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Importance: Enrollee cost-sharing and health insurance premiums have grown alongside rising hospital prices. To control prices and price growth, the Oregon State Employee plan instituted a cap on hospital facility payments in October 2019 that was found to reduce hospital prices. Yet the program's association with out-of-pocket spending and use among enrollees is unknown., Objective: To assess the association of the Oregon State Employee Plan's hospital payment cap with out-of-pocket spending and changes in service use among state employees enrolled in higher cost-sharing plans., Design, Setting, and Participants: Using data from the Oregon All Payer All Claims database (January 2014 to December 2021), a difference-in-differences analysis was conducted to examine the association of Oregon's hospital payment cap with enrollee out-of-pocket spending and service use. The main analysis focused on the outpatient setting, where there were significant declines in hospital prices. Changes in a subpopulation of employees enrolled in higher cost-sharing plans were also examined., Main Outcomes and Measures: The primary outcome was outpatient out-of-pocket spending per procedure, which included the copayment, coinsurance, and/or deductible paid at the point of service. Changes in service use were also examined by counting the number of outpatient procedures received per enrollee per year., Results: The outpatient sample included 1 094 083 procedures from 92 523 Oregon educators and 4 510 342 procedures from 473 621 control enrollees. During the period before implementation, Oregon educators had higher out-of-pocket spending per outpatient procedure than the control group ($69.26 vs $41.87). The hospital payment cap was associated with a $6.60, or 9.5%, reduction in out-of-pocket spending per procedure (95% CI, -12.7 to -0.5) and a 0.24, or 4.8%, increase in the number of outpatient procedures received per enrollee per year (95% CI, 0.09-0.39) among those in higher cost-sharing plans. Enrollees receiving outpatient services from October 2019 through December 2021 saved an estimated $1.8 million. However, savings for the state were $10.3 million less than they would have been absent increases in service use., Conclusions and Relevance: The study findings suggest that enrollees may benefit from reduced out-of-pocket spending due to hospital price regulations, but states should be mindful that price regulations may inadvertently increase health care service use.

Importance: Medicare Advantage (MA) has grown in popularity, but critics believe that insurers are overpaid, partially due to the quartile adjustment system that determines plan benchmarks. However, elimination of the quartile adjustments may be associated with less generous benefits and fewer plan offerings, which could slow MA enrollment growth., Objective: To examine whether the quartile adjustment system is associated with differences in county-level benefits, insurer offerings, and MA enrollment., Design, Setting, and Participants: The quartile adjustments create discontinuous jumps in county-level base payments based on historical traditional Medicare spending. Data from January 2017 to December 2021 and a regression discontinuity design were used to examine changes in insurer behavior and MA enrollment between quartiles. The analytic sample included 1557 county observations., Main Outcomes and Measures: Study outcomes included monthly premiums, the share of plans charging premiums, primary care copayments, the share of plans using rebates to reduce Part B premiums, supplemental benefits, plan and contract availability, and MA enrollment., Results: Discontinuities were found in the quartile adjustments and benchmarks. A 1-percentage point (pp) increase in the quartile adjustment was associated with a $6.36 increase in monthly benchmarks (95% CI, 5.10-7.62), a $0.51 decrease in monthly premiums (95% CI, -0.96 to -0.07), and a 0.68 pp decrease in the share of plans charging premiums (95% CI, -1.25 to -0.10). Significant changes were not found in primary care copayments (-$0.04; 95% CI, -0.17 to 0.09), the share of plans using rebates to reduce Part B premiums (-0.17 pp; 95% CI, -0.34 to 0.01), supplemental benefits (eg, preventive dental coverage; 0.17 pp; 95% CI, -0.25 to 0.0), the number of plans (1.06; 95% CI, -3.44 to 5.57) or contracts (0.31; 95% CI, -0.18 to 0.81), or the MA enrollment rate (0.16 pp; 95% CI, -0.61 to 0.94)., Conclusions and Relevance: The study results suggest that MA plans are not very sensitive to modest changes in payment rates. Modifications to the quartile adjustment system may generate savings without substantially affecting MA beneficiaries.

Importance: The Medicare Shared Savings Program (MSSP) is the largest and most important alternative payment model that has been implemented by the Centers for Medicare & Medicaid Services (CMS). Its budgetary impact to CMS is not well understood., Objective: To evaluate the association between the MSSP and net savings to CMS for performance years 2013 to 2021., Design, Setting, and Participants: The economic evaluation used publicly reported data on the MSSP from April 1, 2012, to December 31, 2021, and estimates extracted from 2 prior studies., Main Outcomes and Measures: Net savings to CMS, calculated as the difference between incentive payments to MSSP accountable care organizations and gross spending reductions. Incentive payments were calculated using the publicly reported data. The association of the MSSP with gross medical spending in traditional Medicare was extracted from 2 prior studies. Spillovers of the MSSP to Medicare Advantage (MA) were estimated by evaluating how gross spending reductions from the MSSP impacted benchmark payments to MA plans. Savings from traditional Medicare and MA were then combined., Results: The MSSP was associated with net losses to traditional Medicare of between $584 million and $1.423 billion over the study period. Savings from MSSP-related reductions to MA benchmarks totaled between $4.480 billion and $4.923 billion. Across traditional Medicare and MA, the MSSP was associated with savings of between $3.057 billion and $4.339 billion. This represents approximately 0.075% of combined spending for traditional Medicare and MA over the study period., Conclusions and Relevance: This economic evaluation found that the MSSP was associated with net losses to traditional Medicare, net savings to MA, and overall net savings to CMS. The total budget impact of the MSSP to CMS was small and continues to be uncertain due to challenges in estimating the effects of the MSSP on gross spending, particularly in recent years.

