Dual Eligible Beneficiaries And Potentially Avoidable Hospitalizations 9815 PAHInsight Brief
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Policy Insight Brief September 2011 Dual Eligible Beneficiaries and Potentially Avoidable Hospitalizations Misha Segal SUMMARY: About 25% of the hospitalizations for dual eligible beneficiaries in 2005 were potentially avoidable. Medicare and Medicaid spending for those potentially avoidable hospitalizations (PAHs) was almost $6 billion, or about 20% of tot al spending on inpatient care for the dual eligibles. We estimate that those costs increased to $7–$8 billion in 2011. The frequency of PAHs varied significantly by setting; they were much more likely to happen to dual eligibles in skilled nursing facilities. At the state level, the frequency of PAHs among dual eligibles varied by a factor of four from the lowest st ate (Alaska) to the highest (Louisiana). Nationally, five conditions were responsible for more than 80% of P AHs. Congestive heart failure was the most common reason overall, while pneumonia was the leading reason in SNFs. The Centers for Medicare and Medicaid Services (CMS) is committed to achieving significant reductions in PAHs as part of its efforts to improve the quality of health care services while reducing per-capita health care costs. This report demonstrates that reducing the number of PAHs among dual eligible beneficiaries would likely lead to both a meaningful decrease in health care spending and improvement in the quality of care for a vulnerable and frail population. We estimate that $7 billion to $8 billion of Medicare spending on hospital services were from PAHs in 2011. “ “ D ual eligible beneficiaries are those that qualify for both Medicare and Medicaid benefits and represent approximately 20% of Medicare fee-forservice beneficiaries. Dually eligible beneficiaries tend to be seniors and non-elderly people with disabilities, and are generally poorer and have worse health status than other Medicare beneficiaries. Dual eligible beneficiaries also tend to use more health care services, and account for a disproportionate share of Medicare spending.1, 2 A major driver for higher spending among dual eligible beneficiaries is their higher use of services, p articularly inpatient hospitalizations. For example, dual eligible beneficiaries are 1.6 times more likely to be hospitalized than non dual eligible beneficiaries and the average Medicare spending for hospitalizations among dual eligibles is higher than other Medicare beneficiaries.1, 3 Hospitalizations often can be avoided with access to good primary and outpatient care, and quality care within a facility. Hospitalizations that could have been avoided, either because the condition could have been prevented or treated outside a hospital setting, are termed "potentially avoidable hospitalizations" or PAHs and reducing PAHs presents an opportunity to improve both the quality of care and reduce overall Medicare expenditures. This Policy Insight Brief focuses on the prevalence and cost of PAHs across health care settings, variations in PAH rates by state, and health conditions associated with PAHs. Center for Strategic Planning 2 Inpatient Hospitalizations and PAH for Dual Eligible Population In 2005, there were almost 2.7 million hospitalizations among dual eligible beneficiaries, of which 26% may have been avoidable. “ “ In 2005, among 5.6 million dual eligible beneficiaries, 27% had at least one hospitalization; with an average hospitalization cost of $10,226 of which 96% (or $9,815) was borne by the Medicare program, the primary payer for inpatient hospital services. Among the almost 2.7 million hospitalizations for dual eligible beneficiaries, almost 700,000 (or 26%) may have been avoidable. The overall costs for these PAHs were $5.6 billion, with the Medicare pro gram bearing 96% of these costs. To put the expenditure figure of $5.6 billion for PAHs into perspective, it is helpful to view in terms of overall Medicare spending on hospital services. In 2005, Medicare spent $180 billion on hospital services and hospitalizations that were potentially avoidable constituted 3% of all Medicare hospit al expenditures. Based upon estimated Medicare costs for hospital service for 2011 of about $250 billion; we estimate that $7 billion to $8 billion of these cost s may be for PAHs.4 Table 1: Inpatient Hospitalizations for Dual Eligible Population Population 5,569,903 Percentage with a least one hospitalization 27% Total hospitalizations 2,691,276 • Total costs (in billions) $27.5 • Hospitalization rate (per 1,000 person years) 574 • Average length of stay (days) 7.1 • Average Medicare cost $9,815 • Average Medicaid cost $411 Source: CMS analysis of 2005 Medicare and Medicaid linked file Table 2: Summary Statistics on Dual Eligible Population and PAHs Population Percentage of hospitalizations that were potentially avoidable Percentage of Dual Eligibles with at least one PAH Percentage of all Medicare hospital costs from Dual Eligible PAHs Potentially avoidable hospitalizations 5,569,903 26% 9% 3% 699,818 • Total costs (in billions) $5.6 • Rate (per 1,000 person-years) 151 • Average length of stay (days) 6.1 • Average Medicare cost for PAHs $7,665 • Average Medicaid cost for PAHs $333 2011 projected costs attributable to Dual Eligible PAHs $7-8 Billion Source: CMS analysis of 2005 Medicare and Medicaid linked file Potentially Avoidable Hospitalizations across Health Care Settings Overall, the PAH rate among dual eligible beneficiaries was 151 per 1,000 person years, but there was considerable variation across health care settings. The rate was highest in skilled nursing facilities (942 per 1,000 person years) followed by nursing facilities. PAH rates were lowest for dual eligible beneficiaries living in the community, but varied by whether the beneficiary received a waiver for home and community based services (HCBS). Those with the HCBS waiver had a PAH rate of 250 per 1,000 person years compared to 88 per 1,000 person years for those without the waiver. While differences in PAH rates across settings are important for identifying strategies to reduce potentially avoidable hospitalizations, a few notes on the interpretation of these differences is warranted. First, beneficiaries spend far fewer days in skilled nursing facilities (SNF) than any other setting due to Medicare coverage limitations and the key role SNFs play in stabilizing and rehabilitating complex patients. Further, these rates do not adjust for the generally higher acuity levels of SNF beneficiaries or the fact that most SNF care immediately follows a hospital stay – so many of the SNF PAHs may also be readmissions. Center for Strategic Planning 3 Source: CMS analysis of 2005 Medicare and Medicaid linked file In addition to knowing the PAH rate across health care settings, it also is import ant to know which settings have the highest percentage of beneficiaries with at least one PAH event. Overall, the percentage of dual eligible beneficiaries who experienced at least one potentially avoidable hospitalization was 9.1%. The percentage was highest for those in nursing home settings at 16.4%, followed by beneficiaries with the HCBS waiver at 12.5%, skilled nursing facility at 9.4%, and those in the community but not in HCBS at 5.2%. PAH rates vary across health care settings. PAH rates are highest for dual eligible beneficiaries in skilled nursing facilities and lowest for those in community settings. Differences across settings in PAH rates and percentages reflect the fact that while the SNF setting has the highest PAH rate, beneficiaries often do not spend much time in this setting. In contrast, those in nursing facilities have more opportunities (more days in the setting) for a PAH; as a result, nursing facilities have a higher percent age of beneficiaries with at least one of these events. Potentially Avoidable Hospitalizations across States There is almost a fourfold difference in PAH rates across states, from the lowest in Alaska (65 per 1,000 person years) to the highest in Louisiana (231 per 1,000 person years). While the data show significant variation across states, this Figure 2: Variation across States study does not control for (Expressed per 1,000 person-years to adjust for dif ferences in length of stay) differences in patient health across states. The underlying data for all 50 states can be seen in Table 3. The states with the highest and lowest overall PAH rates showed little variation across all health care settings. Table 3 also identifies the top five and lowest five performing