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PubMed1987

The early effects of the prospective payment system on inpatient utilization and the quality of care.

Concern is often expressed that hospitals may be making cost/quality trade-offs under Medicare's prospective payment system. To evaluate the early effects of PPS on inpatient utilization and quality of care, we studied a cohort of 729 U.S. short-term general hospitals from nonwaivered states. We used a linear forecasting model to project 1984 figures based on trends from 1980 to 1983. We found no evidence that the quality of care deteriorated in 1984 for Medicare patients. Consultation rates remained constant, and in-hospital deaths and readmission rates were consistent with previous trends for the Medicare population. Overall, it appears that PPS has reduced hospital utilization without producing deterioration in the quality of care.

Coronary Care Units↗
PubMed1993

The development of outpatient prospective payment systems and the use of ambulatory patient groups by private insurers.

Private insurers will likely move to APGs rapidly because of the key advantages that APGs provide. Not only is it necessary to have an outpatient classification system to make utilization review, quality assurance, and customer reporting more meaningful, outpatient prospective payment provides a foundation for the controls on outpatient payments that insurers have been seeking. Because of outpatient volume increases and constraints on inpatient payments that have led hospitals to increase outpatient charges more rapidly, most insurers believe that outpatient payment levels are currently beyond their control. Introduction of an outpatient prospective payment system will shift control over outpatient payment increases from providers to insurers, as has been the case for many insurers who have adopted DRG payment for inpatient services. Once APGs are in place, annual increases in payment amounts will be determined through insurer-provider negotiation or through contractual approaches that limit payment increases to changes in a price index.

Ambulatory Care↗
PubMedDate not supplied

Developing a Medicare prospective payment system for inpatient psychiatric care.

Under the Balanced Budget Refinement Act (BBRA) of 1999, the secretary of health and human services was mandated to implement a prospective payment system (PPS) for psychiatric inpatient facilities that were exempt from the Medicare inpatient PPS. This paper reviews the reason for the initial "distinct-part" exemption, describes research that has been conducted to inform the development of a psychiatric inpatient PPS, and examines some of the issues that must be addressed as a PPS is designed. In addition, some changes in the overall inpatient psychiatric hospital sector are discussed.

Aged↗
PubMed1991

Registered nurse staffing in Pennsylvania nursing homes: comparison before and after implementation of Medicare's Prospective Payment System.

This paper examines changes in resident acuity and registered nurse staffing in all nursing homes in Pennsylvania before and after the introduction of the Medicare Prospective Payment System (PPS) in 1983. The analysis is based on 1980, 1982, 1985, and 1987 data from the Long Term Care Facilities Survey conducted by the State Health Data Center, Pennsylvania Department of Health. Although the acuity of nursing home residents has increased significantly since the introduction of PPS, full-time registered nurse staffing has remained unchanged, and part-time registered nurse staffing has declined. This alarming trend threatens the quality of care patients receive, yet remains largely unaddressed.

Aged↗
PubMed1993

Use of Medicare services before and after introduction of the prospective payment system.

OBJECTIVE: The case mix-adjusted pattern of use of health care services, especially posthospital care, is compared before and after the introduction of Medicare's Prospective Payment System (PPS). DATA SOURCES: The 1982 and 1984 National Long Term Care Surveys (NLTCS) linked to Medicare administrative records 1982-1986 provide health and health service use data for 12-month periods before and after the introduction of PPS. STUDY DESIGN: Case-mix differences between pre- and post-periods are controlled by using the Grade of Membership model to identify health groups from the NLTCS data. Differences in timing (e.g., hospital length of stay) were controlled using life table models estimated for each health group, that is, service use patterns pre- and post-PPS are compared within groups. PRINCIPAL FINDINGS: Hospital LOS and admission rates declined post-PPS. Changes in the timing and location of death occurred but, overall, mortality did not increase. Changes in post-acute care service use by elderly, chronically disabled Medicare beneficiaries were observed: home health service use increased overall and among the unmarried disabled population. CONCLUSIONS: PPS did not adversely affect quality of care as reflected in mortality or in hospital readmissions. Moreover, the differential use of post-acute care, and changes in hospital LOS by health group, indicate that the system responded, specific to marital status and age, to the severity of needs of chronically disabled persons.