Importance: The Medicare Advantage (MA) program is rapidly growing. While previous work has found that beneficiaries with substantial health needs disenroll from plans at higher rates, the long-term frequency of disenrollment is not well understood., Objective: To compare cumulative disenrollment trends in the MA program by beneficiary and plan characteristics., Design, Setting, and Participants: This retrospective, serial cross-sectional study included beneficiaries with any MA enrollment from January 1, 2011, to December 31, 2020. Data analysis took place from September 2022 to March 2023., Exposures: Beneficiary characteristics, including race and ethnicity, length of Medicare enrollment, dual eligibility, and comorbidity burden, and contract characteristics, including vertical integration status, premium, and MA star rating., Main Outcomes and Measures: The main outcome was disenrollment from an MA contract within 5 years. Rates of cumulative disenrollment by beneficiary and contract characteristics were compared. Pearson correlation coefficients were calculated to assess the correlation between a contract's 1-year disenrollment and the contract's disenrollment over a longer period., Results: The sample included 82 377 917 beneficiaries (524 442 225 beneficiary-year observations; 56.7% female; mean [SD] age, 71.9 [10.3] years). After 1 year, 13.2% of nondually enrolled and 15.9% of dually enrolled beneficiaries had left their contract, increasing to 48.3% and 53.4%, respectively, after 5 years. Black enrollees disenrolled at the highest rates among race and ethnicity categories, with 14.8% disenrolling after 1 year and 52.6% disenrolling after 5 years. Contracts had a median disenrollment rate of 9.8% (IQR, 4.5%-19.0%) after 1 year and 56.1% (IQR, 23.1%-79.0%) after 5 years. Contracts rated 5 stars had substantially lower 5-year disenrollment rates (23.0% after 5 years compared with 41.2% for 4- to 4.5-star contracts and 67.2% for 3- to 3.5-star contracts). Disenrollment from a contract after 1 year was not well correlated with disenrollment after 5 years (r, 0.46)., Conclusions and Relevance: This cross-sectional study found substantial cumulative rates of disenrollment from MA plans within 5 years between 2011 and 2020, with wide variation in 5-year disenrollment by contract. The findings suggest that evaluating long-term disenrollment rates in MA performance measures may capture different outcomes than single-year disenrollment alone.

Importance: Although Medicare accountable care organizations (ACOs) account for half of program expenditures, whether ACOs are associated with surgical spending warrants further study., Objective: To assess whether greater beneficiary-hospital ACO alignment was associated with lower surgical episode costs., Design, Setting, and Participants: This retrospective cohort study was conducted between 2020 and 2022 using US Medicare data from a 20% random sample of beneficiaries. Individuals 18 years of age and older and without kidney failure who had a surgical admission between 2008 and 2015 were included. For each study year, distinction was made between beneficiaries assigned to an ACO and those who were not, as well as between admissions to ACO-participating and nonparticipating hospitals., Exposures: Time-varying binary indicators for beneficiary ACO assignment and hospital ACO participation and an interaction between them., Main Outcomes and Measures: Ninety-day, price-standardized total episode payments. Multivariable 2-way fixed-effects models were estimated., Results: During the study period, 2 797 337 surgical admissions (6% of which involved ACO-assigned beneficiaries) occurred at 3427 hospitals (17% ACO participating). Total Medicare payments for 90-day surgical episodes were lowest when ACO-assigned beneficiaries underwent surgery at a hospital participating in the same ACO as the beneficiary ($26 635 [95% CI, $26 426-$26 844]). The highest payments were for unassigned beneficiaries treated at participating hospitals ($27 373 [95% CI, $27 232-$27 514]) or nonparticipating hospitals ($27 303 [95% CI, $27 291-$27 314]). Assigned beneficiaries treated at hospitals participating in a different ACO and assigned beneficiaries treated at nonparticipating hospitals had similar payments (for participating hospitals, $27 003 [95% CI, $26 739-$27 267] and for nonparticipating hospitals, $26 928 [95% CI, $26 796-$27 059]). A notable factor in the observed differences in surgical episode costs was lower spending on postacute care services., Conclusions and Relevance: In this cohort study evaluating hospital and beneficiary ACO alignment and surgical spending, savings were noted for beneficiaries treated at hospitals in the same ACO. Allowing ACOs to encourage or require surgical procedures in their own hospitals could lower Medicare spending on surgery.

Importance: Bundled Payments for Care Improvement Advanced (BPCI-A) is a Centers for Medicare & Medicaid Services (CMS) initiative that aims to produce financial savings by incentivizing decreases in clinical spending. Incentives consist of financial bonuses from CMS to hospitals or penalties paid by hospitals to CMS., Objective: To investigate the association of hospital participation in BPCI-A with spending, and to characterize hospitals receiving financial bonuses vs penalties., Design, Setting, and Participants: Difference-in-differences and cross-sectional analyses of 4 754 139 patient episodes using 2013-2019 US Medicare claims at 694 participating and 2852 nonparticipating hospitals merged with hospital and market characteristics., Exposures: BPCI-A model years 1 and 2 (October 1, 2018, through December 31, 2019)., Main Outcomes and Measures: Hospitals' per-episode spending, CMS gross and net spending, and the incentive allocated to each hospital., Results: The study identified 694 participating hospitals. The analysis observed a -$175 change in mean per-episode spending (95% CI, -$378 to $28) and an aggregate spending change of -$75.1 million (95% CI, -$162.1 million to $12.0 million) across the 428 670 episodes in BPCI-A model years 1 and 2. However, CMS disbursed $354.3 million (95% CI, $212.0 million to $496.0 million) more in bonuses than it received in penalties. Hospital participation in BPCI-A was associated with a net loss to CMS of $279.2 million (95% CI, $135.0 million to $423.0 million). Hospitals in the lowest quartile of Medicaid days received a mean penalty of $0.41 million; (95% CI, $0.09 million to $0.72 million), while those in the highest quartile received a mean bonus of $1.57 million; (95% CI, $1.09 million to $2.08 million). Similar patterns were observed for hospitals across increasing quartiles of Disproportionate Share Hospital percentage and of patients from racial and ethnic minority groups., Conclusions and Relevance: Among US hospitals measured between 2013 and 2019, participation in BPCI-A was significantly associated with an increase in net CMS spending. Bonuses accrued disproportionately to hospitals providing care for marginalized communities.

