1:30 - 1:50 pmSunday, September 18
LK 120
Unintended consequences of Medicare pay-for-performance
LK 120
Unintended consequences of Medicare pay-for-performance
Stanford University
Background Recent Medicare pay-for-performance policies aim to improve patient care quality. One focus has been reducing the incidence of hospital-acquired conditions (HACs), which are considered largely... Read more

Description

Background 
Recent Medicare pay-for-performance policies aim to improve patient care quality. One focus has been reducing the incidence of hospital-acquired conditions (HACs), which are considered largely preventable. Medicare started the (i) HAC nonpayment policy in 2008 (discontinued payments for HACs), (ii) the HAC Reduction Program in 2014 (instituted financial penalties for hospitals with high HAC rates), and (iii) tied Hospital Compare quality metrics to HAC rates. However, these policies may not have their intended consequences if some hospitals lack the capability to identify HACs or to distinguish between HACs and conditions that are present-on-admission (POA). In fact, the new legislation may unfairly penalize hospitals with better infrastructure for accurately reporting HACs. We examine whether incorrect reporting occurs.

Methods
Some states regulated adverse event reporting systems prior to 2008, and typically included measures to ensure accurate HAC reporting (e.g. through audits and financial penalties). We refer to these states as “strongly-regulated” and term the remaining states “weakly-regulated.” Strongly-regulated states have greater incentives for truthful reporting as they face both federal and state regulation. We find evidence suggesting that these states have higher quality of care (measured by publicly reported quality metrics) and better POA detection capability (measured by compliance with quality metrics that require timely response).
Using a 5% random sample of Medicare claims data from 2009-2010, we examine differences in (risk-adjusted) POA and HAC reporting rates between strongly- and weakly-regulated states. We use regression to measure the effect of additional state-level regulation on reported infection rates. We control for patient-level risk factors and use instrumental variables to account for the possible endogeneity of regulation.

Results
We find that state-level regulation causes decreased (risk-adjusted) POA reporting rates and increased (risk-adjusted) HAC reporting rates. While either result can be due to unobservable patient risk, this cannot simultaneously explain both results, i.e. if patients in weakly-regulated states are more susceptible to infection (despite risk adjustment), they should have higher HAC reporting rates; if they are less susceptible, they should have lower POA reporting rates. Therefore, these results suggest that hospitals in weakly-regulated states either (i) fail to report HACs or (ii) over-report HACs as POAs. We estimate that there are over 10,000 over-reported POA infections a year among weakly-regulated states (20% of their total reported POAs), adding a cost burden of $200 million.

Conclusions
Even with electronic documentation, hospitals may still incorrectly report quality metrics. Understanding how incentives influence reporting quality is crucial for designing effective policies. We suggest targeted HAC auditing and improved federal regulations on reporting systems.

Contact Us

We're not around right now. But you can send us an email and we'll get back to you, asap.

Not readable? Change text. captcha txt

Start typing and press Enter to search