Reimbursement policies increase noninvasive cardiac testing in hospitals, costs
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Medicare reimbursement policies that provide higher payments to hospitals than provider-based office settings for noninvasive cardiac tests lead to increases in testing and extra costs, according to a study published in JAMA Internal Medicine.
“Noninvasive cardiac tests, which include echocardiography and stress testing with or without imaging, have been identified as a target for reducing Medicare [fee-for-service] costs, as they are frequently performed and relatively expensive,” Frederick A. Masoudi, MD, MSPH, professor of medicine at the University of Colorado Anschutz Medical Campus, and colleagues wrote.
In attempt to lower these costs, CMS reduced Medicare fee-for-service payments made for such tests in provider-based offices but increased payments made for these tests in hospital-based settings in 2005, according to the researchers.
Masoudi and colleagues conducted an observation study using a 5% sample of Medicare fee-for-service claims from 1999 to 2015. Researchers used Medicare Advantage claims from three HMOs between 2005 and 2015 to serve as a control group because reimbursement for these claims was not dependent on testing location.
Annual testing rates in practice-based and hospital-based settings were calculated per 1,000 patient-years in both groups.
The study included a mean 1.72 million patient-years annually in the Medicare fee-for-service group and 142,230 patient-years in the control group.
Between 2005 and 2015, the payment ratio of hospital-based outpatient testing to provider-based office testing rose from 1.05 to 2.32 in the Medicare fee-for-service group. The overall proportion of hospital-based testing increased from 21.1% in 2008 to 43.2% in 2015, correlating with the payment ratio (correlation coefficient with a 1-year lag, 0.767; P < .001).
During the study period, the control group experienced a decrease in hospital-based testing, from 16.6% in 2008 to 15.2% in 2015, and had no significant correlation with payment rates (correlation coefficient, –0.024, P = .95).
Researchers estimated that in 2015, the extra costs resulting from increased testing in hospital-based settings among the Medicare fee-for-service group totaled $661 million, with $161 million attributed to patient out-of-pocket costs.
In an editorial accompanying the study, Jose F. Figueroa, MD, MPH, instructor of medicine at Harvard Medical School and an associate physician at Brigham and Women’s Hospital, and Karen E. Joynt Maddox, MD, MPH, co-director of the Center for Health Economics and Policy at the Institute for Public Health at Washington University, St. Louis, explained that the findings should lead policymakers to address the unintended consequences of location-based reimbursement.
“By enacting site-neutral payments, requiring transparency of health care prices, and continuing to incentivize value-based care models, policymakers can ensure that patients are receiving the right care without needlessly paying more for it,” they wrote. – by Erin Michael
Disclosures: Masoudi reports receiving grants from the National Heart, Lung, and Blood Institute during the conduct of the study. Please see study for all other authors’ relevant financial disclosures.