Findings From Recent CMS Research On Medicare Brennan

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Findings from Recent CMS Research on
Medicare
Chair: Niall Brennan

Patent Expirations and Part D Spending on
Atypical Antipsychotic Medications
Eric Rollins
Director, Policy & Data Analytics Group
Office of Information Products and Data Analytics

Use of Generic Drugs in Part D, 2007-2012
● The share of total prescriptions filled with generics rose from 63%
in January 2007 to 84% in December 2012

3

Brand-Name Drugs Losing Patent Protection
● These figures are based on total U.S. sales

4

Part D Spending for Atypical Antipsychotics
ANTIPSYCHOTICS/ANTIMANIC AGENTS
2013 Spend (%)
2013 Fills (%)

Total Spending Trend
300
250

$5.8 B (6%)
29 8 M (2%)
29.8

200
150
100
50
2006

2007

2008

2009

2010

2011

2012

2013

5

Major Atypical Antipsychotics:
Patent Expiration Dates and Part D Market Shares
Drug

Generic
Name

Patent
Expiration *

Forms
Affected

Percentage of
2011 Fills

Clozaril
Risperdal
Zyprexa
Geodon

Clozapine
Risperdone
Olanzapine
Ziprasidone

30-Aug-96
30-Jun-08
24-Oct-11
02-Mar-12

Tablet
Tablet
Tablet
Capsule

5.2
25.6
14.3
5.5

1.7
6.5
26.2
7.1

Seroquel

Quetiapine
Fumarate

26-Mar-12
26
Mar 12

Tablet

34

32 3
32.3

Abilify

Aripiprazole

Apr-15

Tablet

12.1

19.7

N/A

N/A

N/A

96.7

93.5

Total

Percentage of
2011 Spend

* This is the expiration date for the patent on the leading dosage form, as reported by the
FDA Orange Book; the date for Abilify comes from Express Scripts/Medco's file of anticipated
patent expiration dates, accessed on April 1, 2013.

6

Generics as a Share of Total Prescriptions,
by Drug
Drug, by Months after Patent Expiration
(Here month 1 is the month when the patent expired.)

7

Part D Market Shares, by Prescriptions, 2006-2013

(Risperdal
patent
expires)

(Zyprexa (Seroquel
patent
patent
expires) expires)

8

Part D Market Shares, by Spending, 2006-2013

(Risperdal
patent
expires)

(Zyprexa (Seroquel
patent
patent
expires) expires)

9

Year-over-Year Monthly Growth Rates
in Average Spending per Prescription
(Here month 0 is the month when the patent expired)

10

11

12

13

14

Key Findings
● Rapid generic substitution (80-90% within 2 months of patent
expiration and ~95% within 9 months)
months), but limited therapeutic
substitution within the drug class

● Savings in first 180 days after patent expiration were relatively
limited for two drugs


The average cost of the brand-name
brand name drug increased rapidly leading up
to patent expiration



When a single generic manufacturer held the market exclusivity rights
for the first 180 days after patent expiration, the average cost of the
generic was similar to the brand-name cost 12-24 months prior

● The average cost of generic prescriptions declined sharply after
the 180-day period, but full extent of savings may take years to
appear
15

Use of Post-Acute Care
Following a Hip or Knee Replacement
(DRG 470)
Allison Oelschlaeger
Office of Information Products and Data Analytics

Episode Construction
● Episodes started with an index hospitalization that occurred in CY
2010


Initial episodes had to be preceded by a 30-day clean period, during
which the beneficiary received no acute or post-acute
post acute care services

● Episodes ended “naturally” with either a clean period (20 days) or
admission for certain surgical MS-DRGs
MS DRGs

● PAC defined as use of home health, SNF, IRF, LTCH, or
Part B outpatient therapy (hospital outpatient therapy services
and therapy claims delivered by independent therapists)

17

MS-DRG 470: Profile
● Total Episodes = 285,520

$25,000

(Total discharges for DRG 470 = 437,981)

● Total Spending = $6.1 B
● Average episode cost = $21,317

$20,000

$15,000

$990
$731

$7,663

● Average episode length = 56 days
● Beneficiaries:




Survived the index admit in 99.9% of
episodes (285,242)
Survived the index and used PAC as the
fi t service
first
i after
ft the
th index
i d in
i 92.3%
92 3% off
episodes (263,507)

● Readmissions per episode = 0.09

$10,000

$5,000

$11,942

$0
Index
Readmissions

PAC
Other

All figures based on standardized dollars

18

Distribution of Spending
PAC is a much larger share of episode spending for MS-DRG 470
100%
90%
80%
70%

5%
3%

9%
12%

SNF
48%

$7,663
36%

23%

60%

HH
28%

$3,770
$
,

50%
LTCH
1%

40%
30%

Therapy
7%

56%

56%

All Episodes

MS-DRG 470

$16,083

$21,325

IRF
16%

20%
10%
0%
Avg Spending
Per Episode
p

Index

PAC

Readmissions

Other

Limited to episodes where the beneficiary survived the index admit

19

Distribution of Episodes
by First/Second Service Used after Discharge
1st Service After Index