Importance: The Medicare Shared Savings Program provides financial incentives for accountable care organizations (ACOs) to reduce costs of care. The structure of the shared savings program may not adequately adjust for challenges associated with caring for patients with high medical complexity and social needs, a population disproportionately made up of racial and ethnic minority groups. If so, ACOs serving racial and ethnic minority groups may be more likely to exit the program, raising concerns about the equitable distribution of potential benefits from health care delivery reform efforts., Objective: To evaluate whether ACOs with a high proportion of beneficaries of racial and ethnic minority groups are more likely to exit the Medicare Shared Savings Program and identify characteristics associated with this disparity., Design, Setting, and Participants: This retrospective observational cohort study used secondary data on Medicare Shared Savings Program ACOs from January 2012 through December 2018. Bivariate and multivariate cross-sectional regression analyses were used to understand whether ACO racial and ethnic composition was associated with program exit, and how ACOs with a high proportion of beneficaries of racial and ethnic minority groups differed in characteristics associated with program exit., Exposures: Racial and ethnic composition of an ACO's beneficiaries., Main Outcomes and Measures: Shared savings program exit before 2018., Results: The study included 589 Medicare Shared Savings Program ACOs. The ACOs in the highest quartile of proportion of beneficaries of racial and ethnic minority groups were designated high-proportion ACOs (145 [25%]), and those in the lowest 3 quartiles were designated low-proportion ACOs (444 [75%]). In unadjusted analysis, a 10-percentage point increase in the proportion of beneficiaries of racial and ethnic minority groups was associated with a 1.12-fold increase in the odds of an ACO exit (95% CI, 1.00-1.25; P = .04). In adjusted analysis, there were significant associations among high-proportion ACOs between characteristics such as patient comorbidities, disability, and clinician composition and a higher likelihood of exit., Conclusions and Relevance: The study results suggest that ACOs that served a higher proportion of beneficaries of racial and ethnic minority groups were more likely to exit the Medicare Shared Savings Program, partially because of serving patients with greater disease severity and complexity. These findings raise concerns about how current payment reform efforts may differentially affect racial and ethnic minority groups.

This study uses Medicare and Medicare Advantage data to describe differences in quality care between Hispanic and non-Hispanic White patients and the association with double bonuses under Medicare Advantage., Competing Interests: Conflict of Interest Disclosures: Dr Ayanian reported grants from the National Institute on Aging during the conduct of the study, grants from Michigan Department of Health and Human Services, grants from the National Library of Medicine, personal fees from the JAMA Network, personal fees from the New England Journal of Medicine, personal fees from Harvard University, personal fees from the University of Chicago, personal fees from the University of California San Diego, nonfinancial support from the National Academy of Medicine, nonfinancial support from the National Institutes of Health, and nonfinancial support from AcademyHealth outside the submitted work and is a Physicians Health Plan board member representing the University of Michigan. No other disclosures were reported., (Copyright 2022 Markovitz AA et al. JAMA Health Forum.)

Importance: Policy makers envision synergistic benefits from primary care reform programs that advance infrastructure and processes in the context of a supportive payment environment. However, these programs have been operationalized and implemented separately, raising the question of whether synergies are achieved., Objective: To evaluate associations between primary care engagement in voluntary delivery system and/or payment reform programs and health services outcomes., Design Setting and Participants: This was an observational longitudinal analysis of US ambulatory primary care organizations (PCOs) with attributed Medicare fee-for-service beneficiaries (1.6-1.9 million unique beneficiaries annually) using data for 2009, 2010, and 2015 to 2017; PCOs included multispecialty practices that delivered primary care. Data analyses were performed from January 2020 to December 2021., Exposures: Annual PCO participation in or recognition by (1) the Centers for Medicare & Medicaid's meaningful use (MU) program, (2) the National Committee for Quality Assurance's Patient-Centered Medical Home (PCMH) program, and/or (3) the Medicare Shared Savings Program (MSSP), an Accountable Care Organizations program., Main Outcomes and Measures: Independent and joint associations between an additional year of participation by a PCO in each of the 3 reform programs, and 3 types of outcomes: (1) hospital utilization (all-cause admissions, ambulatory care sensitive admissions, all-cause readmissions, all-cause emergency department visits); (2) evidence-based diabetes guideline adherence (≥1 annual glycated hemoglobin test, low-density lipoprotein cholesterol test, nephropathy screening, and eye examination); and (3) Medicare spending (total, acute inpatient, and skilled nursing facility)., Results: The study sample comprised 47 880 unique PCOs (size ≤10 beneficiaries, 50%; ≤1-2 clinicians, 65%) and approximately 5.61 million unique Medicare beneficiaries (mean [SD] age, 71.4 [12.7] years; 3 207 568 [57.14%] women; 4 474 541 [79.71%] non-Hispanic White individuals) across the study years (2009, 2010, 2015-2017). Of the hospital utilization measures, only ambulatory care sensitive admission was associated with improved performance, showing a statistically significant marginal effect size for joint participation in MU and MSSP (-0.0002; 95% CI, -0.0005 to 0.0000) and MSSP alone (-0.0003; 95% CI, -0.0005 to -0.0001). For diabetes adherence, joint participation in PCMH and MU was associated with 0.06 more measures met (95% CI, 0.03 to 0.10) while participation in all 3 programs was associated with 0.05 more measures met (95% CI, 0.02 to 0.09). Stand-alone PCMH and stand-alone MU participation were also associated with improved performance. Joint participation in MU and MSSP was associated with $33.89 lower spending (95% CI, -$65.79 to -$1.99) as was stand-alone MSSP participation (-$37.04; 95% CI, -$65.73 to -$8.35)., Conclusions and Relevance: This longitudinal observational study found that participation by PCOs in single or multiple reform programs was associated with better performance for only a subset of health services outcomes. More consistent and larger synergies may be realized with improved alignment of program requirements and goals., Competing Interests: Conflict of Interest Disclosures: None reported., (Copyright 2022 Adler-Milstein J et al. JAMA Health Forum.)

