When it was introduced in the Affordable Care Act of 2010 as the new 2012 payment model for Medicare, an accountable care organization (ACO) was a new and untested concept in healthcare delivery and payment. The authors estimated the likelihood of engagement in ACOs by small group and solo healthcare practitioners. An evaluation of five case studies showed that significant organizational, finan...

To help support implementation of aligning clinical redesign with payment reforms in practices and institutions throughout the country, we present two cases from Duke University Health System ("Duke") and University of Colorado Hospital ("Colorado"). The studies provide practical solutions for not only implementing clinical redesign, but also an understanding of how those clinical innovations c...

In this article, a payment model is developed for a hospital system with both acute- and chronic-stay psychiatric patients. "Transition pricing" provides a balance between the incentives of an episode-based system and the necessity of per diem long-term payments. Payment is dependent on two new psychiatric resident classification systems for short- and long-term stays. Data on per diem cost of ...

Policymakers hoped to substitute a new, multi-purpose, functional assessment instrument, the minimum data set post-acute care (MDS-PAC), into the planned prospective payment system (PPS) for inpatient rehabilitation hospitals. PPS design requires a large database linking treatment costs with measures of the need for care, so the PPS was designed using the functional independence measure (FIM) d...

South Carolina Medicaid implemented prospective payment by diagnosis-related group (DRG) for inpatient care. The rate of complications among newborns and deliveries doubled immediately. The case-mix index for newborns increased 66.6 percent, which increased the total Medicaid hospital expenditure 5.5 percent. Outlier payments increased total expenditure further. DRG distribution change among ne...

Strong interest by Congress in a Medicare prospective payment system for skilled nursing facilities (SNF's) resulted in a major study by the Health Care Financing Administration on the Medicare SNF benefit. This article highlights findings from that study, which addressed the following: the Medicare SNF benefit, utilization and expenditures, the Medicare SNF industry, problems with the current ...

Medicare's use of diagnosis-related groups (DRGs) and the resource-based relative value scale (RBRVS) has led to interest in developing a national all-payer system in which insurers use the same payment methods and payment rates. Using data for 81 high-volume DRGs from 457 California hospitals, we conclude that a single set of rates for hospital care would not be appropriate. On average, Medica...

The Physician Payment Review Commission has examined the potential of profiling physician practice patPR. Lee and A.B. Bindman, Institute for Healty Policy Studies, University of California, San Francisco. P.R. Lee, D.W. Shapiro and R.D. Lasker, Physician Payment Review Commission. A.B. Bindman, Division of General Internal Medicine, San Francisco General Hospital. terns within the context oi c...

Concern over rapidly rising Medicare expenditures prompted Congress to pass the 1997 Balanced Budget Act (BBA) that included provisions reducing graduate medical education (GME) payments and capped the growth in residents for payment purposes. Using Medicare cost reports through 2001, we find that both actual and capped residents continued to grow post-BBA. While teaching hospital total margins...

KEY FINDINGS Data from the National Hospital Ambulatory Medical Care Survey, 2012 •In 2012, 33% of emergency department (ED) visits in the United States made by adults aged 18-64 had private insurance as the expected source of payment. This percentage was lower for Illinois than for the total United States. •In 2012, 21% of ED visits made by adults aged 18-64 had Medicaid as the expected source...