states for each health care setting. U.S. Average = 151 Source: CMS analysis of 2005 Medicare and Medicaid linked file “ “ Figure 1: Differences across Settings (Expressed per 1,000 person-years to adjust for differences in length of stay) Table 3: Potentially Avoidable Hospitalizations by Source and State—Dually Eligible Beneficiaries from Aged or Disabled, by Hospitalization Rate, 2005 ‡ State U.S. Louisiana Kentucky Pennsylvania Hospitalization rate (per 1,000 person-years)^^ -- Lowest 5 States , Highest 5 States All Duals NF SNF HCBS 338 942 250 151 † 551† † † 231 220 463 † Other/Community 88 1,253† 301 115† 1,126 † 116† 377 † † 318 1,025 317 90 † 446† 1,464† 2,423† 104 205 204 † 309 1,011 315 102 395 1,196 248 94 194 447 † 1,075 281 90 219 New Jersey 205 Ohio Illinois Arkansas Kansas 193 344 928 212 78 Indiana 189 306 828 270 120 83 † † Delaware 185 350 1,298 211 Texas 184 414 997 266 89 District of Columbia 182 443 1,215† 379† 117† Oklahoma 179 444 1,202 272 West Virginia 177 393 895 348 112† Georgia 176 378 970 265 97 Missouri 174 365 1,048 245 99 Maryland 172 352 1,154 271 97 Alabama 168 337 869 226 103 Mississippi 162 487 1,102 271 105 Virginia 158 308 754 307 90 Florida 156 345 973 252 97 † † † 86 Wyoming 151 247 634 231 63 North Dakota 150 242 615 197 80 Connecticut 149 202 704 204 67 Tennessee 149 409 1,018 253 110 South Carolina 144 325 908 279 97 Michigan 142 280 984 236 99 South Dakota 141 255 687 121 ‡ 67 Iowa 137 268 684 201 56 Nebraska 137 287 646 177 71 New York 137 293 814 * 92 Montana 130 206 556 ‡ 126‡ 90 North Carolina 130 312 758 279 95 Nevada 128 264 793 241 77 Rhode Island 123 320 1,063 264 61 Colorado 115 215 668 172 50 New Hampshire 115 ‡ 162 624 228 58 Massachusetts 114 290 782 271 72 Wisconsin 110 197 725 * 74 Oregon 109 180 826 137 New Mexico 101 236 883 177 64 Washington 99 228 756 * 209 73 139‡ 42‡ California 96 336 1,008 Idaho 95 185 530 Minnesota 94 ‡ ‡ ‡ 49‡ 68 ‡ 262 815 142 58 ‡ 156‡ 574 145 52 ‡ 133‡ 478‡ 166 58 ‡ ‡ 147 553‡ 133‡ 45‡ ‡ 143‡ 195‡ 173 46‡ Utah 74 Hawaii 72 Vermont 67 Alaska 65 * Data unreliable; Note, Arizona and Maine also not included ^^ per 1,000 person year metric can be explained as follows. The national rate for NF is 338. On average, if three persons were to stay in a nursing facility for 365 days in the year, roughly one would have a PAH. Center for Strategic Planning 5 Leading PAH Conditions “ Five conditions are responsible for over 80% of the potentially avoidable hospitalizations. Congestive heart failure was the leading condition associated with a PAH. community had fairly similar breakdowns by condition. Congestive heart failure, chronic obstructive pulmonary disease/asthma, pneumonia, dehydration, and urinary tract infections were responsible for over 80% of potentially avoidable hospitalizations. For all dually eligible beneficiaries, the two leading conditions were congestive heart failure (22.9%) and chronic obstructive pulmonary disease/asthma (17.0%). For those in nursing facilities and in SNFs, pneumonia was the leading cause for a PAH, accounting for nearly one-third of all cases. The percentages were also similar for urinary tract infections and dehydration. However, some differences were seen between the two settings. Congestive heart failure accounted for 11.6% of potentially avoidable hospitalizations from nursing facility stays, but 16.8% from skilled nursing facility stays. On the other hand, falls/trauma accounted for 9.4% of potentially avoidable hospitalizations from Medicaid nursing facility stays, but 5.2% from Medicare skilled nursing facility stays. This underscores that the populations are somewhat distinct. Table 4: PAHs Primarily Attributable to Select Conditions Potentially avoidable hospitalizations Percentage distribution All 699,818 100.0% Congestive heart failure COPD, Asthma Dehydration Pneumonia Urinary tract infection 160,397 118,936 103,024 101,357 87,296 22.9% 17.0% 14.7% 14.5% 12.5% Sum of subgroup 571,010 81.6% Condition For those in HCBS and otherwise in the community, three conditions accounted for nearly 75% of all PAHs-congestive heart failure, COPD/asthma, and dehydration. The biggest difference was observed with urinary tract infection, where those in HCBS had a significantly higher percentage than those otherwise in the community. Source: