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Data Analysis Underscores Value of Home Health in the Medicare Comprehensive Care for Joint Replacement Payment Model

June 16, 2016
Contact: Emily Adler

Data Analysis Underscores Value of Home Health in the Medicare Comprehensive Care for Joint Replacement Payment Model

Data Analysis Underscores Value of Home Health in the Medicare Comprehensive Care for Joint Replacement Payment Model

The Alliance for Home Health Quality and Innovation (the Alliance) today released a new data analysis from Dobson | DaVanzo & Associates that found the use of home health after a hospital stay is associated with cost effective care and lower readmission rates for Medicare patients who have undergone major joint replacement surgery. The analysis examined the distribution of discharges for patients from the hospital to various post-acute care (PAC) settings, the average Medicare payment per episode by first PAC setting, and the average readmission rate for related conditions within the Centers for Medicare & Medicaid Services’ (CMS) Comprehensive Care for Joint Replacement (CJR) model.

Launched in April of this year in 67 metropolitan statistical areas (MSAs), CMS’s goal for the CJR model is to provide Medicare beneficiaries undergoing major joint replacement with coordinated, high quality, cost-effective care. This bundled payment model begins upon admission to the hospital and ends 90 days post-discharge, making the care received after the initial hospital stay and preventing readmissions critical components to reducing health care costs and improving care quality.

The MSA-level data analyzes the distribution of post-acute care services for MS-DRG 470 patients (major joint replacement without major complication or comorbidity) and revealed that on average, when home health was the first PAC setting after hospital discharge, episodes have significantly lower Medicare episode payments and readmission rates when compared to patients discharged to facility-based settings.

When looking at the various MSA regions, home health care accounts for 41 percent of discharges, but within regions, the use of home health spans a wide range. For example, in New York City, just 16 percent of patients are discharged to home health compared to 48 percent in Boulder, Colorado.

The data also points to significant cost savings for the Medicare program when patients enter home health care following a hospital stay. Across all settings and MSAs, the average Medicare episode payment for MS-DRG 470 CJR episodes is $24,900, but when home health is the first PAC setting, the average payment drops to about $19,900.

Readmission rates for all settings and MSAs for MS-DRG 470 patients average eight percent. However, patients receiving home health care immediately after an acute stay see a readmission rate of just five percent, compared to 12-15 percent for patients receiving rehabilitation in facility-based settings. Patient severity, aside from MS-DRG and presence of a fracture, was not controlled for in the analysis, but previous research conducted by Dobson | DaVanzo & Associates and other researchers suggests the presence of some overlap in clinical characteristics of patients that are admitted to different settings of care.

“In the post-acute care space, bundled payment initiatives, such as CJR, will be an essential part of achieving a health care system that rewards value-based approaches over the quantity of services provided,” said Teresa Lee, Executive Director of the Alliance. “This new data analysis establishes home health care, when clinically appropriate for patients, as a valuable, cost effective partner for hospitals and other conveners to collaborate with in delivering quality care while also achieving cost savings for patients, providers, and taxpayers.

“The Alliance stands ready to work with CMS and lawmakers as they reform the health care delivery system to elicit better patient outcomes and lower spending rates by providing valuable data on the role of post-acute care in bundled payment models.”

This analysis was completed using both the five percent and 100 percent samples of Medicare beneficiaries contained within the 2011-2014 Standard Analytic Files (SAF) Limited Data Set (LDS).

Click to view the complete analysis and data set .