Academic journal article Health Care Financing Review

Clinician Feedback on Using Episode Groupers with Medicare Claims Data

Academic journal article Health Care Financing Review

Clinician Feedback on Using Episode Groupers with Medicare Claims Data

Article excerpt


Policymakers have expressed concerns that the current Medicare payment system includes incentives that encourage physicians to overuse some services and underuse others; pays physicians for care irrespective of their level of resource use; and offers higher revenues to physicians who furnish more services, regardless of whether they add value (Medicare Payment Advisory Commission, 2005). To remedy these concerns, the concept of value based purchasing (VBP) has been introduced into the policy arena. The goal of a VBP program is to find ways to reward physicians financially for providing efficient use of resources and services that are of high quality. The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) requires the Department of Health and Human Services (DHHS) to develop a plan that will transition Medicare payments into a VBP program for physician and other professional services that is based on efficiency and the quality of services provided. The Act also requires the DHHS to disseminate informational reports to physicians using episode groupers and/or per capita measures.

CMS has been investigating techniques that can help identify higher cost practice patterns. One technique is to compare resource use at the episode of care level. Episodes of care represent a group of healthcare services (claims) for a health condition (e.g., hip fracture, diabetes) over a defined length of time for which a physician can be responsible. The Medicare Payment Advisory Commission (MedPAC) has argued that compared with traditional population-based metrics, episode measurement could:

* Allow the attribution of care to individual physicians;

* Avoid focusing on a narrow set of utilization measures at the expense of others;

* Help identify specific changes in practice that can improve cost efficiency relative to peers; and

* Provide better accounting for differences in inpatient health status (Medicare Payment Advisory Commission, 2005).

Existing episode groupers are proprietary software programs that organize an individual's claims into clinical episodes of care. In its March 2007 report, MedPAC stated that "episode groupers can be used with Medicare data." After 2 years of study with Medicare claims data, MedPAC concluded that episode groupers have face validity from a clinical perspective, can identify practice patterns, and have risk adjustment capabilities that can account for differences in disease severity and the presence of comorbidities (Medicare Payment Advisory Commission, 2007).

While existing episode groupers have been developed for and used in private sector health plans and insurers as management tools, these grouping software programs have never been used in fee-for-service Medicare. As a result, Acumen, LLC under contract to CMS began studying episode groupers using 2006 Medicare claims data. Acumen produced two publicly available reports: one on the functionality of the two commercially available groupers, and the other on issues in using grouped episodes to create resource utilization reports. (1) These studies use quantitative analysis to explore how the episode groupers work with Medicare claims data.

This study focuses on the major design issues that should be addressed if episode grouping software is to be used with Medicare claims data. Eight panels, which in aggregate consisted of approximately 80 clinicians, were asked to respond to a series of episode grouping issues, which were identified after studying Medicare claims data that had been grouped with two commercially available software products. The panels were not asked to determine the most appropriate commercial episode grouper for Medicare claims, but to discuss design issues that must be considered in developing episodes in a value based purchasing context regardless of the episode grouping software used.


Episode groupers are proprietary software programs that organize claims data into a set of clinically coherent episodes, usually linked by diagnosis. …

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