CMS analysis of 2005 Medicare and Medicaid linked file There were differences by setting in the conditions that were responsible for potentially avoidable hospitalizations. In general, the leading causes were similar for beneficiaries in nursing facilities and SNFs, while those in HCBS and otherwise in the “ Table 5: Percentage of Potentially Avoidable Hospitalizations by Condition and Setting For those in a nursing facility or SNF, pneumonia was the leading condition associated with a PAH. “ “ All Duals NF SNF HCBS Other/Community Altered mental status, acute confusion, delirium 0.3 0.6 0.6 * * Anemia 1.0 2.2 2.3 * * COPD, asthma 17.0† 6.0 5.5 23.6† 26.6† Congestive heart failure 22.9 † 11.6 Constipation, impaction Dehydration † 16.8 † 33.0 † 30.8 1.4 1.1 0.8 2.0 1.6 14.7† 10.3† 12.9† 18.4† 17.7† Diarrhea, gastroenteritis, C. Difficile 0.9 1.6 3.0 * * Falls/trauma 3.8 9.4† 5.2 * * 1.8 Hypertension † 1.0 0.2 0.2 1.0 14.5† 32.8† 30.5† * * Poor glycemic control 2.4 0.7 0.7 2.0 4.1 Psychosis, agitation, organic brain syndrome 0.6 1.4 1.1 * * Seizures 4.2 2.6 2.1 3.6† 6.1† Skin ulcers, cellulitis 2.3 Pneumonia Urinary tract infection Weigh loss and malnutrition 12.5 0.6 4.9 † 14.2 0.4 † 5.9† * * 11.7† 15.7† 10.6† 0.8 0.7 0.7 * These conditions were not included for beneficiaries in HCBS or otherwise in the community. † The top five conditions by setting. 6 Center for Strategic Planning Policy Considerations and CMS Initiatives Data Source and Methodological Notes The misalignment between the Medicare and This research builds upon prior work conducted by the Policy and Data Analysis Group on the dual eligible population and examines the prevalence and cost of PAHs across health care settings, geographic areas, and type of condition. The data source for this analysis is the beneficiary level linked Medicare and Medicaid administrative claims for 2005. The study population includes fee-for-service (FFS) beneficiaries, who were eligible for both Medicare and full Medicaid benefits for at least one month during the calendar year 2005, representing nearly 85% of all dual eligible beneficiaries (5.6 million of the total 6.6 million). Dual eligible beneficiaries were excluded from this analysis if they were enrolled in managed care programs, lived in states that did not report Medicaid data, or were assigned more than one Medicaid identification number within the same state. Medicaid programs has been cited as one of the leading causes for the high PAH rate among dual eligible beneficiaries. 5 Medicare is the payer for inpatient hospital costs, so Medicaid programs have few financial incentives to limit hospitalizations. The perverse incentive is particularly true for Medicaid nursing facility residents, where complex patients can be sent to a hospital for treatment at virtually no additional costs to the Medicaid program. In response, CMS has announced initiatives to help combat the problem. The MedicareMedicaid Coordination Office in collaboration with the Center for Medicare and Medicaid Innovation will establish a new initiative to help States improve the quality of care for people in nursing facilities by reducing preventable inpatient hospitalizations. This initiative supports the Administration's Partnership for Patients goal of reducing hospital readmission rates by 20% by the end of 2013. 6 CMS will competitively select and partner with independent organizations that will provide enhanced clinical services to people in approximately 150 nursing homes. The intervention will be targeted to nursing facilities with high hospitalization rates and a high concentration of residents who are eligible for both the Medicare and Medicaid programs. Conclusion Dual eligible individuals make up less than 20% of either Medicare or Medicaid beneficiaries, but they account for about one quarter of Medicare expenditures, with hospitalizations being a major driver of increased costs3. This report shows that 26% of all hospitalizations for this population may have been avoidable and that roughly one in ten dual eligible beneficiaries had at least one PAH over the course of a year. The overall costs for PAHs for dual eligible beneficiaries are striking, accounting for 3% of all Medicare spending on inpatient care in 2005. If this percentage has remained constant