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»0777-WI REPORTDOCUMENTATION PHOE, 4.TWti Analysis ofHospitalIfedical StaffVolunePerfbimance Standards: TechnicalRqxDrt }A=yny. IQQ^t 7.AMiMlMafrttk) E. Miller, W. PeteWfelch O^iMMMlMHwl.Mib TheUrbanInstitute ML 2100MStreet, NW DRD/OR/DKES/NISB Washington, D.C. 20037 11. «» 18-C-90038/3-01 m u. HealthCareFinancingAdministration U.T^»««« OfficeofResearchandDemonstrations 6325Security Boulevard Baltimore, MD 21207 U.tui U.AbMnet(Umtt:200awM) Implementingavolume performancestandardformedicalstaffs requiresanumberof technicalanalyses,includingacasemixmeasurebasedoninpatientservicesandpayment or performance adjustors at the medical staff level. These technical analyses were providedinanearlierreport,however,inmeasuringphysicianservices(i.e.,volimieand intensity)peradmission,theearlierreportuseddeflatedphysiciancharges. Thisreport usestheMedicareFeeSchedule(MFS)relative valueunits(RVUs)inthesameclaims datatomeasurephysicianservicevolumeandintensity. Deflatedchargesmayreflectthe historical distortioninthepre-MFSsystemresultingfromphysicianchargingpractices. Consequently,theimpactofusingRVUsinsteadofchargesinthedevelopmentofthe casemix measure and multivariate analyses of RVUs per admission is examined and compared to prior findings on deflated charges. Database construction and the daeHveClFopAmecnotopoefratthievceaasgemriexemmeenatsu#r1e8-aCr-e90al0s3o8/r3e-v0i1ewed. Thisresearchisconductedunder 17.DoeuwwntAnatyM* VolunePerformance standardalternatives, hospitalmedical staff, n^dicareFeeSchedule diagnosticrelatedgrqiys (IM5), casemix, physicianservicevolvme,.physicianservice intensity, database construction, multivariateanalysis. b.M>wtimi»/Op>iitn6a4Taniw cCOSATIn«M/Oi«uD II.AvailaMllty 1*.SMurttyCiMs(TlitaRaoerU XI.Ne.«(Pt«M 59 ReleaseUnlimited MltiBMilHCtaa*OM*Patti 22>Fvfcs <SMANSt-Zlf.ll) Unclassified ornoNALromtm(4-77) (PwiMrtyNnS-35> tmli 6210-01 (Revised)March1993 AnalysisofHospitalMedicalStaff VolumePerformanceStandards: TechnicalReport MarkE.Miller W.PeteWelch TheUrbanInstitute 2100MStreet,N.W. Washington,DC 20037 SupportforthisresearchwasprovidedbytheHealthCareFinancingAdministrationtoThe UrbanInstitutethroughCooperativeAgreementNo. 18-C-90038/3-01. ThisCooperative Agreementsupportedanumberofresearchprojectsrelatedtoinhospitalphysicianexpenditures. Thetotalbudgetforalltheseprojectswas$493,914,andrepresentsthesolesourceoffunding. TheauthorswouldliketoacknowledgeEllenEnglertforresearchassistanceandPaulaBeasley andherstaffatSocialandScientificSystemsforprogramming. Anyopinionsexpressedare thoseoftheauthorsanddonotreflecttheopinionsoftheHealthCareFinancingAdministration, TheUrbanInstitute,oritssponsors. INTRODUCTION I. Implementingavolumeperformancestandardformedicalstaffsrequiresanumberof technicalanalyses. Forexample,acasemixmeasurebasedoninpatientphysicianservicesaswell aspaymentorperformanceadjustorsatthemedicalstaff-level(e.g.,teaching)mustbedeveloped. Thesetechnicalanalyseswereprovidedinanearlierreport(MillerandWelch 1991). However, inmeasuringphysicianservices(i.e.,volumeandintensity)peradmission,theearlierreportused (deflated)physiciancharges. WiththeimplementationoftheMedicareFeeSchedule(MFS)in January1992,RelativeValueUnits(RVUs)becameakeyelementinthepaymentsystemand thustheunderpinningsofamedicalstaffpolicyshouldalsobebasedonRVUs. Equally important,RVUsrepresentamoredirectmeasureofphysicianservicevolumeandintensity. Deflatedchargesmayreflectthehistoricaldistortioninthepre-MFSsystemresultingfrom physicianchargingpractices. Consequently,itisimportanttorevisethetechnicalfoundationsof amedicalstaffpolicyusingRVUsratherthandeflatedcharges.' Althoughanumberoftechnicalissueswillbetouchedoninthisreport,twoshouldbe highlighted. Thecasemixmeasureiscriticaltoapolicy: apolicymustcrediblybeableto controlfordifferencesbetweenmedicalstaffsintheirmixofpatients. Consequently,theimpact ofusingRVUsinsteadofchargesindevelopingthecasemixmeasureisimportant. Similaily, adjustorsatthemedicalstaff-levelcouldalsobeaffectedbytheuseofRVUsratherthancharges. Thenextsectionreviewsthedatabaseconstruction. Thethirdsectionreviewsthe developmentofourcasemixmeasures. InthissectionwewiUanalyzetheimpactofusingRVUs ratherthanchargestomeasurecasemix. Thefourthandfifthsectionspresent,respectively,a 'UndertakingthisanalysisusingRVUsratherthanchangesisanimportantinnovation. Inreconstructingthe databaseanotherinnovationwasalsoadded. Usinganationalsamplepresentsthepotentialproblemoffew admissionsforagivenhospital. AppendixAdiscussessignificanceteststojudgethereliabilityoftheRVUsper admissioncalculatedforagivenhospital. Althoughthesignificancemeasuredoesnotcomeintoplayinthis paper,itwillbeimportantinfuturework. g:\mm\6210V01rtporLwpi 3/1/933:04piii 1 univariateandmultivariateanalysisofRVUsperadmission. Thesetwosectionsreviewthe impactonmedicalstaffadjustersofusingRVUsratherthancharges. II. DATACONSTRUCTION Theconstructionofourdatabaseusing 1987claimsdatahasbeendescribedindetail elsewhere(MillerandWelch 1991),andwefollowedthesameprocesshere,whereweused 1989 data. Sincewewereinterestedincapturingphysiciansservicesrelatedtotheadmission,we neededtwo 1989files:MedicareProviderAnalysisandReviewRecord(MedPAR)andPartB MedicareAnnualData(BMAD). Bothare5percentbeneficiarysamples. Weperformedthesamebasicdataqualityscreeningperformedwhenthechargedatabase wasconstructed. Screensthatareimportantforconceptualreasonsarereviewedhereinmore detail. UsingtheHealthInsuranceSkeletonEligibilityWrite-Off(HISKEW)file,weexcluded anybeneficiarieswhowereonlyeligibleforPartAbecausethesebeneficiariescannothavePart B(e.g.,physician)bills. MedPARincludestheadmissionbillsformostbeneficiariesinHMOs, butphysicianbillsforthesebeneficiariesdonotconsistentlyappearinBMAD.^ Theinclusion ofHMObeneficiariesinouranalysiswouldinappropriatelyloweraverageRVUsperadmission. ThusweeliminatedanybeneficiarywhowasenrolledinanHMOatanypointduring 1989. WeperformedthebasicscreeningontheMedPARrecordsthatwehadperformed previously.' WescreenedtheBMADdatatoincludedonlyphysicianservicesasdefinedinthe OmnibusBudgetReconciliationAct(OBRA)of1989andpromulgatedintheFederalRegister (December12, 1989,pp.53818-53821). MedPARandBMADrecordsfromRhodeIslandwere droppedbecausedataareincompletefor1989inthe5percentBMAD. Certainhospitals (referredtoas"costelection"hospitals)canelecttoreceivealumpsumforphysicianservices -HMOmembershipincludesbeneficiariesinrisk-contractHMOs,cost-contractHMOs,andHealthCare PrepaidPlans(HCPPs). 