice. As noted in the figure, the number of such patients increased by 3 percentage points (a 22-percent rise). Mortality rates declined for all patient groups examined, and other outcome measures also showed improvement. Only 3 percent had a prior nursing home stay, and only 10 percent spent private dollars for home care. A DRG is a statistical system of classifying any inpatient stay into groups for the purposes of payment. In choosing to benchmark our hospital readmission risks on those entering hospital, we effectively compared all individuals who entered hospitals in the two time periods. This can be done by examining the patterns of service use in the three major subgroups of the population as defined by the sample design of the 1982-1984 NLTCS. .gov Note that the orientation starts a 0 when the OpMode . 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. Woodbury, and A.I. Not surprisingly, the expected number of days before readmission were also similar--194 days versus 199 days. This refinement of the comparison of observed differences in patterns indicated that statistically significant differences (at the .05 level) were found for the hospital stays that ended with admission to HHA. The DALTCP Project Officer was Floyd Brown. In comparing pre- and post-PPS period differences in hospital readmissions, we looked at several dimensions of the phenomenon. 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. * These are episodes when no Medicare hospital, skilled nursing facility or home health services are used. Conklin and Houchens found that while crude 30-day mortality rates increased by 9.3% between 1984 and 1985, all of this increase could be explained by the increase in case-mix severity between the two years. The rules and responsibilities related to healthcare delivery are keyed to the proper alignment of risk obligations between payers and providers, they drive the payment methods used to pay for medical care. The pre-PPS period was the one-year window from October 1, 1982 through September 30, 1983. The new system for prospective payment of Medicare pa-tients provided that most hospitals in the United States would be reimbursed a fixed fee for each Medicare patient. In addition, the authors found that the reduction in LOS was due primarily to reductions in the period between the initiation of physical therapy and the discharge date. Third, we disaggregated the cases by post-acute care use to determine if the risks of hospital readmission differed by whether post-acute Medicare SNF and home health services were used, as well as for cases that involved no Medicare post-acute services. In the GOM procedure, a person may be described by more than one continuously varying case-mix dimension. Operations Management questions and answers Compare and contrast the various billing and coding regulations which ones apply to prospective payment systems. The study found virtually no changes in Medicare SNF use after PPS was implemented. One continues to add dimensions until the K + l dimension is no longer significant according to the X2 criterion. These results are consistent with findings by other researchers (DesHarnais, et al., 1987). For example, while LOS declined for persons with mild disabilities, they remained the same for those with medically acute conditions. Yashin. Type I, which we will refer to as "Mildly Disabled," has only a minimum of long-term health and functional status problems, with the most prevalent conditions being rheumatism and arthritis. However, we were unable to determine with our data source if post-acute use of non-Medicare nursing home care increased after implementation of PPS. There were indications of service substitution between hospital care and SNF and HHA care. 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. 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. Our study was designed to provide information to assess PPS effects on the functionally impaired subgroup of Medicare beneficiaries. A number of reasons for the decline in admission rates have been proposed, including the effects of awareness of unprofitable admissions, the increased use of second opinion and pre-authorization programs, changes in medical technology and the movement of location of services from inpatient to outpatient settings (DesHarnais, et al., 1987). ** One year period from October 1 through September 30. In subsequent sections we will analyze in greater detail, the service use and mortality of one of the groups, the community disabled elderly. Everything from an aspirin to an artificial hip is included in the package price to the hospital. PPS replaced the retrospective cost-based system of pay Similarly, relatively little information currently exists on the status of patients discharged from hospitals in terms of their health status and use of community based recuperative and rehabilitative care. (Part B payments for evaluation and treatment visits are determined by the, Primary diagnosis determines assignment to one of 535 DRGs. Second, there were competing risks which censored the occurrence of specific events of interest, such as "end of study" relative to hospital readmission. from something you have read about. The NLTCS contained detailed information on the health and functional characteristics of nationally representative samples (about 6,000) of noninstitutionalized disabled Medicare beneficiaries in 1982 and in 1984. ** One year period from October 1 through September 30. Other Episodes. The high level of disability is associated with neurological diseases, including Parkinson's disease, multiple sclerosis and epilepsy. In a second study, Krakauer (HCFA, 1987) analyzed the effectiveness of care provided to Medicare beneficiaries during hospitalization and thereafter in 1983-85. 2. There was a decline in average LOS for all HHA episodes from 77.4 days to 52.5 days. The characteristics of the four subgroups suggested different needs for Medicare services and different risks of various outcomes such as hospital readmission and mortality. The study team chose patients admitted for one of five conditions: These conditions were chosen because they are severe and have high mortality rates. Service Use and Outcome Analyses. The first type are the scores . 