Change spills over

Last week at JAMA Surgery, a great team from Harvard published an article that looked at the spillover of practice changes from Medicare Fee for Service to Medicare Advantage due to a bundled payment program.(**)

It is unknown whether participating hospitals change care patterns only for patients subject to the payment bundle or if changes spillover onto care for other patients undergoing joint replacement. Spillovers to Medicare Advantage (MA) patients would indicate that clinicians have a consistent approach to discharge planning regardless of payor and would suggest Medicare’s payment reforms have had a broader societal effect….

In hospitals affected by the CJR program, the use of institutional post–acute care differentially decreased by 2.1% (95% CI, −3.9% to −0.2%; P = .03) among MA patients and 2.3% (95% CI, −4.0% to −0.7%; P < .01) among traditional Medicare patients

What does this mean?

  • Docs and hospitals respond to incentives if they are sufficiently big and powerful enough
  • Docs and hospitals don’t selectively change practice patterns
  • Creating the counterfactual for estimating savings is hard

The Comprehensive Joint Replacement (CJR) program is a Medicare effort to bundle payments for the entire episode of care for a knee or hip replacement.  The surgical team is giving a big check and from that check, all services associated with a joint replacement have to be paid for. If the surgical team can  keep costs underneath the lump sum, they profit.  If  costs stay above the lump sum, the surgical team eats a loss.  This program does a good job of cutting out expensive outliers and squeezing post-acute care spending.  It has lowered direct, traditional Medicare costs by about 3% compared to the normal fee for service payment method.

This letter asks if practice patterns are different for people covered by traditional Medicare who are now in this CJR bundled payment model and people who are covered by Medicare Advantage who are not in the payment model.

They find that in hospitals that were required to accept CJR bundles, there were fewer post-acute care claims for all people covered by any Medicare payment stream.  Once a hospital is in CJR, practices change for everyone.  This makes sense and it aligns with previous knowledge that once a patient is under treatment, clinical practice is usually fairly consistent across payers unless there is a payer intervention.

However, it makes estimating the actual effect of the program harder as there are now direct savings from the Medicare FFS program and then indirect savings in Medicare Advantage.  I would also hypothesize that these practice changes cascade to privately insured, Exchange insured and Medicaid patients as well but that is not shown in this study.  There has been good evidence that Medicare Advantage has “spill-over” effects once the a certain amount of market share in a county is gained.  I think that this paper adds to the growing evidence that payment reform in traditional Medicare also has dynamic spill-over effects into Medicare Advantage.  This is good news in the quest for value even as it makes the program evaluator’s job a whole lot harder.







** Wilcock AD, Barnett ML, McWilliams JM, Grabowski DC, Mehrotra A. Association Between Medicare’s Mandatory Joint Replacement Bundled Payment Program and Post–Acute Care Use in Medicare Advantage. JAMA Surg. Published online October 02, 2019. doi:10.1001/jamasurg.2019.3957

4 replies
  1. 1
    Wag says:

    Very interesting, but not surprising. I know that in my practice we have our outpatient quality incentives for hypertension control, and the spillover has benefited all or our patients, not just the CPC+ patients.

  2. 2
    Barbara says:

    These spillover effects are also one reason why it’s hard to conclusively understand the impact of MA on the overall Medicare budget. It’s complex, but the reverse effect could be occurring, where changes for MA patients with significant MA penetration due to managed care utilization management can affect how FFS patients are treated, which could bend the cost curve a bit for FFS patients. One thing has been clear for a while, however, and that is MA patients use less post-acute care overall and tend to use the most expensive kind of post-acute care only for the most serious conditions, e.g., stroke and spinal cord injury, whereas, the trend in FFS has seen a significant increase in intensive post-acute care especially for orthopedic patients. MedPAC has been reporting on this for years.

    ETA: Which is to say, the lower incidence of expensive post-acute care might have been primed because hospitals had already adapted to MA utilization controls.

  3. 3
    Yutsano says:

    @Barbara: Do you have any insight as to how much of that is affected by the fact that Social Security Disability Medicare doesn’t qualify for most MA plans? Or are we possibly sending our dearly departed Mr. Mayhew down another possible insurance rabbit hole?

  4. 4
    Barbara says:

    @Yutsano: Post-acute care would mean right after discharge from a facility for a diagnosis or event, and thus, in almost all cases, would precede a person’s eligibility under the Medicare program due to total disability. If a person has a stroke and gets SSDI, they won’t start receiving Medicare for another two years (probably less because date of disability will be backdated a bit, but still quite a bit after their acute hospital stay).


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