'Forexample,MedPARrecordswereeliminatedforduplication, invaliddatesofservice,zerochiirges, admissiontonon-PPShospitals,andinvalidDRGs(e.g.,470). g:\mm\6210\Dlreportwpt 3/1/933:04pm 2 ratherthantheirphysiciansbeingpaidundertheusualfee-for-servicerules. Admissions(and associatedphysicianbills)fromcostelectionhospitalswereremovedbecausephysicianbillsare notsubmittedtoBMAD.'' PhysicianbillswerelinkedwithadmissionbillsbasedonbeneficiaryIDanddateof service. Servicesrenderedonorbetweenthedateofadmissionanddateofdischargewere definedasservicesprovidedduringthehospitalstay. AlsobasedonthebeneficiaryIDanddate ofservice,wedefined28-daypre-andpost-windowsaroundthestay. Thesameseriesofrules usedpreviouslywereusedtodealwithtransfers,physicianrecordsimperfectlymatchingthestay, physicianrecordsimperfectlymatchingthewindow,andsplittingthewindowperiodsbetween admissionsthatoccurredclosetogether. Briefly: • BMADrecordswerematchedfu-stonthestayandonlythenonthewindow. • IftheBMADperiodofserviceimperfectlymatchedasinglestay,allBMADRVUs wereassignedtothestay. • IfaBMADperiodofserviceoverlappedtwoormorestays(arareevent),allRVUS wereassignedtothesecondstay. • If(afterattemptingtomatchonthestay)theBMADperiodofserviceimperfecdy matchedasinglewindow,allRVUswereassignedtothewindow. • IfaBMADperiodofserviceoverlappedtwowindows(arareevent),theRVUswere assignedtothesecondwindow. Oncephysicianrecordswerelinkedwithadmissionbills,thenextstepwastoassign RVUstoeachbill. Thefundamentalproblemwasthatwewishedtoanalyzephysicianservices intermsofRVUsbutasyettherearenodataonservicespaidforunderMFS. Hence,we assignedRVUstopre-MFSbills,inparticular,billsfor1989. GeneralstrategyforassigningRVUs. FormostbillstheRVUscanbedeterminedbased ontheHCPCScodeandthemodifier,whichdistmguishesbetweenprofessional,technical,or *TheRhodeIslandscreenandthecostelectionhospitalscreenswereactuallyundertakenafterthelinkageof physicianbillstoadmissionsbecausetheyinvolvethehospitalproviderID. g:\mm\6210\01repoawpt 3/1/933:04pin 3 globalcomponents. TheMFSaspublishedintheNovember25,1992FederalRegisterwas obtainedinmachine-readableform.^ ThetotxilRVUs~thesumofthework,practiceexpense,andmalpracticeRVUs—wasfirst assignedtoeachbill. Becauseeven"totalRVUs"pertainstooneunitofserviceandabillmay representseveralunitsofservice,thenumberofRVUsassignedtoagivenbillwastheproduct ofthe"totalRVUs"andtheunitsofservice. Visitsandconsultations. TheMFSchangedthedefinitionsofevaluationandmanagement codes(i.e..visitandconsultationcodes). TTieFederalRegister(pp.59580-81)providesa crosswalkbetweentheoldandnewcodes. Inmanycases,theoldcodecrosswalkstoonenew code(e.g.,old90000becomesnew99201). Whentwooldcodescro.s.swalktoonenewcode, eacholdcodewasassignedtheRVUsofthenewcode. Complexityarisesonlywhenoneoldcodecrosswalkstoseveralnewcodes(e.g.,old 90200becomes99204,70percentofthetimeandbecomes99205,30percentofthetime). In suchcases,weassignedthenewvisitcodetheweightedaverageRVUsofitsoldequivalents (e.g.,RVUof90200is.7oftheRVUof99204and.3oftheRVUof99205). Initialconsultationcodesnowdifferentiatebyplaceofservice,whereasplaceofservice hadnoimpactonpaymentpriortotheMFS. Moreprecisely,aninitialconsultationinthe hospitalornursingfacilityhasaslightlydifferentRVUthananinitialconsultationelsewhere. Becauseofourfocusoninpatientphysicianservicesandintheinterestof.simplicity,we crosswalkedtheoldcodestothenewcodesforin-hospitalconsultations. BillsthatcannotbedirectlyassignedRVUs. Thereareanumberofreasonswhycertain billscannotbedirectlyassignedRVUs: (I)theHCPCScodeonthe 1989billdoesnotlinktoa HCPCScodeexplicitlyintheMFS,becausethecodeiscarrier-specificorbecauseitwasdeleted priorto 1991;(2)theHCPCScodedoeslinkbuttheMFSexplicidylacksRVUsforthecode 'AllreferencestotheFederalRegisterhereafterrefertoNovember25,1992unlessotherwisenoted. g:\mm\6210\01repoawpt 3/1/933:04pm 4 (statuscodesC,D,E,orX,seebelow);and(3),theHCPCScodeisforananesthesiaservice whichisnottechnicallypartoftheMFS. Whateverthesourceoftheproblem,oursolutionwas tocalculate"RVUequivalents." ThisinvolveddeflatingchargesbyaMedicareprevailingcharge •index(Popeetal. 1988)anddividingdeflatedchargesby$31,001,the 1992conversionfactor. About 14percentofthetotalphysicianchargesinBMADwereonbillsforwhichRVU equivalentshadtobeassigned. Statuscodes. TheMFSassignedeachHCPCScodeastatuscodetoindicatewhetherthe codeisinthefeescheduleandwhetheritisseparatelypayable. Mostexpendituresarefor HCPCScodesthathaveastatuscodeofeitherA(active)orV(visits). StatuscodesofTandZ representinjectionsandEKGs.andundertheMFSnopaymentismadeforsuchservicesifthey aredeliveredaspartofavisit. Hence,weassignedbillswithstatuscodesTandZzeroRVUs. StatuscodesC,D,E,andXindicatecodeswithoutRVUsbutwhichMedicarepaysfor(orpaid for). Asnotedabove,RVUequivalentswerecalculatedforthesecodes. Theremainingstatuscodesdidnotrequirespecialattention. StatuscodesBandPpertain toservicesthatarealwaysbundledintoanotherserviceandhence,havezeroRVUintheMFS. StatuscodeNpertainstononcoveredservices,whichhavezeroRVUintheMFS. Hence,status codesB.P,andNwereassignedzeroRVUs. Anesthesiaservices. Anesthesiaservicesinvolveseveralcomplexities: (1)theyhavebase andtimeunits.(2)theyaretechnicallynotpartoftheMFS;and(3),theirHCPCScodingwas changedin 1989. Ananesthesiafeein 1992isthesumofthebaseandtimeunits,multipliedby theanesthesiaconversionfactorof$13.94. EachanesthesiaHCPCScode'sbaseunit,which reflectsthecomplexityoftheprocedureisanalogoustoanRVU,andisprintedinAppendixAof theMedicareCarrierManual. Thetimeunitisthetimeactuallytakenbytheanesthesiologist. Eachtimeunitrepresents 15minutes. Thebaseandtimeunitsforeachbillweresummedtoobtaintotalunits. BecauseRVUs arenotdefinedforanesthesiaservices,wehadtocreateRVUequivalents. Thiswasdoneby g:\mm\6210\01repoawpt V1/933;04piD 5 multiplyingthetotalunitsby$13.94(theanesthesiaconversionfactor)toobtainthe 1992fee. Thisfeewasdividedby$31,001 (theMFSconversionfactor)toobtainRVUequivalents.