2nd Service After Index

Service

% of
Total

None

Therapy

HHA

SNF

IRF

LTCH

Acute
Admit

None

7.1%

7.1%

--

--

--

--

--

--

Therapy

11.4%

10.8%

--

0.1%

*

*

--

0.4%

HHA

35.2%

15.1%

18.7%

--

0.1%

*

*

1.2%

SNF

36.3%

5.0%

9.1%

18.9%

0.9%

0.1%

*

2.4%

IRF

9.5%

0.8%

2.4%

5.2%

0.7%

*

*

0.4%

*

*

*

*

*

*

--

*

0.5%

0.2%

0.1%

0.1%

0.1%

*

*

*

100.0%

39.0%

30.3%

24.3%

1.8%

0.1%

*

4.4%

LTCH
Acute Admit

Episodes that accounted for less than 0.1% of the total are marked with an asterisk

Limited to episodes where the beneficiary survived the index admit

20

Average Episode Cost
by First/Second Service Used after Discharge
1st Service After Index

2nd Service After Index

Avg.
Episode
Cost

None

Therapy

HHA

SNF

IRF

LTCH

Acute
Admit

None

$9 301
$9,301

$9 301
$9,301

--

--

--

--

--

--

Therapy

$14,000

$13,551

--

$18,196

*

*

--

$24,281

HHA

$16,920

$15,689

$17,088

--

$27,202

*

*

$28,548

SNF

$27,154

$24,860

$23,388

$26,729

$36,345 $40,065

*

$45,865

IRF

$32,746

$25,466

$26,887

$32,595

$50,015

*

*

$52,724

*

*

*

*

*

*

--

*

$24,319

$15,732

$20,609

$24,463

$36,599

*

*

*

$21,325

$15,311

$19,764

$27,944

$41,405 $39,711

*

$39,881

Service

LTCH
Acute Admit

Episodes that accounted for less than 0.1% of the total are marked with an asterisk

Limited to episodes where the beneficiary survived the index admit

21

Average Episode Cost by HRR
National Average = $21,325

Hackensack, NJ
$29,254

A h
AK
Anchorage,
$15,222

Ratio to National
Average

Limited to episodes where the beneficiary survived the index admit

22

Outlier HRRs
Average % of “No
Episode
p
PAC”
Length Episodes
High Outlier
HRRs*
HRRs

69

All HRRs

56

Low Outlier
HRRs*

46

3.4%

7.1%

15 6%
15.6%

Share of PAC Episode Dollars Going to . . .
SNF

HHA

IRF

Therapy

LTCH

46.40%

22.60%

24.00%

6.60%

0.40%

($5,217) ($2,505) ($2,825)

($724)

($42)

47.90%

16.20%

7.20%

0.50%

($3,986) ($2,345) ($1,344)

($595)

($46)

54 00%
54.00%

28.20%

24 00%
24.00%

11 10%
11.10%

10 80%
10.80%

0 10%
0.10%

($3,112) ($1,332)

($648)

($601)

($6)

*Outlier HRRs had spending that was 15% above / below the national average.

Limited to episodes where the beneficiary survived the index admit

23

Average Episode Length
Rochester, MN
29 days

National Average = 56 days

Hackensack, NJ
78 days

Ratio to National
Average

Limited to episodes where the beneficiary survived the index admit

24

Percent of Episodes without PAC services
Missoula, MT
29.2%

National Average = 7.1%

Worchester, MA
1.8%

Limited to episodes where the beneficiary survived the index admit

25

Average PAC Cost (for Episodes with PAC spending)
National Average = $8,295

Hackensack, NJ
$14,363

A h
AK
Anchorage,
$4,187

Ratio to National
Average

Limited to episodes where the beneficiary survived the index admit

26

Real-Time
Real
Time Reporting of Medicare
Readmissions Data
Niall Brennan
g Director, Offices of Enterprise
p
Management
g
Acting

Why CMS is Focused on Readmissions
● Nearly one in five fee-for-service Medicare patients returns to the hospital within
30 days of being discharged


2 million readmissions each year



139,000 beneficiaries had 3 or more readmissions in 2012

● High readmission rate can be indicator of poor quality care
● Readmissions estimated to cost Medicare $26 billion per-year,
per year, $17 billion of
which is potentially avoidable

● Examples of CMS initiatives to reduce readmissions:


Hospital Readmissions Reduction Program



Partnership for Patients



Shared savings programs



Quality Improvement Organizations
28

OIPDA Readmission Rate Methodology
● Source: 100% Medicare claims from Chronic Conditions Warehouse
● Medicare fee-for-service beneficiaries enrolled in Part A
● All acute care hospitals (IPPS and CAH)
● Index stay = impatient admission where patient did not die in hospital
● Readmission stay = inpatient admission within 30 days of discharge
from index stay

● Stays can count as both index admission and readmission
● Readmission is attributed to the month of index stay and location of
facility where index admission occurred

● Not risk adjusted

29

Real-Time Reporting of Readmissions Data
● Takes up to 13 months for all Medicare claims to reach final
action status

