Reimbursement Reform Successfully Reduced Preventable Conditions

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Researchers at Stanford University found that when CMS stopped paying for 2 preventable, hospital-acquired conditions in particular, the incidence of the conditions dropped 35% in the Medicare population.

Efforts to reduce preventable, hospital-acquired conditions have been working. At the beginning of December, HHS released a report that found these adverse events had decreased by 17% over 3 years, and CMS recently announced that more than 700 hospitals would be penalized because of their poor performance with hospital-acquired conditions.

Researchers at Stanford University have found that when CMS stopped paying the additional cost of treating the preventable, hospital-acquired conditions pulmonary embolism and deep-vein thrombosis, the incidence of these conditions after hip or knee replacement surgery dropped 35% in the Medicare population.


“We have a win-win. We have patients who are avoiding adverse events while Medicare saves money,” lead author Risha Gidwani, DrPH, a consulting assistant professor of medicine at Stanford and a health economist at the Veterans Affairs Health Economics Resource Center in Menlo Park, said in a statement.

While they did find that the incidence of these 2 conditions increased among the younger, non-Medicare population, they did decrease among patients older than age 65 who had private insurers.

The authors examined records from 2007-2006 from a national database of hospital discharges and compared Medicare patients ages 65-69 years who received hip or knee replacements with non-Medicare patients ages 60-64 who also received these procedures.

Overall, the reimbursement reform worked, according to Gidwani, who said the results of the study are important for payers considering expanding value-based purchasing programs.

“It may seem obvious that Medicare should use payment incentives for providers to encourage better and more appropriate care for patients, but there is always a risk of unintended consequences when Medicare cuts payments for services,” Jay Bhattacharya, MD, PhD, professor of medicine and director of the Stanford Program on Medical Outcomes and co-author, said. “In this case, we have found evidence that Medicare’s refusal to pay for complications arising from hip and knee surgeries really did reduce the incidence of those complications.”