First, it is important to determine what types of services are included in the PPS model to ensure accurate reimbursement levels. Medicare beneficiaries, and subgroups among them. Demographically, 48 percent are male, 58 percent married and 25 percent are over 85 years of age. Because the 1982 and 1984 samples were pooled for the GOM analysis, the case-mix groups that were derived were representative of both the pre- and post-PPS periods. A high risk of being bedfast (11 percent) or chairfast (32 percent) is characteristic of this group. This limitation restricted inferences about case-mix changes of hospital admissions, because lighter care patients who might have been admitted to inpatient hospital care were treated in outpatient facilities instead. Rates of "other" episodes resulting in admission to HHA increased from 13.6 percent to 21.5 percent--a result consistent with recent findings from a University of Colorado study (1987). The post-PPS period was the one-year window from October 1, 1984 through September 30, 1985. Leventhal and D.V. Post Acute HHA Use. Similarly, the other outcome measures evidenced no post-PPS declines in quality of care. As a result, the Medicare hospital population in 1985 was, on average, more severely ill and at greater risk of mortality than in 1984. While we were unable to definitively identify a change in case-mix between the pre- and post-PPS periods, our results on shifts in proportion of patients across the subgroups and the increased hospital risks of mortality within 30 days after admissions would be consistent with this result. A person can be represented by more than one case-mix dimension and have different degrees or grade of membership for each. 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. There was a decline in average LOS for all SNF episodes from 69.9 days to 37.7 days. Overall, the schedules of hospital readmissions in the two time periods were not statistically different. Table 5 also presents the results of statistical tests on the SNF patterns of LOS and discharge destination when adjustments were made for case-mix. Expert Answer 100% (3 ratings) The working of prospective payment plans is through fixed payment rate for specific treatments. Walden University allows prospective grad students to apply for free to any program Grand Canyon University. This result is analogous to our comparison of the 1982-83 and 1984-85 windows. Table 15 presents the mortality patterns of hospital episodes stratified by use of Medicare SNF, Medicare home health and no post-acute Medicare services. However, they might have been using non-Medicare nursing home services, or other Medicare services such as outpatient care, although, at the time of the selection of the 1982 and 1984 samples, persons in nursing homes were identified as a special subsample. HHA Use. The prospective payment system definition refers to a type of reimbursement model used by healthcare providers to create predictability in payments. Our analysis also suggested a reduction in admissions to hospitals after the implementation of PPS. In the following sections, we first discuss the background for this study. Conclusions in this report are solely those of the authors, and do not necessarily reflect the view of the Urban Institute, Duke University, or the Department of Health and Human Services. See Related Links below for information about each specific PPS. With technology playing such an . Virtually no differences were found for the hospital episodes that entailed neither SNF nor HHA care following hospitalization. 1982: 12.1%1984: 12.5%Expected number of days before death. The DALTCP Project Officer was Floyd Brown. Table 12 presents the schedule of probabilities of hospital readmission for pre- and post-PPS periods, and the difference in probabilities between the two periods. However, more Medicare patients were discharged from hospitals in unstable condition after PPS was implemented. from something you have read about. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. Section D discusses hospital readmission patterns by examining rates of readmission at specific intervals after hospital admission. There was no change in discharges due to death which was 9.1 percent in both pre- and post-PPS periods, although patients who died in the hospital had shorter stays in the post-PPS period. We refer to these subgroups as case-mix groups because they represent different types of patients who would likely experience different Medicare service use patterns and outcomes. Using the GOM procedure, a prespecified number (say K) of dimensions can be identified from the available information. However, Medicare patients were more likely to be discharged in unstable condition, which was associated with a higher rate of mortality, even though overall mortality fell. Secure .gov websites use HTTPSA In both the service use and the outcome analyses, we conducted analyses where we stratified the NLTCS samples by relatively homogeneous subgroups of the disabled population. The data sources for this study were the 1982 and 1984 National Long-Term Care Surveys (NLTCS) of disabled elderly Medicare beneficiaries, and their Medicare Part A bills and Medicare records on mortality. 