Importance: Under the Patient Protection and Affordable Care Act (ACA), US hospitals were exposed to a number of reforms intended to reduce spending, many of which, beginning in 2012, targeted acute care hospitals and often focused on specific diagnoses (eg, acute myocardial infarction, heart failure, and pneumonia) for Medicare patients. Other provisions enacted in the ACA and under budget sequestration (beginning in 2013) mandated Medicare fee cuts., Objective: To evaluate the association between the enactment of ACA reforms and 30-day price-standardized hospital episode spending., Design, Setting, and Participants: This policy evaluation included index discharges between January 1, 2008, and August 31, 2015, from a national random 20% sample of Medicare beneficiaries. Data analysis was performed from February 1, 2019 to July 8, 2020., Exposure: Payment reforms after passage of the ACA., Main Outcomes and Measures: 30-day price-standardized episode payments. Three alternative estimation approaches were used to evaluate the association between reforms following the ACA and episode spending: (1) a difference-in-difference (DID) analysis among acute care hospitals, comparing spending for diagnoses commonly targeted by ACA programs with nontargeted diagnoses; (2) a DID analysis comparing acute care hospitals and critical access hospitals (not exposed to reforms); and (3) a generalized synthetic control analysis, comparing acute care and critical access hospitals. Supplemental analysis examined the degree to which Medicare fee cuts contributed to spending reductions., Results: A total of 7 634 242 index discharges (4 525 630 [59.2%] female patients; mean [SD] age, 79.31 [8.02] years) were included. All 3 approaches found that reforms following the ACA were associated with a significant reduction in episode spending. The DID estimate comparing targeted and untargeted diagnoses suggested that reforms following the ACA were associated with a -$431 (95% CI, -$492 to -$369; -2.87%) change in total spending, while the generalized synthetic control analysis suggested that reforms were associated with a -$1232 (95% CI, -$1488 to -$965; -10.12%) change in total episode spending, amounting in a total annual savings of $5.68 billion. Cuts to Medicare fees accounted for most of these savings., Conclusions and Relevance: In this policy evaluation, the ACA was associated with large reductions in US hospital episode spending.

Importance: The Centers for Medicare & Medicaid Services is beginning to consider adjusting for social risk factors, such as dual eligibility for Medicare and Medicaid, when evaluating hospital performance under value-based purchasing programs. It is unknown whether dual eligibility represents a unique domain of social risk or instead represents clinical risk unmeasured by variables available in traditional Medicare claims., Objective: To assess how dual eligibility for Medicare and Medicaid is associated with risk-adjusted readmission rates after surgery., Design, Setting, and Participants: A retrospective cohort study was conducted of 55 651 Medicare beneficiaries undergoing general, vascular, and gynecologic surgery at 62 hospitals in Michigan between January 1, 2014, and December 1, 2016. Representative cohorts were derived from traditional Medicare claims (n = 29 710) and the Michigan Surgical Quality Collaborative (MSQC) clinical registry (n = 25 941), which includes additional measures of clinical risk. Statistical analysis was conducted between April 10 and July 15, 2019. The association between dual eligibility and risk-adjusted 30-day readmission rates after surgery was compared between models inclusive and exclusive of additional measurements of clinical risk. The study also examined how dual eligibility is associated with hospital profiling using risk-adjusted readmission rates., Exposures: Dual eligibility for Medicare and Medicaid., Main Outcomes and Measures: Risk-adjusted all-cause 30-day readmission after surgery., Results: There were a total of 3986 dual-eligible beneficiaries in the Medicare claims cohort (2554 women; mean [SD] age, 72.9 [6.9] years) and 1608 dual-eligible beneficiaries in the MSQC cohort (990 women; mean [SD] age, 72.9 [6.8] years). In both data sets, higher proportions of dual-eligible beneficiaries were younger, female, and nonwhite than Medicare-only beneficiaries (Medicare claims cohort: female, 2554 of 3986 [64.1%] vs 12 879 of 25 724 [50.1%]; nonwhite, 1225 of 3986 [30.7%] vs 2783 of 25 724 [10.8%]; MSQC cohort: female, 990 of 1608 [61.6%] vs 12 578 of 24 333 [51.7%]; nonwhite, 416 of 1608 [25.9%] vs 2176 of 24 333 [8.9%]). In the Medicare claims cohort, dual-eligible beneficiaries were more likely to be readmitted (15.5% [95% CI, 13.7%-17.3%]) than Medicare-only beneficiaries (13.3% [95% CI, 12.7%-13.9%]; difference, 2.2 percentage points [95% CI, 0.4-3.9 percentage points]). In the MSQC cohort, after adjustment for more granular measures of clinical risk, dual eligibility was not significantly associated with readmission (difference, 0.6 percentage points [95% CI, -1.0 to 2.2 percentage points]). In both the Medicare claims and MSQC cohorts, adding dual eligibility to risk-adjustment models had little association with hospital ranking using risk-adjusted readmission rates., Conclusions and Relevance: This study suggests that dual eligibility for Medicare and Medicaid may reflect unmeasured clinical risk of readmission in claims data. Policy makers should consider incorporating more robust measures of social risk into risk-adjustment models used by value-based purchasing programs.