* Modifiers. Besidestheprofessional-technicalmodifier,wemodeledseveralmodifiers: multiplesurgery,bilateralsurgery,assistanceatsurgery,andtwosurgeons. Forinstance,RVUs forbillsformultiplesurgeryweremultipliedby.75,becauseasecondsurgeryisreimbursedat 75percentoftheRVUs. Newmodifiersarenotonoldbillsandhencecannotbeadjustedfor. Limitations. AtleasttwoaspectsoftheMFSwerenotaddressed. TheMFSstandardized globalfeeperiods,usedtovarywidelyamongcarriers. Itwouldbedifficulttodeterminewhich serviceswerebilledseparatelybutnowwouldbeincludedinaglobalfee.inpartbecause carriersdidnotnecessarilyfollowtheirstatedrules. Norcanitbedeterminedwhichservices includedinaglobalfeewouldnowbebilledseparately. Unscramblingthisomeletteisnot possible. Luckily,anyimpactofchangesinglobalfeeperiodsispresumablygreateron outpatientphysicianservicesthaninpatientphysicianservices,thelatterbeingourfocus. Forspecifiedcodes.Medicarepaysmorewhentheserviceisdeliveredinanofficethana hospitaloutpatientdepartment. Thissite-of-servicedifferentialwasnotincorporatedintoour RVUassignmentalgorithms. Ouranalysisfocusedoninpatientphysiciansservices. Itisnot necessarytorecognizethesiie-of-servicedifferentialforthepurposeofassigningRVUsduring theinpatientstay. However,wealsoexaminedphysicianservicesprovidedduringwindows aroundthestayandfortheseservicesthesite-of-servicedifferentialcouldhavehadanalfecton theassignedRVU. SummingtotheAdmissionLevel. Atthispoint,eachadmissionwaslinkedtoits associatedphysicianbillsprovidedduringthestay(and28-daywindowsaroundthestay). Each physicianbillhastheRVUsassignedfortheservice. ThenextstepwastosumRVUstothe *AnesthesiaservicesdeliveredpriortoMarch 1989werecodedusingsurgicalcodes. Theseanesthesia serviceswereidentifiedusuigHCFA'stypeofserviceindicatorandcertainmodifiers,andRVUequivalentswere cinrea1t9e9d2.,wBeecdaiuvsiedeHdCaFneAstdheesciraeacsheadrgtehsebanye4st2h.e7s9ia(3c1o.n0v0e1r*s1i.o0n7*f1ac.t2o9r)biync7repaetricnegntRiVnU19e9q1uivaanldenatnso.ther29percent g:\inm\6210\01reportwpt 3/1«33:04pm 6 admissionlevel. Forexample,assumethatanadmissionbillwaslinkedtofourphysicianbills. SummingtotheadmissionlevelresultsinonerecordperadmissionwithtotalRVUsper admission.^ Atthispointthefilecontained447,594records,oneforeachadmission. Thisadmission-levelfilewasseparatelyaggregatedtotwolevels. Theadmissionfilewas aggregatedtotheDRG-level(i.e.,RVUsperadmissionbyDRG)forthepurposeofcalculating nationalweightsthatserveasthebasisofourcasemixmeasure. Inturn,ourcasemixmeasure allowedustocasemix-adjustRVUsperadmissionatthemedicalstaff-level(i.e.,hospital-level). Theadmissionfilewasthenaggregatedtothemedicalstaff-levelforthepurposesanalyzing variationsinRVUsperadmissionacrossmedicalstafftypes(i.e.,urban/rural). in. DEVELOPINGTHECASEMIXMEASURE Thefirststepindevelopingacasemixmeasurewastocomputephysicianserviceweights byDRG,whichrequiredtheassignmentofaDRGtoeachadmission. DRGswereassignedon thebasisofICD-9diagnosiscode. HCFA's"grouper"programusestheICD-9codesonagiven admissionbilltomakeaDRGassignment. BoththeICD-9codesandthegroupergothrough (usuallyminor)changeseveryyear. Ourdatawerefor1989andweusedtheFY89grouperto assignDRG.* WiththeassignmentofDRG,wewereabletocalculatemeanRVUsper admissionforeachDRGaswellasRVUsperadmissionforallDRGs(i.e.,alladmissions). Recallthatgiventhedesignofthedatabase,wewereabletocalculateRVUsperadmissionby DRGfordiestayonlyandthestaypluswindows(referredtoastheepisode). This,inturn, allowedustocalculateDRGweightsforthesetwovariants. 