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Member Research & Reports

Member Research & Reports

St. Louis, Kentucky, Emory, Wash U.: Could Medicare Payments Premised on Total Annual Cost of Care Penalize Clinicians Who Care for Most Vulnerable Patients?

Medicare is moving toward value-based payment, wherein the Merit-Based Incentive Payment System (MIPS) program judges outpatient clinicians’ performance on a measure of annual Medicare spending. However, this measure may disadvantage outpatient clinicians who care for vulnerable populations because the algorithm omits meaningful determinants of cost.

A multi-disciplinary, multi-site research team set out to determine whether factors not included in Medicare risk adjustment, including patient neuropsychological and functional status, as well as local area health resources and economic conditions, are associated with Medicare total annual cost of care (TACC), and evaluate whether accounting for these factors is associated with improved TACC performance by outpatient safety-net clinicians. The resulting publication appears in JAMA Internal Medicine, titled “Association Between Patient Cognitive and Functional Status and Medicare Total Annual Cost of Care: Implications for Value-Based Payment.

The collaborative research was conducted by: Dr. Kenton J. Johnston, St. Louis University College for Public Health and Social Justice; Dr. Hefei Wen, University of Kentucky College of Public Health; Dr. Jason M. Hockenberry, Emory University Rollins School of Public Health; and Dr. Karen E. Joynt Maddox, Washington University School of Medicine.

The investigators posed the question: “Are patient cognitive and functional status and local area health care supply and economic conditions associated with outpatient clinicians’ performance on treated Medicare patients’ total annual cost of care (TACC)?”. Their subsequent observational study of data from the Medicare Current Beneficiary Survey and Area Health Resources File found that patient depression, dementia, limitations in activities of daily living, and residence in areas of mental health care shortage or high unemployment were associated with substantially higher TACC, after applying standard Medicare risk adjustment methods. In a model adding these factors to risk adjustment, the TACC performance of safety-net clinicians was improved.

The authors conclude that “[a]ssessing outpatient clinicians for the TACC of treated Medicare patients without considering other patient factors may inappropriately penalize safety-net clinicians who care for vulnerable patients.”