● OIPDA adjusts preliminary readmissions data to compensate for
claims that have not reached final action

● Can report reliable monthly readmissions data after just 2 months
of claims run
run-out
out


Far faster than other types of reporting



Difficult to perform risk adjustment on real-time basis

● Timely reporting improves feedback to CMS programs and
h l enable
helps
bl faster
f
quality
li iimprovement

30

Claims Maturity for Index and Readmission Stays
For a Typical Month
100%

800

80%

600

60%

400

40%

200

20%

0

Percentt of Final S
Stays

Nu
umber of S
Stays (in th
housands)

1,000

0%
1

2

3

4

5

6

7

8

9

10

11

12

13

Months of Claim Run-Out
Run Out
Index Admission Stays
% Index Admissions Processed

Readmission Stays
% Readmissions Processed

31

Improvement in Readmission Rate Among
Medicare FFS Beneficiaries
● After holding steady at 19% over 2007-2011 period, national
readmission rate started falling in 2012


18.5% in 2012 and 17.9% in 2013

● Improvement has been broad-based across geography,
demographics, and clinical conditions

● Estimate 150,000 fewer readmissions occurred during 2012-2013
than if readmission rate had remained at 19%

● Reduction in inpatient readmissions does not seem to be driven
by substitution by outpatient ED visits or observation stays

32

Medicare 30-Day, All-Condition Readmission Rate
January 2007 – February 2014
20%

Readmiss
sion Rate

19%

19.0% (2007-2011)
18%
18.5% (2012)
17.9% (2013)
17%

16%

2007

2008

2009

Monthly Readmission Rate

2010

2011

2012

2013

Mean Rate for Period

33

Medicare 30-Day, All-Condition Readmission Rate
January 2007 – February 2014
20.0%
19.5%

Readmission Rate
e

19.0%
18.5%
18.0%
17.5%
17.0%
16.5%
16.0%
%
J

F

M

A

M

J

J

A

S

O

N

D

Month
2007-2011

2012

2013

2014

34

Annual Change in Hospital Services 30 Days Post
Inpatient Discharge
● Hospital outpatient services growing more slowly than readmissions
have been declining
Ch
hange in N
Number of S
Stays/Visitts

60,000
40,000
20,000
0
-20,000

Inpatient Readmissions

-40,000

Post-Discharge ED Visits

-60,000

Post-Discharge Observation
Stays

-80,000
-100,000
-120,000
2008

2009

2010

2011

2012

35

Change in Medicare All-Condition Readmission Rate
2007-2011 Mean to 2013,
2013 by Hospital Referral Region
Change in national rate = -1.1 percentage point

36

Medicare All-Condition Readmission Rate by Age
24%

Readmiss
sion Rate

22%

Under 65

20%

65 69
65-69
18%

70-79
80 and older

16%

14%
2007

2008

2009

2010

2011

2012

2013

37

Medicare All-Condition Readmission Rate by Race
26%

Readmissiion Rate

24%

Black

22%

Hispanic
p

20%

Other
18%

Non-Hispanic White
16%

14%
2007

2008

2009

2010

2011

2012

2013

38

Medicare All-Condition Readmission Rate by Hospital
Size
● Smaller hospitals started with lower rates, but have also seen the largest
reductions
22%

Re
eadmission Rate

20%
18%

2011

16%

2013
2011 Mean

14%

2013 Mean

12%
10%
1-49

50-99

100-199
200-299
300-399
Number of Beds Per-Hospital

400-499

500+

39

Annual Percentage Point Change in
Readmission Rate by DRG Type
● Rates have decreased across different types of services
Perc
centage Poin
nt Change in
n Readmissio
on Rate

0 2%
0.2%
0.1%
0 0%
0.0%
-0.1%
-0.2%

Medical DRGs

-0.3%

Surgical DRGs
-0.4%
-0.5%
-0.6%
-0.7%
2008

2009

2010

2011

2012

2013

40

Medicare Readmission Rate for Selected Conditions
● These conditions represent about half of total readmission stays
30%

Readmission Ratte

25%

20%

15%

2011
2013

10%

5%

41

Hospital Readmissions Reduction Program (HRRP)
● Section 3025 of the Affordable Care Act
● Reduces Medicare payments to IPPS hospitals with excess
readmissions

● Started by measuring heart failure,
failure acute myocardial infarction
infarction, and
pneumonia


Payment adjustments began in FY 2012

● CMS proposing to expand measures to include COPD and elective hip
and knee replacement
p


5 conditions represent 20% of all readmissions



Payment adjustments based on all 5 measures would start in FY 2015

● Readmission rates for these conditions have gone down, but
improvement
is not limited to these conditions
p
42

Medicare Unplanned Readmission Rate for
Conditions Measured by HRRP
28%

Readmis
ssion Rate
e

26%
24%

CHF

22%

COPD
AMI

20%

Pneumonia
18%

All Other

16%
14%
2007

2008

2009

2010

2011

2012

2013

Readmission rate for elective hip and knee replacement fell from 4.7% in 2011
to 3.8% in 2013 (not shown).

43



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