'NotethaiinadditiontototalRVUsperadmission,thefilecontainedRVUsperadmissionfor15type-of- servicecategories. Thatis,totalRVUsperadmissionweredisaggregatedinto15type-of-servicecategories(e.g., majorprocedures,advancedimaging). Anaggregationofthe23-categoryHolahanandBerensontype-of-service classificationwasused. FutureworkwillexploreRVUsperadmissionbytypeofservice. 'WehadhopedtousealaterversionoftheDRGgrouper~FY91,forexample. However,13DRGswere addedtothegrouperinFy91(e.g.,483uacheostomyexceptformouth,larynx,orpharynxdisorder). Inorder toassignaFY91DRG,bothacrosswalkbetweenFY89andFY91ICD-9codesaswellastheFy91 grouper werenecessary. Wefoundthatdocumentationandsoftwareenablingonetosystematically"u-ack"changesin theDRGgroupersandlCD-9classificationswerelacking. g:\iiini\6210\01report.wpt V1/933:04piii 7 TruncatingforOutliers. Asdevelopedinourpreviousreports,amedicalstaffpolicy mightincludeaPPS-likeoutlierpolicy.' Weconsideredanumberofoutlierdefinitions(e.g.,2 timestheDRGmean,thelesserof2timestheDRGmeanand$10,000). Anoutlierthresholdof 2.5timestheDRGmeanwasselected."* RVUsperadmissionwere"truncated"attheoutlier threshold. Thatis,iftheRVUsforagivenadmissionexceededtheoutlierthresholdforitsDRG, theRVUsweretruncatedattheoutlierthreshold. Truncatingattheoutlierthresholdallowedus toconstructrelativeweightswithandwithoutoutlierRVUs,inadditiontoweightsforthestay andepisode. Low-VolumeDRGs. Thenextstepwastocalculaterelativeweights,whichwas conceptuallyastraight-forwardprocess—RVUsperadmissionforeachDRGaredividedbyRVUs peradmissionforallDRGs(i.e.,thenationalmean)toobtainarelativeweight Sincethe nationalmeanwasadmissionweighted,theweightswerenormalizedto 1.0. However,forDRGswithsmallnumbersofadmissions(referredtoas"low-volume" DRGs),theestimationofareliablemeanisquestionable. Forexample,theSeptember4, 1990 FederalRegisterPPSfinalruleindicatesthatnationally33DRGshadfewerthan50admissions. TheseDRGsareusuallynotimportanttotheMedicarepopulation(manypertaintopregnancyor children). Sincerelativeweightswereusedtocalculatehospital-levelcasemixvalues,unreliable meanRVUsperadmissioncouldresultinalessdefensiblemeasureofcaseraix." Theproblem oflow-volumeDRGswascompoundedbyworkingwith5-percentsample. ADRGwith2,500 admi.ssionsnationallywouldhaveabout125admissionsinthe5-percentsample. (Thisfigure couldbeevenlowerasaresultofattritionresultingfromdatascreening.) Usingthe5-percent sampleafterdatascreening,wefoundthat141 DRGs(30percent)hadfewerthan 100 '"Diemotivationwouldbetoprotectmedicalstaffsfromtheimpactofafewhigh-costcasesandtoprotect accessforpotentiallycostlyMedicarepatients. '° Using1987deflatedchargesthisoutlierdefmitionresultedinanoutlierpoolofabout4percent. "Notethattheprecisionofthecasemixmeasurecanbecalculatedatthehospital-levelortheDRG-level. Because themedicalstaffpolicywould applytothehospital-level, precision atthatlevel was the greatest concern. Atthehospital-levelthelow-volumeDRGproblemshouldnotbegreat-atthisleveloverestimated DRGs should cancel out underestimated DRGs. Nonetheless, our correction for low-volume DRGs was performedbyattheDRG-level. g:\mm\6210\01repoawpt 3/1/933:04pin 8