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The American Journal of Accountable Care March 2019
Safety Net Representation in Federal Payment and Care Delivery Reform Initiatives
J. Mac McCullough, PhD, MPH; Natasha Coult, MS; Michael Genau, MS; Ajay Raikhelkar, MS; Kailey Love, MBA, MS; and William Riley, PhD
ACO Use of Case Mix Index to Comprehensively Evaluate Postacute Care Partners
Mark E. Lewis, MPH; and Avery M. Day, MPH
Improvement of Outpatient Quality Metrics in a Limited-Resource Setting
Carolina dos Santos, BA; Torkom Garabedian, MD; Maria D. Hunt, LPN; Schawan Kunupakaphun, MS; and Pracha Eamranond, MD, MPH
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Improved Cost and Utilization Among Medicare Beneficiaries Dispositioned From the ED to Receive Home Health Care Compared With Inpatient Hospitalization
James Howard, MD; Tyler Kent, BS; Amy R. Stuck, PhD, RN; Christopher Crowley, PhD; and Feng Zeng, PhD
Making Sense of Changes in Healthcare: Lessons From the AcademyHealth National Health Policy Conference
Jaime Rosenberg

Improved Cost and Utilization Among Medicare Beneficiaries Dispositioned From the ED to Receive Home Health Care Compared With Inpatient Hospitalization

James Howard, MD; Tyler Kent, BS; Amy R. Stuck, PhD, RN; Christopher Crowley, PhD; and Feng Zeng, PhD
A retrospective analysis of Medicare claims was used to study emergency department (ED) dispositions, specifically evaluating inpatient admissions compared with home health referrals.

Objectives: As the shift from volume to value in healthcare expands, efforts to develop alternatives to hospitalization are gaining momentum. This study explores home health care initiated directly from the emergency department (ED) using the Medicare-reimbursed home health benefit as a potential alternative to hospitalization. We address barriers to home-based care by comparing costs and utilization of care for older adults dispositioned to home health care versus hospital admission.

Study Design: We conducted a retrospective institutional and carrier claims analysis of 5% of total Medicare fee-for-service beneficiaries from January 2012 through December 2013 using 2 cohorts: patients treated in the hospital following an ED visit (inpatient) and patients treated at home following an ED visit (home health). Patients had 1 of the following: congestive heart failure, chronic obstructive pulmonary disease, urinary tract infection, pneumonia, or cellulitis.

Methods: Propensity score–weighted regression was used to measure the total cost of care for 90 days post index visit, hospital admissions/readmissions, and ED revisits.

Results: Total 90-day costs were lower for the home health cohort than for the inpatient cohort ($13,012 vs $20,325; P <.0001). The home health cohort also had lower hospital admissions/readmissions (23.7% vs 33.0%; odds ratio, 1.535; P <.0001) compared with the inpatient cohort. Although the home health cohort had fewer ED revisits, the difference was not statistically significant.

Conclusions: The findings suggest that risk-bearing healthcare organizations could use home-based alternatives to hospital admission as a means of providing high-quality care at a lower cost.

The American Journal of Accountable Care. 2019;7(1):10-16
Healthcare spending in the United States exceeded $3.3 trillion in 2016, which translates into an average of $10,348 per capita annually.1 Despite some slowing in growth in 2016, experts still predict an unsustainable spending trajectory.2 Of total healthcare spending, hospital-based care accounts for the largest percentage at 32%, or $1.056 trillion. In 2016, hospital costs increased by 4.6%, which, although 1% slower than the growth in 2015,3 is still unsustainable. Because of this unsustainable growth in healthcare costs and poor value for the amount we spend, major efforts are underway nationally to shift Medicare from a volume-based system to a value-based system. Due to the high cost of hospitalization, alternatives to hospital admission have become a focal point of that shift.

