Patient Cognitive Status and Health Spending

By November 2, 2018 Commentary

The use of value-based reimbursement, with its emphasis on supposed quality measures, has heightened providers’ awareness of factors outside their control that might affect their scores and reimbursement.  A study in JAMA Internal Medicine examines whether the total annual cost of care measure used in part for Medicare reimbursement of physicians fails to take into account certain cognitive and other issues that may impact reimbursement.   (JAMA Int. Med. Study)   Medicare is rolling out the “MIPS” payment methodology for 2019 and it includes a cost measure.  The researchers modeled the potential effect of the MIPS measure on reimbursement.  While there is a general risk adjustment for the cost measure, it is not adjusted for patient functional status or some factors like local economic conditions or provider supply characteristics.  The researchers believed these are largely outside a physician’s control, but could meaningful affect the cost measures that are used in part for the reimbursement formula.  They were particularly concerned about lowering payments to already stressed safety-net providers, like community health centers.  Using retrospective data from 2006-2013 they explored whether patient cognitive status in particular was inadequately accounted for in the payment formula.  The overall average total cost of care per year was $9117.  Even after applying the risk adjustment measure, depression and dementia were associated with $2740 and $2922, respectively, more average spending.  Having three or more problems with activities of daily living was associated with $3121 greater average spending.  Safety net clinicians were particularly impacted by the failure of the MIPS methodology to account for these factors, likely because they serve a larger population with these characteristics and conditions.  Using the methodology as is would reduce payments to these clinicians.  This study is the latest in a longer line of research finding that value-based payment schemes often fail to account for important patient and environmental differences which really are not the responsibility of or under the control of a physician or other clinician.  CMS and other payers need to be responsive to this research by improving the payment method, particularly since providers serving the most needy populations and impacted the most.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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