Importance: Privately insured patients who receive care from in-network physicians may receive unexpected out-of-network bills ("surprise bills") from out-of-network clinicians they did not choose. In elective surgery, this can occur if patients choose in-network surgeons and hospitals but receive out-of-network bills from other involved clinicians., Objective: To evaluate out-of-network billing across common elective operations performed with in-network primary surgeons and facilities., Design, Setting, and Participants: Retrospective analysis of claims data from a large US commercial insurer, representing 347 356 patients who had undergone 1 of 7 common elective operations (arthroscopic meniscal repair [116 749]; laparoscopic cholecystectomy [82 372]; hysterectomy [67 452]; total knee replacement [42 313]; breast lumpectomy [18 018]; colectomy [14 074]; coronary artery bypass graft surgery [6378]) by an in-network primary surgeon at an in-network facility between January 1, 2012, and September 30, 2017. Follow-up ended November 8, 2017., Exposure: Patient, clinician, and insurance factors potentially related to out-of-network bills., Main Outcomes and Measures: The primary outcome was the proportion of episodes with out-of-network bills. The secondary outcome was the estimated potential balance bill associated with out-of-network bills from each surgical procedure, calculated as total out-of-network charges less the typical in-network price for the same service., Results: Among 347 356 patients (mean age, 48 [SD, 11] years; 66% women) who underwent surgery with in-network primary surgeons and facilities, 20.5% of episodes (95% CI, 19.4%-21.7%) had an out-of-network bill. In these episodes, the mean potential balance bill per episode was $2011 (95% CI, $1866-$2157) when present. Out-of-network bills were associated with surgical assistants in 37% of these episodes; when present, the mean potential balance bill was $3633 (95% CI, $3384-$3883). Out-of-network bills were associated with anesthesiologists in 37% of episodes; when present, the mean potential balance bill was $1219 (95% CI, $1049-$1388). Membership in health insurance exchange plans, compared with nonexchange plans, was associated with a significantly higher risk of out-of-network bills (27% vs 20%, respectively; risk difference, 6% [95% CI, 3.9%-8.9%]; P < .001). Surgical complications were associated with a significantly higher risk of out-of-network bills, compared with episodes with no complications (28% vs 20%, respectively; risk difference, 7% [95% CI, 5.8%-8.8%]; P < .001). Among 83 021 procedures performed at ambulatory surgery centers with in-network primary surgeons, 6.7% (95% CI, 5.8%-7.7%) included an out-of-network facility bill and 17.2% (95% CI, 15.7%-18.8%) included an out-of-network professional bill., Conclusions and Relevance: In this retrospective analysis of commercially insured patients who had undergone elective surgery at in-network facilities with in-network primary surgeons, a substantial proportion of operations were associated with out-of-network bills.

Importance: The measured severity of illness of hospitalized Medicare beneficiaries has increased. Whether this change is associated with payment reforms, concentrated among hospitalizations with principal diagnoses targeted by payment reform, and reflective of true increases in severity of illness is unknown., Objectives: To assess whether the expansion of secondary diagnosis codes in January 2011 and the incentive payments for health information technology under the US Health Information Technology for Economic and Clinical Health Act were associated with changes in measured severity of illness and whether those changes are reflective of true increases in underlying patient severity., Design, Setting, and Participants: This cohort study of Medicare fee-for-service beneficiary discharges (N = 47 951 443) between January 1, 2008, and August 31, 2015, used a regression-discontinuity design to evaluate changes in measured severity of illness after the expansion of secondary diagnoses. Discharge-level linear regression model with hospital fixed effects was used to evaluate changes in measured severity of illness after hospitals' receipt of incentives for health information technology. The change in predictive accuracy of measured severity of illness on 30-day readmissions after the implementation of both policies was evaluated. Data analysis was performed from November 1, 2018, to March 5, 2019., Main Outcomes and Measures: The primary outcome was patients' measured severity of illness determined by the number of condition categories from secondary discharge diagnosis codes. Measured severity of illness for diagnoses commonly targeted by Medicare policies and untargeted diagnoses was assessed., Results: In total, 47 951 443 discharges at 2850 hospitals were included. In 2008, these beneficiaries included 3 882 672 women (58.5%) with a mean (SD) age of 78.5 (8.4) years. In 2014, the discharges included 3 377 137 women (57.8%) with the mean (SD) age of 78.4 (8.7) years. The Centers for Medicare & Medicaid Services expansion of secondary diagnoses was associated with a 0.348 (95% CI, 0.328-0.367; P < .001) change in condition categories for all diagnoses, 0.445 (95% CI, 0.419-0.470; P < .001) for targeted diagnoses, and 0.321 (95% CI, 0.302-0.341; P < .001) for untargeted diagnoses. Health information technology incentives were associated with a 0.013 (95% CI, 0.004-0.022; P = .005) change in condition categories for all diagnoses, 0.195 (95% CI, 0.184-0.207; P < .001) for targeted diagnoses, and -0.016 (95% CI, -0.025 to -0.007; P < .001) for untargeted diagnoses. Minimal improvements in predictive accuracy were observed., Conclusions and Relevance: Changes in Centers for Medicare & Medicaid Services policies appear to be associated with increases in measured severity of illness; these increases do not appear to reflect substantive changes in true patient severity.