Providing hospital-level care at home as an alternative to hospitalization is showing promising results in value-based care and may become a significant asset to a chronic care model in a senior service line portfolio.4 A growing body of evidence suggests that providing higher-intensity acute care in the home achieves the quadruple aim of improving population health, lowering costs, and improving patient and provider experience.5-15 This particular type of hospital-level care at home has demonstrated significantly better outcomes for selected patients compared with standard inpatient hospitalization, including comparable mortality,5,6 improved mortality,6,7 similar readmissions,7 decreased readmissions,8 decreased length of stay (LOS),7,9,10 significant cost reduction,6-11 improved functional recovery,12,13 overall positive provider evaluations,12 lower levels of family member stress,14 and increased patient satisfaction.6,7,15 In late 2017, the Physician-Focused Payment Technical Advisory Committee recommended that the secretary of HHS implement the hospital-at-home model as an advanced payment model.16

Despite evidence that home-based acute care models are cost-effective and safe, the scaling and sustainability of these models has been limited by the historical lack of payment reimbursements by Medicare parts A and B.17 The objective of this paper is to address this issue by investigating the potential for Medicare cost savings and reductions in utilization when providing home-based acute care. This study is unique in that it explores the implications of using the Medicare home health benefit to pay for the delivery of needed care after an emergency department (ED) visit, as opposed to the typical stand-alone hospital substitute model described in the literature. We compare the costs and utilization for seniors transitioned from the ED to home health care versus admission to the hospital from the ED. Data were analyzed to explore (1) whether care delivered in the home following an ED visit has lower costs than that delivered in a hospital and (2) whether ED and hospital utilization are reduced in the 90 days following an episode of care for similar patients. Answers to these 2 questions have important implications for policy makers and the medical community, as adoption of acute home-based care innovations is currently limited in the United States.


We conducted a retrospective analysis of 5% of Medicare claims data using carrier and institutional claims from January 2012 through December 2013. Patients included in the analysis were 65 years or older and had visits originating in the ED with a principal diagnosis, identified by Clinical Classifications Software (CCS) groupings, of congestive heart failure (CHF), pneumonia, urinary tract infection (UTI), chronic obstructive pulmonary disease (COPD), or cellulitis. Patients with end-stage renal disease (ESRD) and metastatic cancer were excluded. Patients needed to be enrolled in Medicare fee-for-service (FFS) continuously as age-eligible beneficiaries for 6 months before the index ED visit and 3 months after ED or hospital discharge.

To answer our research questions, we constructed 2 cohorts: (1) patients admitted to hospitals from the ED (inpatient cohort) and (2) patients dispositioned from the ED to home health care (home health cohort). Table 1 shows how we created these cohorts and indexed the visits. For the inpatient cohort, the index episode of care was defined as the hospital stay. For the home health cohort, the index episode of care was defined as the home health stay.

To construct an inpatient cohort comparable with the home health cohort in terms of the potential to be dispositioned to care in the home, we selected patients with diagnosis-related groups (DRGs) with and without comorbidities or complications (CCs) but without major comorbidities or complications (MCCs). The following DRG codes were included: 292, heart failure and shock with CCs; 293, heart failure and shock without CCs/MCCs; 194, simple pneumonia and pleurisy with CCs; 195, simple pneumonia and pleurisy without CCs/MCCs; 690, kidney and urinary tract infections without MCCs; 191, COPD with CCs; 192, COPD without CCs/MCCs; and 603, cellulitis without MCCs.

Patients in the inpatient cohort also needed to have a LOS of fewer than 4 days. Additionally, inpatient cohort designees could not have a procedure code that may have required an overnight stay.

To generate a list of codes representing events that normally would require an overnight hospital stay, we first tabulated all International Classification of Diseases, Ninth Revision (ICD-9) procedure codes, revenue center codes, and Healthcare Common Procedure Coding System (HCPCS) codes associated with hospitalizations for CHF, pneumonia, UTI, COPD, and cellulitis. Then, 2 healthcare practitioners, an emergency physician and a critical care nurse (J.H. and A.R.S.), each with clinical and research experience, independently examined these codes to identify procedures that conservatively would require a hospital overnight stay. Their resulting list of exclusion codes were then presented to a second emergency physician, not connected to the research team, for review. A final list was developed by these 3 clinicians based on discussion and consensus. A complete list of exclusion codes is listed in the eAppendix (available at

Patients assigned to the home health cohort were those transitioned directly to home health care following an ED visit. To be included in this cohort, patients needed to have a visit by a home health provider within 2 days of an ED visit with CHF, pneumonia, UTI, COPD, or cellulitis as the principal diagnosis by CCS grouping in both the ED and the home health claims. The 2-day limit was imposed to ensure that only home health visits immediately after ED visits were included and no other claims from other providers were processed. To ensure that the 2 cohorts were comparable, we applied the same exclusion criteria to the home health cohort as we applied to the inpatient cohort, including procedure codes, revenue center codes, and HCPCS codes, and exclusion of any patient with metastatic cancer or Medicare eligibility due to ESRD.

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