Risk Adjustment May Lessen Penalties On Hospitals Treating Complex Cardiac Patients Under Medicare's Bundled Payments

Area of Science:

• Health Economics
• Healthcare Policy
• Cardiovascular Medicine

Background:

• Medicare is exploring cardiac bundled payment programs for acute myocardial infarction and coronary artery bypass graft to control spending.
• Current proposals may unfairly penalize hospitals by not accounting for patient risk factors in financial reconciliation.
• This study examines the impact of risk adjustment on Medicare's cardiac bundled payment program.

Purpose of the Study:

• To estimate the effect of adjusting for patient medical complexity and social risk on hospital reconciliation payments.
• To assess the fairness of Medicare's proposed cardiac bundled payment program for different hospital types.

Main Methods:

• Analysis of Medicare beneficiary data for acute myocardial infarction and coronary artery bypass graft from 2011-2013.
• Estimation of reconciliation payments with and without adjustments for medical complexity and social risk.
• Comparison of payment adjustments across hospitals serving diverse patient populations.

Main Results:

• Accounting for medical complexity significantly reduced penalties for hospitals with high medical severity, safety-net hospitals, and minority-serving hospitals.
• Social risk adjustment had a smaller impact after medical complexity was considered.
• Risk adjustment narrowed the gap in reconciliation payments, improving fairness for certain hospitals.

Conclusions:

• Risk adjustment for medical complexity is crucial for equitable implementation of cardiac bundled payment programs.
• Adjusting for patient risk factors may encourage hospitals to continue caring for complex and vulnerable patient populations.
• Medicare's bundled payment models require robust risk adjustment to ensure fairness and maintain care quality.