Drivers of Payment Variation in 90-Day Coronary Artery Bypass Grafting Episodes

Abstract

Importance: Coronary artery bypass grafting (CABG) is scheduled to become a mandatory Medicare bundled payment program in January 2018. A contemporary understanding of 90-day CABG episode payments and their drivers is necessary to inform health policy, hospital strategy, and clinical quality improvement activities. Furthermore, insight into current CABG payments and their variation is important for understanding the potential effects of bundled payment models in cardiac care.

Objective: To examine CABG payment variation and its drivers.

Design, setting, and participants: This retrospective cohort study used Medicare and private payer claims to identify patients who underwent nonemergent CABG surgery from January 1, 2012, through October 31, 2015. Ninety-day price-standardized, risk-adjusted, total episode payments were calculated for each patient, and hospitals were divided into quartiles based on the mean total episode payments of their patients. Payments were then subdivided into 4 components (index hospitalization, professional, postacute care, and readmission payments) and compared across hospital quartiles. Seventy-six hospitals in Michigan representing a diverse set of geographies and practice environments were included.

Main outcomes and measures: Ninety-day CABG episode payments.

Results: A total of 5910 patients undergoing nonemergent CABG surgery were identified at 33 of the 76 hospitals; of these, 4344 (73.5%) were men and mean (SD) age was 68.0 (9.3) years. At the patient level, risk-adjusted, 90-day total episode payments for CABG varied from $11 723 to $356 850. At the hospital level, the highest payment quartile of hospitals had a mean total episode payment of $54 399 compared with $45 487 for the lowest payment quartile (16.4% difference, P < .001). The highest payment quartile hospitals compared with the lowest payment quartile hospitals had 14.6% higher index hospitalization payments ($34 992 vs $30 531, P < .001), 33.9% higher professional payments ($8060 vs $6021, P < .001), 29.6% higher postacute care payments ($7663 vs $5912, P < .001), and 35.1% higher readmission payments ($3576 vs $2646, P = .06). The drivers of this variation are diagnosis related group distribution, increased inpatient evaluation and management services, higher utilization of inpatient rehabilitation, and patients with multiple readmissions.

Conclusions and relevance: Wide variation exists in 90-day CABG episode payments for Medicare and private payer patients in Michigan. Hospitals and clinicians entering bundled payment programs for CABG should work to understand local sources of variation, with a focus on patients with multiple readmissions, inpatient evaluation and management services, and postdischarge outpatient rehabilitation care.

Figure 1.. Hospital Ranking by Mean 90-Day Coronary Artery Bypass Grafting Total Episode Payment

Hospitals ranked from lowest to highest by mean risk-adjusted total episode payment. Mean total episode payment was $48 571. Error bars indicate SEs.

Figure 2.. Breakdown of Total Episode Payment Components by Hospital Quartile

Payment variation between the highest and lowest quartiles for all payment components.