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Objective. To analyze variation in medical care use attributable to Medicare's decentralized claims adjudication process as exemplified in home hemodialysis (HHD) therapy. Data Sources/Study Setting. Secondary data analysis using 2009-2012 paid Medicare claims for HHD and in-center hemodialysis (IHD). Study Design. We compared variation across Medicare administrative contractors (MACs) in predicted paid treatments per standardized patient-month for HHD and IHD patients. We used ordinary least-squares regression to determine whether higher paid HHD treatment counts expanded HHD programs' presence among dialysis facilities. Data Collection. We identified HHD and IHD treatments using procedure, revenue center, and claim condition codes on type 72x claims. Principal Findings. MACs varied persistently in predicted HHD treatments per patient-month, ranging from 14.3 to 21.9 treatments versus 10.9 to 12.4 IHD treatments. The presence of facilities' HHD programs was uncorrelated with average HHD payment counts. Conclusions. Medicare's claims adjudication process promotes variation in medical care use, as we observe among HHD patients. MACs' discretionary decision making, while potentially facilitating innovation, may admit inefficiency in care practice as well as inequitable access to health care services. Regulators should weigh the benefits of flexibility in local coverage decisions against those of national standards for medical necessity. Key Words. Variation, Medicare, dialysis, It is a basic assumption of much of the geographic variation literature that Medicare beneficiaries have coverage for the same set of services if they receive care in Alaska or [...]

Objective. To characterize the influence of dialysis facilities and nephrologists on resource use and patient outcomes in the dialysis population and to illustrate how such information can be used to inform payment system design. Data Sources. Medicare claims for all hemodialysis patients for whom Medicare was the primary payer in 2004, combined with the Medicare Enrollment Database and the CMS Medical Evidence Form (CMS Form 2728), which is completed at onset of renal replacement therapy. Study Design. Resource use (mainly drugs and laboratory tests) per dialysis session and two clinical outcomes (achieving targets for anemia management and dose of dialysis) were modeled at the patient level with random effects for nephrologist and dialysis facility, controlling for patient characteristics. Results. For each measure, both the physician and the facility had significant effects. However, facilities were more influential than physicians, as measured by the standard deviation of the random effects. Conclusions. The success of tools such as P4P and provider profiling relies upon the identification of providers most able to enhance efficiency and quality. This paper demonstrates a method for determining the extent to which variation in health care costs and quality of care can be attributed to physicians and institutional providers. Because variation in quality and cost attributable to facilities is consistently larger than that attributable to physicians, if provider profiling or financial incentives are targeted to only one type of provider, the facility appears to be the appropriate locus. Key Words. Pay-for-performance, monitoring, dialysis, Private and public payers are focusing on measuring and rewarding quality and efficiency in health care (Milgate and Cheng 2006; Rosenthal et al. 2006). Such efforts include "pay-for-performance" (P4P) systems [...]

In 2011, Medicare implemented a prospective payment system (PPS) covering an expanded bundle of services that excluded blood transfusions. This led to concern about inappropriate substitution of transfusions for other anemia management methods.

Medicare implemented a new prospective payment system (PPS) on January 1, 2011. This PPS covers an expanded bundle of services, including services previously paid on a fee-for-service basis. The objectives of the new PPS include more efficient decisions about treatment service combinations and modality choice.

Different types of providers often face differing financial incentives for providing similar types of care. This may have implications for payment systems that target improvements in care requiring multiple types of providers.

In developing “pay-for-performance” and capitation systems that provide incentives for improving the quality and efficiency of care, policymakers need to determine which healthcare providers to evaluate and reward.

In April 2005, Medicare began adjusting payments to dialysis providers for composite-rate services for a limited set of patient characteristics, including age, body surface area, and low body mass index. We present analyses intended to help the end-stage renal disease community understand the empirical reasons behind the new composite-rate basic case-mix adjustment. The U-shaped relationship between age and composite-rate cost that is reflected in the basic case-mix adjustment has generated significant discussion within the end-stage renal disease community. Whereas greater costs among older patients are consistent with conventional wisdom, greater costs among younger patients are caused in part by more skipped sessions and a greater incidence of certain costly comorbidities. Longer treatment times for patients with a greater body surface area combined with the largely fixed cost structure of dialysis facilities explains much of the greater cost for larger patients. The basic case-mix adjustment reflects an initial and partial adjustment for the cost of providing composite-rate services.

We estimated Cox proportional hazards models using assessment data from the Minimum Data Set to test whether nursing home residents and their proxies respond to quality of care by changing providers. Various indicators of poor quality increased the likelihood of transfer. Residents of for-profit homes or homes with excess capacity also were more likely to transfer. Inability to participate in care decisions and factors indicating frailty limited residents' ability to transfer. The apparent responsiveness to quality is encouraging. Nonetheless, because the absolute transfer rate is low, significant barriers to movement among nursing homes still may exist.