Q Instructions Read the attached document. Prepare a brief detailing the different care setting and recommending whether this should be a concern or not

Q Instructions

Read the attached document.

Prepare a brief detailing the different care setting and recommending whether this should be a concern or not a concern and provide rationale and evidence (from the document) to support your rationale. Should be around 1 1/2 to 2 pages in length. answering today’s health policy questions

Prepared for:
American Hospital Association

April 4, 2019

Comparison of Medicare Fee-for-Service
Beneficiaries Treated in Ambulatory Surgical

Centers and Hospital Outpatient Departments

Berna Demiralp, PhD
Jing Xu, PhD
Elizabeth Hamlett, BS
Samuel Soltoff, BS, BS
Lane Koenig, PhD

Report Overview

• Study Background and Purpose
• Key Findings
• Overview of Study Approach
• Comparison of Patient Characteristics
• Conclusions
• Appendix: Data and Methodology

2

STUDY BACKGROUND AND PURPOSE

Comparison of Medicare Fee-for-Service Beneficiaries
Treated in Ambulatory Surgical Centers and Hospital
Outpatient Departments

3

Study Background and Purpose
• Patients may receive outpatient surgical care in either

Ambulatory Surgical Centers (ASCs) or Hospital Outpatient
Departments (HOPDs).

• Currently, Medicare pays different rates for surgical care
provided in the two settings, with HOPDs receiving higher
reimbursement than ASCs.

• However, patient characteristics may differ across the settings
in terms of demographics, severity and complexity of their
comorbid conditions.

• This study examines how Medicare Fee-for-Service (FFS)
beneficiaries receiving surgical care in HOPDs compare to
those receiving care in ASCs.

4

Research Question

How do Medicare FFS beneficiaries receiving surgical
care in HOPDs compare to beneficiaries treated in
ASCs?

– Demographics and socioeconomic status
– Severity and medical complexity
– Prior healthcare utilization

5

KEY FINDINGS

Comparison of Medicare Fee-for-Service Beneficiaries
Treated in Ambulatory Surgical Centers and Hospital
Outpatient Departments

6

Key Findings
• Compared to Medicare FFS beneficiaries treated in ASCs,

beneficiaries receiving surgical care in HOPDs are more
likely to be:
– Under 65 (eligible for Medicare based on disability, ESRD, or

ALS)1 and 85 or older
– Black or Hispanic
– Dual eligible
– From lower-income areas
– Burdened with more severe chronic conditions
– Previously hospitalized
– Cared for in an emergency department (ED) and have higher

Medicare spending prior to receiving ambulatory care

7

1. Medicare beneficiaries under 65 are individuals with certain disabilities, end-stage renal disease, or amyotrophic lateral
sclerosis (ALS). (https://www.medicare.gov/sites/default/files/2018-11/10050-Medicare-and-You.pdf )

OVERVIEW OF STUDY APPROACH

Comparison of Medicare Fee-for-Service Beneficiaries
Treated in Ambulatory Surgical Centers and Hospital
Outpatient Departments

8

Study Question Characteristics Level of Analysis

How do Medicare FFS
beneficiaries receiving
surgical care in HOPDs
compare to beneficiaries
treated in ASCs?

• Demographics
• Socioeconomic Status
• Clinical Characteristics

• Prior Healthcare
Utilization

• Patient Level

• Claim Level

Study Overview

9

• Data Source: 2016-2017 Medicare Inpatient, Outpatient, and Carrier Standard
Analytical Files, and Denominator files.

• Identifying ASC and HOPD Patients: A patient is considered an HOPD (ASC) patient
in a given year if more than 50% of ambulatory surgical care in that year is
provided in HOPDs (ASCs).

HOW DO MEDICARE FFS BENEFICIARIES
CARED FOR IN ASCS AND HOPDS DIFFER?

Comparison of Medicare Fee-for-Service Beneficiaries
Treated in Ambulatory Surgical Centers and Hospital
Outpatient Departments

10

11

Relative to Medicare FFS
beneficiaries treated in ASCs,

beneficiaries treated in HOPDs
are…

1.8x More Likely to be Under 65 Years1 and
1.4x More Likely to be 85 Years or Older

12

Beneficiary Age Composition

Source: KNG Health Consulting, LLC analysis of 2016 -2017 Medicare claims data.