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). 1. rising healthcare payments using the funds in the Medicare Trust at a rate faster than US workers were contributing dollars 2. fraud and abuse in the system, wasting funding 3. payment rules not uniformly applied across the nation prospective payment system (PPS) Sixty-seven percent (67%) indicate that their general health is good or excellent. The collective results of the study led the authors to conclude that there was no evidence to indicate that the quality of care has declined during the first two years of PPS. Finally, it is important to provide education and training for healthcare providers on how to use the system effectively. Second, we describe data sources and methodology. In the following sections, we first discuss the background for this study. The results are presented in five parts. Paul Eggers, Jim Vertrees, Bob Clark and Judy Sangl read earlier drafts of this report and provided many insightful comments and suggestions. A linear forecasting model to project 1984 measures of utilization and outcomes based on trends from 1980 to 1983 was developed to compare the expected 1984 measures to observed 1984 measures. The study also found an increase in the proportion of patients discharged to skilled nursing facilities after hospitalizations, from 21 percent to 48 percent. 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. Shaughnessy, P.W., A.M. Kramer, and R.E. The American Speech-Language-Hearing Association (ASHA) is the national professional, scientific, and credentialing association for 228,000 members and affiliates who are audiologists; speech-language pathologists; speech, language, and hearing scientists; audiology and speech-language pathology support personnel; and students. The study found that quality of care actually improved after PPS for three of the patient groups (AMI, CVA, and CHF), and did not change significantly for the other two (pneumonia, hip fracture). This allows both parties to budget accordingly, reducing waste and improving operational efficiency. There also appears to be a change in the hospital stays that resulted in admissions to SNFs, although this difference was significant at a .10 level. * Adjusted for competing risks of hospital readmission and end of study. Stern, R.S. However, this definition was applied uniformly for both pre- and post-PPS periods, and we are not aware of any systematic differences in the onset of post-acute services between the two time periods. The two results suggest that for the "Mild Disability" group, there was a detectable change in utilization characterized by higher hospital discharge to SNFs and higher SNF discharges to "other" episodes with corresponding decreases in hospital and SNF lengths of stay. 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 concept has its roots in the 1960s with the birth of health maintenance organizations (HMOs). 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. The payment amount for a particular service is derived based on the classification system of that service (for example, diagnosis-related groups for inpatient hospital services). Many aspects of our study are different from those of the other studies, although the goals are similar. Third, it is important to set up systems to monitor spending and utilization rates to ensure that the PPS model is not being abused or taken advantage of. JavaScript is disabled for your browser. While also based on episodes rather than beneficiaries, this analysis keyed events to a hospital admission. Analyses of the characteristics of hospital admissions suggested that approximately half of the increase in post-hospital mortality was accounted for by an increase in the proportion of admissions for conditions associated with higher mortality risks. programs offered at an independent public policy research organizationthe RAND Corporation. Sager, M.A., E.A. Table 6 presents the patterns of discharge for HHA episodes. 1997- American Speech-Language-Hearing Association. Ultimately, prospective payment systems seek to balance cost and quality, which can create a better overall outcome for both the provider and patient. Our analysis plan was to compare Medicare service utilization for 12-month periods before and after the implementation of PPS. This methodology produces risks of hospital readmission net of mortality. Key Findings Medicare's prospective payment system (PPS) did not lead to significant declines in the quality of hospital care. Service use measures that were analyzed were hospital admissions, Medicare hospital length of stay (LOS), SNF and HHA use. The only negative post-PPS change was an increase in the number of patients discharged in unstable condition. For example, we found reductions in hospital length of stay after PPS and increased use of HHA services. Thus the whole distribution by case-mix type has been altered by the sorting out of service venues due to the impact of PPS. Mortality. Instead of receiving a monthly premium to cover the whole family, the health care facility receives a single payment for a single Medicare beneficiary to cover a defined period of time or the entire inpatient stay. The finding that admission rates to hospitals from SNFs, HHAs and the community declined between the pre- and post-periods, is also consistent with other studies results showing declining hospital admission rates for all Medicare beneficiaries (Conklin and Houchens, 1987). By "significant" we mean whether or not the life tables estimated for each case mix group differ from those for the total population by more than chance. DMEPOS and MPFS don't comprise prospective payment systems and focus on supplier and physicians groups correspondingly. How do the prospective payment systems impact operations? "The Early Effects of the Prospective Payment System on Inpatient Utilization and the Quality of Care," Inquiry, 24:7-16. This improvement was consistent with long-standing nationwide trends toward improved quality of care under way when PPS was implemented. This uncertainty has led to third-party payers moving towards prospective payment methodologies. Proportion of hospital episodes resulting in deaths in period. The case mix controls allowed us to examine this question.