Hospital-physician integration and risk-coding intensity.

Area of Science:

• Health Services Research
• Health Economics
• Medical Management

Background:

• Hospital-physician integration is a growing trend in healthcare.
• Integration may enable resource and management sharing, potentially influencing patient severity coding.
• Accurate patient severity coding is crucial for reimbursement in risk-based payment models.

Purpose of the Study:

• To analyze the impact of hospital-physician integration on the coding of patient diagnostic severity.
• To determine if integration leads to changes in how physicians report patient complexity.

Main Methods:

• Utilized a two-way fixed effects model, event study, and stacked difference-in-differences analysis.
• Analyzed 5 million patient-year observations from 2010 to 2015.
• Controlled for changes in patient populations and physician visit frequency.

Main Results:

• Hospital-physician integration was associated with a 2%-4% increase in coded patient severity.
• This increase is equivalent to the risk-score impact of patients aging by 4-8 months.
• The observed effect was not attributable to shifts in patient demographics or encounter rates.

Conclusions:

• Findings support the hypothesis that hospitals share organizational resources with integrated practices to enhance measured clinical severity.
• Increased coding intensity can improve performance in alternative payment models and pay-for-performance programs.
• This phenomenon may contribute to rising overall healthcare expenditures.