1. Medicare beneficiaries under 65 are individuals with certain disabilities, end-stage renal disease, or amyotrophic
lateral sclerosis (ALS). (https://www.medicare.gov/sites/default/files/2018-11/10050-Medicare-and-You.pdf )

17.7%

47.4%

26.7%

8.2%9.7%

56.0%

28.4%

6.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Under 65 years 65 – 74 years 75 – 84 years 85 years or older

HOPD ASC

1.7x More Likely to be Dual Eligible

13

Percentage of Beneficiaries That Are on Medicare and Medicaid

Source: KNG Health Consulting, LLC analysis of 2016 -2017 Medicare claims data.

18.2%

10.9%

0.0%

5.0%

10.0%

15.0%

20.0%

HOPD ASC

Race/Ethnicity and Income

14

• Compared to the average Medicare FFS beneficiary treated in
an ASC, the average beneficiary treated in an HOPD is

– 1.3 times more likely to be Black or Hispanic

– From a county with $1,900 lower median household
income.

Source: KNG Health Consulting, LLC analysis of 2016 -2017 Medicare claims data.

Severity and Complexity Measures

15

• We measured patient severity and medical complexity using three types of
indicators: Charlson Comorbidity Index, number of complications or
comorbidities (CCs) and major CCs (MCCs), and prior utilization of care.

• The Charlson Comorbidity Index is a measure of patient severity computed
by assigning higher weights to more severe conditions in terms of their
effect on mortality.
– The Charlson Comorbidity Index includes 17 medical conditions that are found to be

associated with 1-year mortality. A weight of 1 to 6 is assigned to each condition based
on mortality risk, and weights are added across conditions to calculate total score.1, 2

– The score is predictive of mortality, with 1-year and 10-year mortality rates greater than
50% for those with scores above 2. 1, 3

• Prior utilization of care captures short-term acute care hospital stays and
emergency department visits in the 90 days preceding an ASC or HOPD
visit.

1Charlson, M. E., Pompei, P., Ales, K. L., & MacKenzie, C. R. (1987). A new method of classifying prognostic comorbidity in longitudinal studies:
development and validation. Journal of Chronic Diseases, 40(5), 373-383.
2Quan, H., Sundararajan, V., Halfon, P. et al. (2005). Coding algorithms for defining comorbidities in ICD-9-CM and ICD-10 administrative data. Med
Care. 2005 Nov; 43(11):1130-9.
3Hall, W. H., Ramachandran, R., Narayan, S., Jani, A. B., & Vijayakumar, S. (2004). An electronic application for rapidly calculating Charlson
comorbidity score. BMC Cancer, 4(1), 94.

Medicare Patients Treated in HOPDs Are Sicker

Medical conditions captured in Charlson Comorbidity Index: myocardial infarction, congestive heart failure, peripheral vascular
disorders, cerebrovascular disease, dementia, chronic pulmonary disease, rheumatic disease, peptic ulcer disease, mild liver disease,
diabetes without chronic complication, diabetes with chronic complication, hemiplegia or paraplegia, renal disease, any malignancy
(including lymphoma and leukemia, except malignant neoplasm of skin), moderate or severe liver disease, metastatic solid tumor,
AIDS/HIV.

16

Indicator ASC HOPD

Average Charlson Comorbidity Index 2.16 3.12

% with at least one CC 52.8% 66.6%

% with at least one MCC 13.0% 23.0%

Source: KNG Health Consulting, LLC analysis of 2016 -2017 Medicare claims data.

• The severity of chronic conditions as measured by the Charlson Comorbidity Index
is higher for beneficiaries seen in HOPDs.

• A greater percentage of HOPD patients have CCs and MCCs.

Emergency Department Utilization 90 Days Prior to Visit by Setting

17

Medicare Patients Treated in HOPDs Have Higher
Prior Emergency Department Use

Emergency Department (ED) Use Prior to Visit ASC HOPD

Percent of ASC/HOPD Visits with a Prior ED Visit 12.5% 23.3%

Mean Number of ED Visits (Conditional on Having .At
Least 1 ED Visit)

1.37 1.54

Source: KNG Health Consulting, LLC analysis of 2016 -2017 Medicare claims data.

