Medicare Post-Acute Care Episodes and Payment Bundling

Melissa Morley,¹ Susan Bogasky,² Barbara Gage,³ Shannon Flood,⁴ Melvin J. Ingber¹

¹RTI International
²Department of Health and Human Services—Office of the Assistant Secretary for Planning and Evaluation
³The Brookings Institution—Engelberg Center for Health Care Reform
⁴Centers for Medicare & Medicaid Services—Center for Medicare & Medicaid Innovation

Background: The purpose of this paper is to examine service use in an episode of acute and post-acute care (PAC) under alternative episode definitions and to look at geographic differences in episode payments.
Data and Methods: The data source for these analyses was a Medicare claims file for 30 percent of beneficiaries with an acute hospital initiated episode in 2008 (N=1,705,794, of which 38.7 percent went on to use PAC). Fixed length episodes of 30, 60, and 90 days were examined. Analyses examined differences in definitions allowing any claim within the fixed length period to be part of the episode versus prorating a claim extending past the episode endpoint. Readmissions were also examined as an episode endpoint. Payments were standardized to allow for comparison of episode payments per acute hospital discharge or PAC user across states.
Results: The results of these analyses provide information on the composition of service use under different episode definitions and highlight considerations for providers and payers testing different alternatives for bundled payment.

Keywords: access, demand, utilization of services, health care costs, Medicare, payment systems, FFS, capitation, RBRVS, DRGs, risk adjusted payments, rehabilitation services

doi: http://dx.doi.org/10.5600/mmrr.004.01.b02

Full text HTML for this article is not yet available. Please click the PDF download link to access this article.