Importance: Medicare is experimenting with numerous concurrent reforms aimed at improving quality and value for hospitals. It is unclear if these myriad reforms are mutually reinforcing or in conflict with each other., Objective: To evaluate whether hospital participation in voluntary value-based reforms was associated with greater improvement under Medicare's Hospital Readmission Reduction Program (HRRP)., Design, Setting, and Participants: Retrospective, longitudinal study using publicly available national data from Hospital Compare on hospital readmissions for 2837 hospitals from 2008 to 2015. We assessed hospital participation in 3 voluntary value-based reforms: Meaningful Use of Electronic Health Records; the Bundled Payment for Care Initiative episode-based payment program (BPCI); and Medicare's Pioneer and Shared Savings accountable care organization (ACO) programs. We used an interrupted time series design to test whether hospitals' time-varying participation in these value-based reforms was associated with greater improvement in Medicare's HRRP., Main Outcomes and Measures: Thirty-day risk standardized readmission rates for acute myocardial infarction (AMI), heart failure, and pneumonia., Results: Among the 2837 hospitals in this study, participation in value-based reforms varied considerably over the study period. In 2010, no hospitals were participating in the meaningful use, ACO, or BPCI programs. By 2015, only 56 hospitals were not participating in at least 1 of these programs. Among hospitals that did not participate in any voluntary reforms, the association between the HRRP and 30-day readmission was -0.76 percentage points for AMI (95% CI, -0.93 to -0.60), -1.30 percentage points for heart failure (95% CI, -1.47 to -1.13), and -0.82 percentage points for pneumonia (95% CI, -0.97 to -0.67). Participation in the meaningful use program alone was associated with an additional change in 30-day readmissions of -0.78 percentage points for AMI (95% CI, -0.89 to -0.67), -0.97 percentage points for heart failure (95% CI, -1.08 to -0.86), and -0.56 percentage points for pneumonia (95% CI, -0.65 to -0.47). Participation in ACO programs alone was associated with an additional change in 30-day readmissions of -0.94 percentage points for AMI (95% CI, -1.29 to -0.59), -0.83 percentage points for heart failure (95% CI, -1.26 to -0.41), and -0.59 percentage points for pneumonia (95% CI, -1.00 to -0.18). Participation in multiple reforms led to greater improvement: participation in all 3 programs was associated with an additional change in 30-day readmissions of -1.27 percentage points for AMI (95% CI, -1.58 to -0.97), -1.64 percentage points for heart failure (95% CI, -2.02 to -1.26), and -1.05 percentage points for pneumonia (95% CI, -1.32 to -0.78)., Conclusions and Relevance: Hospital participation in voluntary value-based reforms was associated with greater reductions in readmissions. Our findings lend support for Medicare's multipronged strategy to improve hospital quality and value.

Importance: Under the Comprehensive Care for Joint Replacement (CJR) model, hospitals are held accountable for nearly all Medicare payments that occur during the initial hospitalization until 90 days after hospital discharge (ie, the episode of care). It is not known whether unrelated expenditures resulting from this "broad" definition of an episode of care will affect participating hospitals' average episode-of-care payments., Objective: To compare the CJR program's broad definition of an episode of care with a clinically narrow definition of an episode of care., Design, Setting, and Participants: We identified Medicare claims for 23 251 patients in Michigan who were Medicare beneficiaries and who underwent joint replacement during the period from 2011 through 2013 at hospitals located in metropolitan statistical areas. Using specifications from the CJR model and the clinically narrow Hospital Compare payment measure, we constructed episodes of care and calculated 90-day episode payments. We then compared hospitals' average 90-day episode payments using the 2 definitions of an episode of care and fit linear regression models to understand whether payment differences were associated with specific hospital characteristics (average Centers for Medicare & Medicaid Services-hierarchical condition categories risk score, rural hospital status, joint replacement volume, percentage of Medicaid discharges, teaching hospital status, number of beds, percentage of joint replacements performed on African American patients, and median income of the hospital's county). We performed analyses from July 1 through October 1, 2015., Main Outcomes and Measures: The correlation and difference between average 90-day episode payments using the broad definition of an episode of care in the CJR model and the clinically narrow Hospital Compare definition of an episode of care., Results: We identified 23 251 joint replacements (ie, episodes of care). The 90-day episode payments using the broad definition of the CJR model ranged from $17 349 to $29 465 (mean [SD] payment, $22 122 [$2600]). Episode payments were slightly lower (mean payment, $21 670) when the Hospital Compare definition was used. Both methods were strongly correlated (r = 0.99, P < .001). The average payment difference between these 2 types of episodes of care was small (mean [SD], $452 [$177]; range, $73-$1006). In our multivariable analysis, we found that the hospital characteristics examined had a minimal impact or no impact on the payment differential., Conclusions and Relevance: The average 90-day episode payments determined by both definitions of an episode of care were strongly correlated, and there was a small payment differential for most hospitals. In the context of joint replacement bundled payments, these data suggest that hospital performance will be consistent whether a broad or clinically narrow definition of an episode of care is used.

