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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. [ABSTRACT FROM AUTHOR]

Background: Racial disparities in health care are widespread in the United States. Identifying contributing factors may improve care for underserved minorities. To the extent that differential utilization of services, based on need or biological effect, contributes to outcome disparities, prospective payment systems may require inclusion of race to minimize these adverse effects. This research determines whether costs associated with end-stage renal disease (ESRD) care varied by race and whether this variance affected payments to dialysis facilities. Study Design: We compared the classification of race across Medicare databases and investigated differences in cost of care for long-term dialysis patients by race. Setting & Participants: Medicare ESRD database including 890,776 patient-years in 2004-2006. Predictors: Patient race and ethnicity. Outcomes: Costs associated with ESRD care and estimated payments to dialysis facilities under a prospective payment system. Results: There were inconsistencies in race and ethnicity classification; however, there was significant agreement for classification of black and nonblack race across databases. In predictive models evaluating the cost of outpatient dialysis care for Medicare patients, race is a significant predictor of cost, particularly for cost of separately billed injectable medications used in dialysis. Overall, black patients had 9% higher costs than nonblack patients. In a model that did not adjust for race, other patient characteristics accounted for only 31% of this difference. Limitations: Lack of information about biological causes of the link between race and cost. Conclusions: There is a significant racial difference in the cost of providing dialysis care that is not accounted for by other factors that may be used to adjust payments. This difference has the potential to affect the delivery of care to certain populations. Of note, inclusion of race into a prospective payment system will require better understanding of biological differences in bone and anemia outcomes, as well as effects of inclusion on self-reported race. [ABSTRACT FROM AUTHOR]

Effective hospital revenue cycle management practices have gained in importance in today's hospital business environment, in which many hospitals are confronted with stricter regulations and billing requirements, more thorough preauthorization and precertification, underpayments, and greater delays in payments. In this article, we provide a brief description of current hospital revenue cycle management practices. Next, we suggest measures of the financial benefits of revenue cycle management in terms of increases in the amount and speed of patient revenue collection. We consider whether there is a trade-off between the amount of patient revenue a hospital earns and the speed with which revenue is collected. Using financial statement data from California hospitals for 2004 to 2006, we test empirically the relationships among key financial measures of effective hospital revenue cycle management. We find that hospitals with higher speeds of revenue collection tend to record higher amounts of net patient revenue per adjusted discharge, lower contractual allowances, and lower bad debts. Charity care provision, on the other hand, tends to be higher among hospitals with higher speeds of revenue collection. We conclude that there is no evidence of a trade-off between the amount of patient revenue and the speed of revenue collection but that these financial benefits of effective hospital revenue cycle management often go hand in hand. We thus provide early indication that these outcomes are complementary, suggesting that effective hospital revenue cycle management achieves multiple positive results. [ABSTRACT FROM AUTHOR]

Congress has required CMS to expand the Medicare outpatient prospective payment system (PPS) for dialysis services to include as many drugs and diagnostic procedures provided to end stage renal disease (ESRD) patients as possible. One important implementation question is whether dialysis facility case mix should be reflected in payment. We use fiscal year (FY) 2000 cost report and patient billing and clinical data to determine the relationship between costs and case mix, as represented by several patient demographic, diagnostic, and clinical characteristics. Results indicate considerable variability in costs and case mix across facilities and a significant and substantial relationship between case mix and facility cost, suggesting case mix payment adjustment may be important. [ABSTRACT FROM AUTHOR]

Background. Little is known about the organization and performance of outpatient substance abuse treatment (OSAT) centers. We examine several performance measures of OSAT units, including clients treated, services provided, revenue sources, financial performance, and access to care, in relation to ownership of the center. Methods. Data were drawn from a national random sample of 575 OSAT centers (85.8%) response rate) participating in a telephone survey conducted in 1988. Analysis of variance by ownership was conducted on each performance measure, with differences subjected to tests of statistical significance. Results. Descriptive results show that major funding sources differ by ownership. Private for-profit centers generate higher profits, charge higher prices, and achieve higher levels of financial performance than public and not-for-profit centers. Public centers provide better access to care for persons who are unable to pay. Conclusion. There appear to be substantial and interrelated differences by ownership type in the financing and operation of OSAT units. [ABSTRACT FROM AUTHOR]

Utilization review (UR) has become a prominent approach to cost containment now used by almost 65% of private group insurance plans. Although insurers have increasingly relied on UR to contain health care costs, until recently little was known about the effects of this cost containment approach. This article re views some of the key findings of a UR evaluation, based on analysis of claims data on 223 insured groups for the years 1984 through 1986. The evalu ation found that UR reduced admissions by 12%, in- patient expenditures by 8%, and total expenditures by 6%. It was estimated that UR generated net sav ings of $115 per employee per year. Groups adopting UR with high baseline rates of hospital use had larger expenditure reductions and greater net savings. It appears that UR can play an important role in private cost containment and help improve medical care re source consumption. [ABSTRACT FROM PUBLISHER]

Three alternative explanations for the effect of income on use of physician services for preventive care are evaluated. Path analysis is used to estimate the direct effect of income on use (the financial constraint explanation), the indirect effect of income through health beliefs (the culture of poverty explanation), and the indirect effect through the availability of a usual source of care (the system barrier explanation). Data for the analysis are from household interviews with 781 adult residents of Washtenaw County, Michigan. A general model of utilization of preventive health services is proposed that incorporates all three explanations. Path coefficients are estimated, and the direct and indirect effects of income on use are compared. The data reveal a negligible direct effect of income on preventive use, a positive indirect effect through perceived susceptibility to illness (one operationalization of the culture of poverty explanation), and a positive indirect effect through usual source of care. These findings are consistent with other recent research on the effect of income on health services utilization and contribute to a growing body of evidence which suggests that changes in the health care delivery system may be necessary if we are to achieve equity in the utilization of preventive care services. [ABSTRACT FROM AUTHOR]

Findings are presented from a seven-year (1976-83) evaluation of the Community Hospital Program (CHP), a national demonstration program sponsored by the Robert Wood Johnson Foundation to assist 54 community hospitals in improving the organization of access to primary care. Upon grant expiration, 66 per cent of hospital-sponsored group practices continued under some form of hospital sponsorship; over 90 per cent developed or were planning to develop spin-off programs; and new physicians were recruited and retained in the community. About 9 per cent of hospital admissions were accounted for by group physicians and grantee hospitals experienced a greater annual increase in their market share of admissions than competing hospitals in the area. While only three of the groups generated sufficient revenue to cover expenses during the grant period, 21 additional groups broke even during the first post-grant year. Productivity and cost per visit compared favorably with most other forms of care. Hospitalization rates from the hospital-sponsored practices were somewhat lower than those for other forms of care. Medical director leadership and involvement and the organization design of the practice were among several key factors associated with higher performing practices. The ability of such joint hospital-physician ventures to meet the needs of the poor and elderly in a time of Medicare and Medicaid cutbacks is discussed along with suggestions for targeting future initiatives in primary care. [ABSTRACT FROM AUTHOR]