1982: 39.3%1984: 38.4%Expected number of days before readmission. This helps create budget certainty for both providers and the government while incentivizing quality care instead of quantity. ** One year period from October 1 through September 30. The authors pointed out that despite shorter stays and less rehabilitation, their results did not unequivocally demonstrate that patients were less ambulatory at hospital discharge, and that differences in the severity of comorbidity, for example, might have explained the differential referral rate to nursing homes in the two periods. In this way they are distinct from DRGs, for example, which differentiate the acute care requirements of persons being admitted to hospitals. Population Subgroups as Case-Mix. The program pays hospitals a prospectively determined amount for each Medicare patient treated depending on the patient's diagnosis. The results have been surprising" says industry expert Dr. Tom Davis, who strongly believes prospective review will be the industry standard. discharging hospital. For example, we structured the analysis to determine if changes in hospital length of stay after PPS were related to changes in the proportion of hospital discharges followed by use of SNF and HHA care. This increase in HHA use was significant even after adjustments were made for the chronic health and functional status differences between the four GOM defined subpopulations. There were indications of service substitution between hospital care and SNF and HHA care. This file will also map Zip Codes to their State. A study conducted jointly by RAND and the University of California, Los Angeles, examined the question of how the PPS reform affected the quality of hospital care for Medicare patients. For example, there might have been substitution between hospital and SNF care for the mildly disabled, but for the heart and lung disease patients, no differences in hospital length of stay was observed. By establishing predetermined rates for medical services, they create a predictable flow of payments between providers and insurers. Additionally, it helps level the playing field by ensuring all patients receive similar quality care regardless of their ability to pay or provider choice. 1987. Hospital readmission rates were expected to increase after PPS in light of the incentives of PPS for hospitals to discharge patients as quickly as possible. We can describe the GOM model with a single equation. A significant change (p = .05) was found in the subset of hospital stays that resulted in an admission for Medicare SNF care. They posited that the observed change in location of death could reflect both a less aggressive use of hospital resources by physicians caring for terminally ill patients and a transfer of seriously ill patients to nursing homes for terminal care. The proportion of deaths occurring in the first 30 days in the hospital increased from 75 percent in 1982-83 to 88 percent in 1984-85--a 17 percent change between the two periods. ** These are episodes when no Medicare hospital, skilled nursing facility or home health services are used. OPPS and IPPS are executed for the similar provider i.e. The NLTCS allowed a broad characterization of cases including multiple chronic complications or co-morbidities and physical and cognitive impairments. The characteristics of individuals entering hospitals differed between the pre- and post-PPS periods. Of particular importance would be improved information on how Medicare beneficiaries might be experiencing different locations of services (e.g., increased outpatient care) and how such changes affect overall costs per episode of illness. Additional payment (outlier) made only if length of stay far exceeds the norm, Patient Assessment Instrument (PAI) determines assignment of patient to one of 95 Case-Mix Groups (CMGs). By providing a more predictable payment structure for hospitals, prospective payment systems have created an environment where providers can focus on delivering quality care rather than worrying about reimbursement rates. Except for acute care hospital settings, Medicare inpatient PPS systems are in their infancy and will be experiencing gradual revisions. 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. We found no overall changes in the risks of hospital readmission and eventual mortality among Medicare hospital patients. One of these studies (Sager, et al., 1987) examined the impact of PPS on Medicaid nursing home patients in Wisconsin. First, the expected use of post-acute HHA was expected in light of PPS incentives to discharge patients to lower levels of care. Different from PPS effects on SNF use, the study found an increase in hospital episodes resulting in the use of HHA services (12.6% to 15.6%). The system tries to make these payments as accurate as possible, since they are designed to be fixed. Table 3 shows a shift in the proportion of cases by service episodes of each of the four types between 1982 and 1984. ( In addition to employing the GOM subgroups to adjust for overall utilization changes before and after PPS, we examined differences in the effects of PPS on the specific subgroups among the disabled elderly population. DRG payment is per stay. Mortality. Federal government websites often end in .gov or .mil. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions. Additionally, it creates more efficient use of resources since providers are focused on quality rather than quantity. cerebrovascular accident (CVA), or stroke. For these cases, non-Medicare nursing home and other post-acute services might have been received, although we are not able to make that distinction. Hospital Utilization. The Prospective Payment System In response to payment growth, Congress adopted a prospective payment system to curtail the amount of resources the Federal Government spent on medical care for the elderly and disabled. The payment amount is based on a unique assessment classification of each patient. RAND research briefs present policy-oriented summaries of individual published, peer-reviewed documents or of a body of published work. Our case-mix groups are based on chronic health and functional characteristics and are independent of their state at admission to Medicare services. RAND is nonprofit, nonpartisan, and committed to the public interest. The CPHA researchers concluded that, while the results of the study provided initial insights, further analysis on the effects of PPS was required because of identifiable limitations of the study (DesHarnais, et al., 1987). This report describes a study to measure changes in the pattern of Medicare service use resulting from the implementation of the prospective payment system (PPS) for Medicare hospital reimbursement. Before sharing sensitive information, make sure youre on a federal government site. Table 8 presents the patterns of Medicare Part A service use by the "Mildly Disabled" group, which was characterized by relatively minor chronic problems such as arthritis and by 67 percent of the group specifying that their health status was good to excellent. As the entire Medicare program moves towards a risk assumption model and the financial performance of providers is increasingly put at risk, many organizations are re-engineering their data-integrity programs. The implementation of a prospective, fixed rate payment system for hospitals under Medicare created both a perception that hospital efficiency could be improved and concern that incentives for efficiency could result in adverse consequences for Medicare beneficiaries. For example, we found reductions in hospital length of stay after PPS and increased use of HHA services. * These are episodes when no Medicare hospital, skilled nursing facility or home health services are used. We examined the changes among vulnerable subgroups to determine which segments of the total population were most affected by PPS. The contractor is directly responsible for complying with federal and State occupational safety and health (OSH) standards for its employees. These groups represent distinct subsets of medical and functional states of Medicare beneficiaries reflecting the multiple comorbidities of elderly persons which may be expected to be associated with service use patterns and possible negative outcomes of care such as hospital readmission and mortality. We employed cause elimination life table methodology to measure risks of readmission after specific periods of time after an initiating admission. It is apparent that both rates of hospital discharge to HHA and hospital LOS prior to discharge were different between the two time periods. Despite these challenges, PPS in healthcare can still be an effective tool for creating cost savings and promoting quality care. The unit of observation in this study was an episode of service use rather than a Medicare beneficiary. 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. With the prospective payment system, or PPS, the provider of health care, such as a hospital, receives one fixed payment for a particular type of care over a particular period of time. Gauging the effects of PPS proved to be challenging. Nevertheless, these challenges are outweighed by the numerous benefits that a prospective payment system can provide for healthcare organizations and the patients they serve. This uncertainty has led to third-party payers moving towards prospective payment methodologies. In subsequent sections we will analyze in greater detail, the service use and mortality of one of the groups, the community disabled elderly. Thus, the 1982-83 and 1984-85 service windows here actually represent a type of "worst" case scenario. On the other hand, a random sample of the much more frequent hospital episodes was selected. A different measure of hospital readmission might also yield different results. Methods of indirect standardization were used to derive a 1985 expected overall mortality rate based on 1984 mortality rates per severity level. In a second study, Krakauer (HCFA, 1987) analyzed the effectiveness of care provided to Medicare beneficiaries during hospitalization and thereafter in 1983-85. Because the exact dates of service were available from the Medicare Part A bills, it was possible to define periods of Medicare hospital, SNF and HHA service use as well as periods when such services were not used. It should be recalled that "other" refers to all periods when Medicare Part A services were not received. One important advantage of Prospective Payment is the fact that code-based reimbursement creates incentives for more accurate coding and billing. Discharge disposition of any type of service episode was based on status immediately following the specific episode. For initial hospitalizations followed by SNF use, the risks of readmission to a hospital increased from 7.3 percent to 9.2 percent for the 0-30 days interval and from 31 percent to 33.2 percent for the 0-90 day interval. "A New Procedure for Analysis of Medical Classification," Methods of Information in Medicine, 21:210-220.
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