Importance: Patients' out-of-pocket spending for major health care expenses, such as inpatient care, may result in substantial financial distress. Limited contemporary data exist on out-of-pocket spending among nonelderly adults., Objectives: To evaluate out-of-pocket spending associated with hospitalizations and to assess how this spending varied over time and by patient characteristics, region, and type of insurance., Design, Setting, and Participants: A retrospective analysis of medical claims for 7.3 million hospitalizations using 2009-2013 data from Aetna, UnitedHealthcare, and Humana insurance companies representing approximately 50 million members was performed. Out-of-pocket spending was evaluated by age, sex, type of insurance, region, and principal diagnosis or procedure for hospitalized adults aged 18 to 64 years who were enrolled in employer-sponsored and individual-market health insurance plans from January 1, 2009, to December 31, 2013. The study was conducted between July 1, 2015, and March 1, 2016., Main Outcomes and Measures: Primary outcomes were total out-of-pocket spending and spending attributed to deductibles, copayments, and coinsurance for all hospitalizations. Other outcomes included out-of-pocket spending associated with 7 commonly occurring inpatient diagnoses and procedures: acute myocardial infarction, live birth, pneumonia, appendicitis, coronary artery bypass graft, total knee arthroplasty, and spinal fusion., Results: From 2009 to 2013, total cost sharing per inpatient hospitalization increased by 37%, from $738 in 2009 (95% CI, $736-$740) to $1013 in 2013 (95% CI, $1011-$1016), after adjusting for inflation and case-mix differences. This rise was driven primarily by increases in the amount applied to deductibles, which grew by 86% from $145 in 2009 (95% CI, $144-$146) to $270 in 2013 (95% CI, $269-$271), and by increases in coinsurance, which grew by 33% over the study period from $518 in 2009 (95% CI, $516-$520) to $688 in 2013 (95% CI, $686-$690). In 2013, total cost sharing was highest for enrollees in individual market plans ($1875 per hospitalization; 95% CI, $1867-$1883) and consumer-directed health plans ($1219; 95% CI, $1216-$1223). Cost sharing varied substantially across regions, diagnoses, and procedures., Conclusions and Relevance: Mean out-of-pocket spending among commercially insured adults exceeded $1000 per inpatient hospitalization in 2013. Wide variability in out-of-pocket spending merits greater attention from policymakers.

Importance: Among patients whose need for intensive care is uncertain, the relationship of intensive care unit (ICU) admission with mortality and costs is unknown., Objective: To estimate the relationship between ICU admission and outcomes for elderly patients with pneumonia., Design, Setting, and Patients: Retrospective cohort study of Medicare beneficiaries (aged >64 years) admitted to 2988 acute care hospitals in the United States with pneumonia from 2010 to 2012., Exposures: ICU admission vs general ward admission., Main Outcomes and Measures: Primary outcome was 30-day all-cause mortality. Secondary outcomes included Medicare spending and hospital costs. Patient and hospital characteristics were adjusted to account for differences between patients with and without ICU admission. To account for unmeasured confounding, an instrumental variable was used-the differential distance to a hospital with high ICU admission (defined as any hospital in the upper 2 quintiles of ICU use)., Results: Among 1,112,394 Medicare beneficiaries with pneumonia, 328,404 (30%) were admitted to the ICU. In unadjusted analyses, patients admitted to the ICU had significantly higher 30-day mortality, Medicare spending, and hospital costs than patients admitted to a general hospital ward. Patients (n = 553,597) living closer than the median differential distance (<3.3 miles) to a hospital with high ICU admission were significantly more likely to be admitted to the ICU than patients living farther away (n = 558,797) (36% for patients living closer vs 23% for patients living farther, P < .001). In adjusted analyses, for the 13% of patients whose ICU admission decision appeared to be discretionary (dependent only on distance), ICU admission was associated with a significantly lower adjusted 30-day mortality (14.8% for ICU admission vs 20.5% for general ward admission, P = .02; absolute decrease, -5.7% [95% CI, -10.6%, -0.9%]), yet there were no significant differences in Medicare spending or hospital costs for the hospitalization., Conclusions and Relevance: Among Medicare beneficiaries hospitalized with pneumonia, ICU admission of patients for whom the decision appeared to be discretionary was associated with improved survival and no significant difference in costs. A randomized trial may be warranted to assess whether more liberal ICU admission policies improve mortality for patients with pneumonia.