Short-term Acute Care Hospital Utilization 90 Days
Prior to Visit by Setting

18

Medicare Patients Treated in HOPDs Have
Higher Prior Acute Care Hospital Use

Short-term Acute Care Hospital (STCH) Use Prior to Visit ASC HOPD

Percent of ASC/HOPD Visits with a Prior STCH Stay 3.9% 11.5%

Mean Number of STCH Stays (Conditional on Having At Least .1
STCH Stay)

1.15 1.28

Total STCH Days (Conditional on Having At Least 1 STCH Stay) 4.10 6.27

Total STCH payments* (Conditional on Having At Least 1 STCH Stay) $11,975 $16,844

* 2017 USD

Source: KNG Health Consulting, LLC analysis of 2016 -2017 Medicare claims data.

CONCLUSIONS

Comparison of Medicare Fee-for-Service Beneficiaries
Treated in Ambulatory Surgical Centers and Hospital
Outpatient Departments

19

Conclusions

20

• Our findings suggest key differences between Medicare FFS
beneficiaries treated in ASCs and HOPDs.

• Medicare FFS beneficiaries primarily treated in HOPDs as
compared to ASCs are more likely to
– be under 65 (eligible for Medicare based on disability, ESRD, or ALS)1,

85 or older, Black or Hispanic, and dual eligible.
– come from communities with lower incomes.
– have more severe chronic conditions and higher prior utilization of

hospitals and emergency departments.

• Due to their higher medical complexity, HOPD patients may
require a greater level of care than ASC patients.

1. Medicare beneficiaries under 65 are individuals with certain disabilities, end-stage renal disease, or amyotrophic lateral
sclerosis (ALS). (https://www.medicare.gov/people-like-me/disability/getting-medicare-disability.html#collapse-5776)

APPENDIX: DATA AND METHODOLOGY

Comparison of Medicare Fee-for-Service Beneficiaries
Treated in Ambulatory Surgical Centers and Hospital
Outpatient Departments

21

Data and Study Population

• 2016-2017 Standard Analytical File of 5% sample of Medicare
FFS beneficiaries. Claims include:
– Inpatient
– Outpatient
– Professional services (Carrier file)

• The patient population consists of Medicare FFS beneficiaries
who fulfill the following criteria:
– Had at least one HOPD or ASC visit between Jan. 1, 2017 and Dec. 31

2017.
– Had continuous enrollment in Medicare FFS Part A and Part B during

study period.

22

Identification of HOPD and ASC Patients
• HOPD visits are identified as the visits (claims) in the Outpatient File that

satisfy the following conditions:
– Facility type code = 1 (hospital)
– Not an observation stay claim or an ED claim
– Had at least one of the Medicare-Approved ASC Surgical Procedure HCPCS

codes that were common in both ASC and HOPD during study period

• ASC visits are identified as the visits (claims) in the Carrier File that satisfy
the conditions below:
– Provider specialty code=49 (ambulatory surgery center)
– Type of service code=F (ambulatory surgery center)
– Place of service code=24 (ambulatory surgery center)
– Had at least one of the Medicare-Approved ASC Surgical Procedure HCPCS

codes that were common in both ASC and HOPD during study period

23

Identification of HOPD and ASC Patients

• Identification of HOPD and ASC patient populations:
– A patient is considered an HOPD (ASC) patient in a given year if more

than 50% of the ambulatory surgical care in that year is provided in
HOPDs (ASCs).

– Only HOPD claims for HOPD patients and ASC claims for ASC patients
are included in the analysis.

24

Methodology: Descriptive Analysis
• Demographic, socioeconomic, and clinical characteristics are examined at

the beneficiary level.

• Demographic characteristics: Obtained from the Medicare Denominator
File.

• Socioeconomic characteristics of beneficiary’s county of residence: U.S.
Census estimates of county-level characteristics based on 2013-2017
American Community Survey are used.

• Clinical characteristics: Charlson comorbidity index and number of CCs
and MCCs are measured using diagnostic information from all outpatient
and carrier claims that a patient had in 2017.

25

Methodology: Descriptive Analysis
• Prior utilization is examined at the visit level.

• Prior utilization within 90 days prior to HOPD or ASC visit
– Emergency Department utilization (Emergency Department use is identified

by revenue center codes 0450-0459, and 0981 in outpatient and inpatient
claims files.)

– Short-term acute care hospital utilization

• T-tests are conducted to assess differences in average patient
characteristics between HOPDs and ASCs.

• All differences between HOPDs and ASCs presented in this report are
statistically significant at the 0.1% level.

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