since then, the total costs in 2011 would be roughly $7-8 billion. Reducing the number of PAHs for dual eligible beneficiaries would improve care and likely lead to a meaningful decrease in Medicare spending. Following the methods used in the report "Cost Drivers for Dually Eligible Beneficiaries: Potentially Avoidable Hospitalizations from Nursing Facility, Skilled Nursing Facility, and Home and Community-Based Services Waiver Programs"3, PAH rates are expressed per 1,000 person years to take into account variation in the length of stay across settings and to standardize events by time. A higher rate in a setting indicates that, on average, a person on any given day in that setting would be more likely to have a PAH than those in a lower rate setting. For example, for nursing home benefici aries, the potentially avoidable hospitalization rate is 338 per 1,000 person years. At a nursing home, if three beds are full for the entire year , on average, the odds are that one person from those three beds will have a potentially avoid able hospitalization. Also, in comparing conditions across settings, we used a shorter list of conditions for dual eligible beneficiaries receiv ing the HCBS waiver or otherwise in the com munity. The subset of conditions identified reflects the lower levels of support available to HCBS waiver enrollees compared to dual eligible beneficiaries in nursing facilities or skilled nursing facilities. The major omission was pneumonia, which accounts for nearly one-third of PAHs for those in nursing facilities and skilled nursing facilities. Other omissions include altered mental state, anemia, diarrhea, falls and trauma, psychosis, and skin ulcers. Table 5 flags these conditions with an asterisk. Center for Strategic Planning 7 Acknowledgements The author is appreciative for the dat a analytics and programming performed by the Research Triangle Institute. The author would also like to thank his colleagues in the Policy and Dat a Analysis Group, and in particular Niall Brennan and Eric Rollins, for their insights and support. Reviewer comments are gratefully acknowledged from the Center for S trategic Planning, Information Dissemination and Analysis Group, particularly Christine S. Cox, Kimberly Lochner and Cynthia Riegler . Author Information Misha Segal, MBA is with the Center for Strategic Planning, Policy and Data Analysis Group at the Centers for Medicare and Medicaid Services. Suggested Citation Segal M. Dual Eligible Beneficiaries and Potentially Avoidable Hospitalizations. Washington, DC: Centers for Medicare and Medicaid Services, 2011. References 1. MedPAC. A Data Book: Health Care Spending and the Medicare Program (June 2011). Washington, DC: Medicare Payment Advisory Commission, 2011. 2. Coughlin T, Waidmann T, and O'Malley Watts M. Where Does the Burden Lie? Medicaid and Medicare Spending for Dual Eligible Beneficiaries. The Kaiser Commission on Medicaid and the Uninsured, the Henry J. Kaiser Family Foundation, 2009. http://www.kff.org/medicaid/7895.cfm Accessed September 1, 2011. 3. Walsh EG, Freiman M, Haber S, Bragg A, Ouslander J, and Wiener JM. Cost Drivers for Dually Eligible Beneficiaries: Potentially Avoidable Hospitalizations from Nursing Facility, Skilled Nursing Facility, and Home and Community-Based Services Waiver Programs. RTI International, CMS Contract No. HHSM-500-2005-00029I, 2010. http://www.cms.gov/Reports/Downloads/costdriverstask2.pdf Accessed September 1, 2011. 4. Centers for Medicare and Medicaid Services. National Health Expenditure Dat a. www.cms.gov/NationalHealthExpendData/25_NHE_Fact_Sheet.asp Accessed September 1, 2011. 5. Verdier, J. Coordinating and Improving Care for Dual Eligibles in Nursing Facilities: Current Obst acles and Pathways to Improvement. Mathematica Policy Research, Inc, March 2010. http://www.mathematicampr.com/publications/pdfs/health/nursing_facility_dualeligibles.pdf Accessed September 1, 2011. 6. Centers for Medicare and Medicaid Services, Medicare-Medicaid Coordination Of fice. Reducing Preventable Hospitalizations Among Nursing Facility Residents. http://www.cms.gov/medicare-medicaidordination/09_ReducingPreventableHospitalizationsAmongNursingFacilityResidents.asp#TopOfPage Accessed September 1, 2011.
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