Key result
Large Medicare payment cuts linked to ~6% slower improvement in AMI readmissions versus small cuts.
Why the study?
Do large Medicare payment cuts worsen 30-day readmission trends in Medicare patients compared to small payment cuts?
Observational
Yes
Do large Medicare payment cuts worsen 30-day readmission trends in Medicare patients compared to small payment cuts?
Effect estimate: 6% gap for AMI, 4% gap for CHF and pneumonia
p-value: p=<0.01
Large Medicare payment cuts were associated with a temporary widening gap in 30-day readmission rates for conditions like acute myocardial infarction and congestive heart failure, but this negative association dissipated in the long run.
Large Medicare cuts may transiently slow readmission gains; leaves open whether reimbursement policy warrants targeted quality safeguards.
BACKGROUND AND OBJECTIVE: The Affordable Care Act enacted significant Medicare payment reductions to providers, yet long-term effects of such major reductions on patient outcomes remain uncertain. Using the 1997 Balanced Budget Act (BBA) as an experiment, we compare long-run trends in 30-day readmission across hospitals with different amount of payment cuts. RESEARCH DESIGN, SUBJECTS, AND MEASURES: Using 100% Medicare claims between 1995 and 2011 and instrumental variable hospital fixed-effects regression models, we compared changes in 30-day readmission trends for 5 leading Medicare conditions between urban hospitals facing small, moderate, and large BBA payment reductions across 4 periods [1995-1997 (pre-BBA period), 1998-2000, 2001-2005, 2006-2001]. Patient sample includes Medicare patients who were admitted to general, acute, urban, short-stay hospitals in the United States 1995-2011. Sample size ranges from 1.4 million patients for acute myocardial infarction to 3 million for pneumonia. RESULTS: We found that 30-day readmission trends diverged post-BBA (2001-2005) between hospitals facing small and large payment cuts, where large-cut hospitals experience slower improvement in readmission rates relative to small-cut hospitals. The gap between small-cut and large-cut hospitals readmission trend was 6% for acute myocardial infarction, 4% for congestive heart failure and pneumonia (all P<0.01) in the 2001-2005 period. The gaps between hospitals were eliminated by the 2006-2011 period as the effect of BBA naturally dissipated over time. CONCLUSIONS: Although payment-cut differences are associated with widening gaps in readmission rates across hospitals, the negative association appears to dissipate in the long run.
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Shen et al. (2016) conducted an observational in Acute myocardial infarction, congestive heart failure, pneumonia. Large Medicare payment reductions (Balanced Budget Act) vs. Small Medicare payment reductions was evaluated on 30-day readmission trends (6% gap for AMI, 4% gap for CHF and pneumonia, p=<0.01). Large Medicare payment cuts were associated with slower improvement in 30-day readmission rates vs small cuts (6% gap for AMI, 4% for CHF/pneumonia; P<0.01), though this gap dissipated over time.
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