Importance: The American College of Surgeons National Surgical Quality Improvement Program (ACS NSQIP) provides feedback to hospitals on risk-adjusted outcomes. It is not known if participation in the program improves outcomes and reduces costs relative to nonparticipating hospitals., Objective: To evaluate the association of enrollment and participation in the ACS NSQIP with outcomes and Medicare payments compared with control hospitals that did not participate in the program., Design, Setting, and Participants: Quasi-experimental study using national Medicare data (2003-2012) for a total of 1,226,479 patients undergoing general and vascular surgery at 263 hospitals participating in ACS NSQIP and 526 nonparticipating hospitals. A difference-in-differences analytic approach was used to evaluate whether participation in ACS NSQIP was associated with improved outcomes and reduced Medicare payments compared with nonparticipating hospitals that were otherwise similar. Control hospitals were selected using propensity score matching (2 control hospitals for each ACS NSQIP hospital)., Main Outcomes and Measures: Thirty-day mortality, serious complications (eg, pneumonia, myocardial infarction, or acute renal failure and a length of stay >75th percentile), reoperation, and readmission within 30 days. Hospital costs were assessed using price-standardized Medicare payments during hospitalization and 30 days after discharge., Results: After accounting for patient factors and preexisting time trends toward improved outcomes, there were no statistically significant improvements in outcomes at 1, 2, or 3 years after (vs before) enrollment in ACS NSQIP. For example, in analyses comparing outcomes at 3 years after (vs before) enrollment, there were no statistically significant differences in risk-adjusted 30-day mortality (4.3% after enrollment vs 4.5% before enrollment; relative risk [RR], 0.96 [95% CI, 0.89 to 1.03]), serious complications (11.1% after enrollment vs 11.0% before enrollment; RR, 0.96 [95% CI, 0.91 to 1.00]), reoperations (0.49% after enrollment vs 0.45% before enrollment; RR, 0.97 [95% CI, 0.77 to 1.16]), or readmissions (13.3% after enrollment vs 12.8% before enrollment; RR, 0.99 [95% CI, 0.96 to 1.03]). There were also no differences at 3 years after (vs before) enrollment in mean total Medicare payments ($40 [95% CI, -$268 to $348]), or payments for the index admission (-$11 [95% CI, -$278 to $257]), hospital readmission ($245 [95% CI, -$231 to $721]), or outliers (-$86 [95% CI, -$1666 to $1495])., Conclusions and Relevance: With time, hospitals had progressively better surgical outcomes but enrollment in a national quality reporting program was not associated with the improved outcomes or lower Medicare payments among surgical patients. Feedback on outcomes alone may not be sufficient to improve surgical outcomes.

Importance: Starting in 2006, the Centers for Medicare & Medicaid Services (CMS) has restricted coverage of bariatric surgery to hospitals designated as centers of excellence (COE) by 2 major professional organizations., Objective: To evaluate whether the implementation of the COE component of the national coverage decision was associated with improved bariatric surgery outcomes in Medicare patients., Design, Setting, and Patients: Retrospective, longitudinal study using 2004-2009 hospital discharge data from 12 states (n = 321,464 patients) of changes in outcomes in Medicare patients undergoing bariatric surgery (n = 6723 before and n = 15,854 after implementation of the policy). A difference-in-differences analytic approach was used to evaluate whether the national coverage decision was associated with improved outcomes in Medicare patients above and beyond existing time trends in non-Medicare patients (n = 95,558 before and n = 155,117 after implementation of the policy)., Main Outcome Measures: Risk-adjusted rates of any complication, serious complications, and reoperation., Results: Bariatric surgery outcomes improved during the study period in both Medicare and non-Medicare patients; however, this change was already under way prior to the CMS coverage decision. After accounting for patient factors, changes in procedure type, and preexisting time trends toward improved outcomes, there were no statistically significant improvements in outcomes after (vs before) implementation of the CMS national coverage decision for any complication (8.0% after vs 7.0% before; relative risk [RR], 1.14 [95% CI, 0.95-1.33]), serious complications (3.3% vs 3.6%, respectively; RR, 0.92 [95% CI, 0.62-1.22]), and reoperation (1.0% vs 1.1%; RR, 0.90 [95% CI, 0.64-1.17]). In a direct assessment comparing outcomes at hospitals designated as COEs (n = 179) vs hospitals without the COE designation (n = 519), no significant differences were found for any complication (5.5% vs 6.0%, respectively; RR, 0.98 [95% CI, 0.90-1.06]), serious complications (2.2% vs 2.5%; RR, 0.92 [95% CI, 0.84-1.00]), and reoperation (0.83% vs 0.96%; RR, 1.00 [95% CI, 0.86-1.17])., Conclusions and Relevance: Among Medicare patients undergoing bariatric surgery, there was no significant difference in the rates of complications and reoperation before vs after the CMS policy of restricting coverage to COEs. Combined with prior studies showing no association of COE designation and outcomes, these results suggest that Medicare should reconsider this policy.

Context: An analysis of paid malpractice claims may provide insight into the prevalence and seriousness of adverse medical events in the outpatient setting., Objective: To report and compare the number, magnitude, and type of paid malpractice claims for events in inpatient and outpatient settings., Design and Setting: Retrospective analysis of malpractice claims paid on behalf of physicians in outpatient and inpatient settings using data from the National Practitioner Data Bank from 2005 through 2009. We evaluated trends in claims paid by setting, characteristics of paid claims, and factors associated with payment amount., Main Outcome Measures: Number of paid claims, mean and median payment amounts, types of errors, and outcomes of errors., Results: In 2009, there were 10,739 malpractice claims paid on behalf of physicians. Of these paid claims, 4910 (47.6%; 95% confidence interval [CI], 46.6%-48.5%) were for events in the inpatient setting, 4448 (43.1%; 95% CI, 42.1%-44.0%) were for events in the outpatient setting, and 966 (9.4%; 95% CI, 8.8%-9.9%) involved events in both settings. The proportion of payments for events in the outpatient setting increased by a small but statistically significant amount, from 41.7% (95% CI, 40.9%-42.6%) in 2005 to 43.1% (95% CI, 42.1%-44.0%) in 2009 (P < .001 for trend across years). In the outpatient setting, the most common reason for a paid claim was diagnostic (45.9%; 95% CI, 44.4%-47.4%), whereas in the inpatient setting the most common reason was surgical (34.1%; 95% CI, 32.8%-35.4%). Major injury and death were the 2 most common outcomes in both settings. Mean payment amount for events in the inpatient setting was significantly higher than in the outpatient setting ($362,965; 95% CI, $348,192-$377,738 vs $290,111; 95% CI, $278,289-$301,934; P < .001)., Conclusion: In 2009, the number of paid malpractice claims reported to the National Practitioner Data Bank for events in the outpatient setting was similar to the number in the inpatient setting.