August 8-10, 2018 Summit

FutureFocus February 7, 2018 Post-Acute Cost By Care Settings For The Dual Eligible: Eight Things To Know

Lisa Remington

In this week’s FutureFocus, we explore post-acute costs by care settings for the dual eligible. Important data helps to understand why costs are higher within the entire post-acute discharge period and in particular areas of post-acute. This important data ties back to Medicare Spending per Beneficiary. In another article, we discuss medication non-adherence solutions for Medicare patients. Our Washington Report addresses how CMS is launching a low volume appeals initiative.

Lisa Remington, President, Remington Health Strategy Group

A study in Health Affairs found that after adjustment for comorbidities, dually enrolled beneficiaries had 4.3 percent higher spending, which was primarily driven by higher costs in the post-acute setting associated with use of institutional post-acute care.

Of the 3.6 million hospital episodes in 2013 eligible for inclusion in the Medicare Spending per Beneficiary measure, 32.5 percent were for dually enrolled beneficiaries. (Exhibit 1)

Exhibit 1 Episode characteristics, 2013

Episode characteristic

All patients

Dually enrolled

Not dually enrolled

Episodes (number)

3,582,596

1,162,677

2,419,919

Share of episodes

100.0%

32.5%

67.5%

Mean age (years)

72.7

65.9

75.9

Male

43.5%

38.9%

45.8%

Originally entitled to Medicare due to disability

29.9%

55.2%

17.9%

Episode Utilization and MSPB: Dual Eligible

  1. Dually enrolled beneficiaries were more likely to use care in the three days before admission (92.9 percent versus 87.0 percent) (Exhibit 1) and slightly less likely to use post-discharge care (96.5 percent versus 96.8 percent).
  2. Within the post-acute sub-settings, dual enrollees were more likely to use institutional care (22.6 percent versus 18.1 percent for inpatient care, and 24.9 percent versus 21.9 percent for skilled nursing facility care) but less likely to use home health care (21.4 percent versus 27.8 percent).

"The study found that Medicare beneficiaries who were also enrolled in Medicaid had higher-than-expected episode spending under the Medicare Spending per Beneficiary measure than beneficiaries enrolled in Medicare only. These patterns were consistent across conditions, and spending was driven by greater use of institutional post-acute care as well as higher spending on such care."

Medicare Spending Per Beneficiary

For the average episode, dual enrollees had higher actual (unadjusted) overall spending than non–dual enrollees ($19,842 versus $19,483). Conditional on the use of each setting, there were significant differences in the magnitude of spending. (Exhibit 2).

  1. Dual enrollees had slightly higher spending in the three days before the index admission ($754 versus $691),
  2. Lower spending for the index admission ($9,857 versus $10,954), and
  3. Higher spending in the post-discharge period ($9,617 versus $8,189). Within the post-acute sub-settings, differences were greatest for skilled nursing facilities ($14,024 versus $12,980). Analyses in which all patients were included in spending calculations, regardless of setting use, showed largely similar patterns: The majority of the differential spending was related to skilled nursing facility use.

Exhibit 2: Hospital episode utilization and Medicare Spending per Beneficiary (MSPB), by setting type and dual-enrollment status, 2013

 
 

Patients who use the setting (%)

Average actual standardized spending among episodes that use the setting ($)

 

Dually enrolled

Not dually enrolled

Difference

Dually enrolled

Not dually enrolled

Difference

 

Episode overall

100.0

100.0

0.0

19,842

19,483

359

 

3 days before index admission

92.9

87.0

5.9

754

691

64

 

Index admission

100.0

100.0

0.0

9,857

10,954

−1,097

 

Post-discharge total

96.5

96.8

−0.3

9,617

8,189

1,428

 

Post-acute sub-setting

 

Inpatient (a)

22.6

18.1

4.5

13,122

13,490

−369

 

Skilled nursing facility

24.9

21.9

3.0

14,024

12,980

1,044

 

Home health

21.4

27.8

−6.4

2,807

2,911

−104

 

Outpatient

57.9

53.7

4.2

1,389

1,126

262

 

Hospice services

2.3

2.1

0.1

5,433

5,327

107

 

Durable medical equipment

29.3

25.2

4.1

410

384

26

 

Physician billing

92.5

93.4

−0.9

1,279

1,099

181

 

SOURCE Authors’ analysis of Medicare claims data for 2013.

NOTES Post-discharge is the period thirty days after discharge. All comparisons were significant (). Results were similar after safety-net status was controlled for (data not shown).

(a) Includes inpatient rehabilitation facilities, long-term acute care hospitals, and hospital readmissions.

Additional Facts To Know

  • Dually enrolled beneficiaries’ higher-than-expected spending was entirely within the post-discharge period and was related to higher rates of use of and spending on institutional post-acute care.
  • Frailty or functional disability, which is more common among dually enrolled beneficiaries,could explain the choice of institutional post-acute care or the higher intensity of services. Medicare payments for skilled nursing facilities are based on clinical assessment data, including functional status; these facilities may therefore be receiving higher payments for dual enrollees because of their greater care needs.
  • Social factors—such as having a family member at home, social support in the community, or a safe living environment—may influence the likelihood of requiring institutional post-acute care. Hospital discharge planners consider both medical and social factors in determining whether a patient can be safely discharged home. Since dually enrolled patients more often lack social support networks, it is possible that risk adjustment fails to accurately predict post-acute care spending because such spending is based on social needs in addition to medical needs.