Age Factors↗
PubMed1994

Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 1994 rates--HCFA. Final rule.

On September 1, 1993, we published a final rule with comment period that implemented certain changes in the hospital inpatient prospective payment systems resulting from the enactment of the Omnibus Budget Reconciliation Act of 1993 on August 10, 1993. This final rule responds to public comments on that publication.

Centers for Medicare and Medicaid Services, U.S.↗
PubMed1998

Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 1999 rates; corrections--HCFA. Proposed rule; correction.

In the May 8, 1998 issue of the Federal Register (63 FR 25575), we published a proposed rule to revise the Medicare hospital inpatient prospective payment systems for operating costs and capital-related costs to implement necessary changes arising from our continuing experience with the system. This document corrects technical errors made in that document.

Capital Expenditures↗
PubMed1990

Mortality following hip fracture before and after implementation of the prospective payment system.

Recent studies of patients with hip fractures from two hospitals have suggested that the marked reduction in length of stay that occurred following implementation of the Medicare prospective payment system (PPS) resulted in decreased quality of care for these patients. To assess whether this change influenced mortality, we studied patients with hip fractures aged 65 years or older from a 20% sample of Michigan Medicare enrollees. There were 2130 such patients in the 2 years preceding (October 1981 through September 1983) and 2238 in the 2 years following (October 1984 through September 1986) implementation of PPS. Although the demographic characteristics of patients with hip fractures did not change after PPS, the mean length of stay (95% confidence interval) decreased by 4.4 (4.1 to 4.7) days. However, mortality in the year following the fracture did not change: 23.2% before PPS, 23.7% after PPS; rate difference of 0.5% (-2.0 to 3.0). This finding was consistently present within subgroups defined by patient demographic characteristics. Furthermore, when the analysis was restricted to patients treated in those hospitals with the greatest reduction in average length of stay following PPS (7.5 days, or 35%), there was no significant change in 1-year mortality. For those patients who were enrolled in Medicaid and not in a nursing home at the time of the fracture, there was no increase in the rate of nursing home residence 1 year after the fracture. Thus, the findings of this population-based study suggest that the key outcomes of postfracture mortality and nursing home residence were not affected by the implementation of PPS.

Aged↗
PubMed1994

The hospital response to Medicare's Prospective Payment System: an econometric model of Blue Cross and Blue Shield plans.

This paper presents an empirical analysis of the impact that resulted from phase-in of Medicare's Prospective Payment System (PPS) on hospital utilization and payments for the Blue Cross and Blue Shield (BCBS) plans. A pooled cross-sectional time series econometric model was specified and estimated using quarterly hospital utilization and payments of the BCBS plans over the period 1980 to 1987. The results indicate that the implementation of PPS was significantly associated with a lower rate of hospital admissions, days and deflated inpatient payments for the BCBS plan members under age 65. A 1% increase in the proportion of hospital days reimbursed under PPS resulted in a .032% decrease in BCBS plan admissions per 1,000 members, a 0.017% decline in days per 1,000 members and a 0.016% decline in deflated inpatient payment per 1,000 members. The reductions in hospital utilization resulted in lower payments by BCBS plans to participating hospitals suggesting a positive spill-over effect of PPS for private insurers. This research underscores the importance of interaction between federal health policy and the private health insurance market.

Blue Cross Blue Shield Insurance Plans↗
PubMed1992

Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 1993 rates; correction--HCFA. Final rule; correction.

In the September 1, 1992, issue of the Federal Register (FR Doc 92-20647) (57 FR 39746), we revised the Medicare inpatient hospital prospective payment systems for operating costs and capital-related costs. Additionally, in the addendum to that final rule, we described changes in the amounts and factors necessary to determine prospective payment rates for Medicare hospital inpatient services for operating costs and capital-related costs. These changes are applicable to discharges occurring on or after October 1, 1992. This notice corrects errors made in that document.

Capital Expenditures↗
PubMed1990

Studying the effects of the DRG-based prospective payment system on quality of care. Design, sampling, and fieldwork.

We have conducted a nationally representative before-after study of the effects of the diagnosis related groups-based prospective payment system (PPS) on quality of in-hospital care for aged Medicare patients. We used a pre-post design with multiple time points in both the pre-PPS (calendar years 1981 and 1982) and post-PPS (July 1985 through June 1986) periods. We gathered clinically detailed data from medical records of patients with one of six diseases and supplemented these data with postdischarge information from Health Care Financing Administration files. We used a stratified multistage cluster sampling design with data gathered on 16,758 patients chosen from 297 hospitals in 30 areas in five states. Our hospital participation rate was 97%; we successfully accessed 96% of the medical records we requested; and our mean item-level reliability score was 0.80. Our sample matches the nation closely on hospital urbanicity, size, teaching status, ownership, and percentages of Medicare and Medicaid patients, and patient demographics and mortality.

Cross-Sectional Studies↗
PubMed1987

Bringing psychiatric patients into the Medicare prospective payment system: alternatives to DRGs.

The basis of Medicare's prospective payment for alcohol, drug abuse, and mental illness hospital admissions has been the patient classification system known as diagnosis-related groups (DRGs). This paper describes two alternative patient classification systems, disease staging and clinically related groups, and reports how well each system predicts resource use compared to the DRG system. Medicare data from four states were used to test the comparative strength of these patient classification systems. Although disease staging and clinically related groups performed better than DRGs, they were still poor predictors of resource use.

Alcoholism↗
PubMed1994

Quality of antidepressant medications prescribed at discharge to depressed elderly patients in general medical hospitals before and after prospective payment system.

This study describes the quality of antidepressant medication use at hospital discharge for depressed elderly inpatients and compares quality of care before and after implementation of Medicare's Prospective Payment System (PPS). The study reviewed data from medical records of 2746 depressed, elderly, hospitalized patients in acute-care general medical hospitals in five U.S. states (pre-PPS period 1981-82; post-PPS period 1985-86). The majority were discharged on antidepressant medication both pre-PPS and post-PPS. After PPS' implementation, sedating medications were used less often in all treatment settings. In general medical wards, a higher percentage post-PPS (24%) than pre-PPS (14%) were discharged 48 hours or less after first starting an antidepressant medication. In both time periods, one-third of patients receiving antidepressant medications were prescribed daily dosages at discharge below recommended, minimum, therapeutic levels, whether treated in general medical wards or psychiatric units. Otherwise, patients previously treated in psychiatric units received higher quality of medication management than those treated in general medical wards. Over time, patients discharged on antidepressant medication were less likely to use sedating medication, suggesting improved quality of care. In general medical wards, however, patients were discharged more rapidly after starting medication, possibly suggesting lower quality of care. A substantial percentage of patients received subtherapeutic dosages of medication or sedating medications, suggesting that improved management of discharge antidepressant medication in the elderly is needed in general medical hospitals.

Adaptation, Psychological↗
PubMed2000

Office of Inspector General; Medicare program; prospective payment system for hospital outpatient services. Health Care Financing Administration (HCFA), HHS, and Office of Inspector General (OIG), HHS. Final rule with comment period.

This final rule with comment period implements a prospective payment system for hospital outpatient services furnished to Medicare beneficiaries, as set forth in section 1833(t) of the Social Security Act. It also establishes requirements for provider departments and provider-based entities, and it implements section 9343(c) of the Omnibus Budget Reconciliation Act of 1986, which prohibits Medicare payment for nonphysician services furnished to a hospital outpatient by a provider or supplier other than a hospital, unless the services are furnished under an arrangement with the hospital. In addition, this rule establishes in regulations the extension of reductions in payment for costs of hospital outpatient services required by section 4522 of the Balanced Budget Act of 1997, as amended by section 201(k) of the Balanced Budget Refinement Act of 1999.

Ambulatory Care↗
PubMed2000

The impact of the prospective payment system on the technical efficiency of hospitals.

In a longitudinal panel study design, 80 hospitals in Virginia were selected for analysis to test the hypothesis that the introduction of the prospective payment system (PPS) in October 1983 had helped hospitals enhance their operational performance in technical efficiency. A non-parametric method called Data Envelopment Analysis (DEA) was used to calculate and compare the efficiency scores for each peer group of hospitals (by bed size) between the year 1984 and the year 1993. Contrary to expectations, no significant difference in technical efficiency was found in each hospital peer group over the study period. Nevertheless, the case study demonstrates that if hospital managers use this analytical tool appropriately, they may spot where any organizational weakness lies and how they can improve it.

Ambulatory Care↗