Outpatient Departments Care for Sicker & Poorer Patients than Physician Offices

Patients treated for nonemergency services in hospital outpatient departments (HOPDs) are sicker and more likely to be from low income areas compared to patients receiving the same care in physician offices, according to a study prepared for the American Hospital Association by KNG Health Consulting, LLC. The study examined the differences in the two types of care facilities so that Medicare payment reforms can be more accurately developed in light of the different kinds of care challenges that HOPDs and physician offices face.


The study was designed to evaluate the differences between the patients served and the care provided for nonemergency services in HOPDs and physician offices because of proposed changes to Medicare payments that would cap payments to HOPDs for nonemergency services at the rate paid to physicians. The study specifically evaluated differences in patient populations between the two different types of facilities and the variance in the facilities’ care. The study evaluated differences in reasons for visits and the services, treatments, and medications ordered or provided. To conduct the study, KNG looked at the National Ambulatory Medical Care Survey (NAMCS) from 2008 to 2010 and the National Hospital Ambulatory Medical Care Survey (NHAMCS) from the same date range. The data analysis also included an evaluation of the 2012 Standard Analytical File of a 5 percent sample of Medicare beneficiaries.


Among the studies key findings were that patients in HOPDs were: 1.7 times more likely to be Black or Hispanic; 2.5 times more likely to rely on Medicaid, self-pay or charity care; 1.7 times more likely to live in a low-income area; 1.5 times more likely to live in a low-education areas; more likely to be burdened by more chronic conditions; and more likely to be hospitalized prior to receiving ambulatory care. Additionally, in terms of the differences in the care itself, when compared to physician offices, nonemergency care in HOPDs was: more likely to be delivered to a new patient, 1.2 times more likely to be for the receipt of treatment, more likely to include the ordering of additional treatment or services, and more likely to include the care of a nurse.

Room for Improvement in Hospital Maternity Care

Rates of early induction of labor have declined in U.S. acute care and pediatric hospitals, but rates of episiotomies  remain unacceptably high in many hospitals, according to a 2014 survey released by the Leapfrog Group and developed by Castlight Health.  The survey results also reflected little change in the number of hospitals meeting Leapfrog’s standards for high-risk deliveries since 2013.  The American Congress of Obstetricians and Gynecologists (ACOG) has long advised limiting both elective inductions prior to 39 weeks’ gestation and the use of episiotomies.  Leapfrog has made suggestions for improvement to hospitals, and existing CMS programs seem to support the advice as far  as inductions are concerned.

Elective Inductions

Definitions of “full term” range from 39 weeks’ gestation to 40 weeks and six days.  However, according to Leapfrog, rates of elective inductions, those with no medical basis, prior to 39 weeks, increased from 9.5 percent in 1990 to 32.9 percent in 2009.  Providers and patients may choose early inductions for nonmedical reasons le convenience, perceived liability, or relief of pregnancy symptoms.  However, infants born at 36 to 38 weeks are more likely than full-term infants to have lung problems and other medical issues, often requiring treatment in the neonatal intensive care unit (NICU).  Long-term effects on academic achievement resulting from preterm birth may also be seen.  Mothers whose labor is induced are more likely to undergo cesarean sections (C-sections) than women who are not induced, and they may be at higher risk of other postpartum complications.  In addition, Leapfrog cited a study finding that the early deliveries cost up to 17.4 percent more than full term early deliveries.  If early term delivery were reduced to 1.7 percent, the report suggests, the U.S. could  save $1 billion annually, much of which results from a reduction in days spent in the NICU.

Leapfrog has defined its standard for early elective deliveries as a rate of scheduled C-sections or inductions before 39 weeks no greater than 5 percent.  In 2010, only 30 percent of hospitals responding to the survey met the standard.  The rate increased  over time, to 71 percent in 2013 and 78 percent in 2014.  The numbers are positive; however, significant variation exists among hospitals, with 17 hospitals reporting early elective delivery rates of 30 percent or more.

Recognizing the dangers of elective inductions, and perhaps the financial costs associated with them, CMS launched  the Strong Start for Mothers and Newborns initiative in  2012, which promotes awareness, spreads best practices, and promotes transparency.  In an August 2012 final rule, CMS added a measure to the Inpatient Quality Reporting (IQR) Program that is effective for fiscal year (FY) 2015: Elective delivery prior to 39 completed weeks of gestation, which will link quality of care with payment.  In December 2013, the agency updated its Hospital Compare website to include voluntary reports of the measure. CMS also created the Expert Panel on Improving Maternal and Infant Health Outcomes in Medicaid and CHIP to explore opportunities that could not only result in better care and outcomes, but reduce the cost of care for mothers and infants enrolled in Medicaid and the Children’s Health Insurance Program. The recommendations, in part, led to the creation of the Maternal and Infant Health Initiative.


Episiotomies are incisions made in the perineum–the area between the vagina and the anus–during childbirth.  The procedure was formerly a routine part of childbirth intended to prevent worse tears of the perineum.  However, they have been linked to worse tears, bladder and fecal incontinence, pelvic floor defects, and painful recoveries.  The Mayo Clinic notes that episiotomies may be warranted in certain cases, such as when a physician anticipates “extensive vaginal tearing,” the baby is an abnormal position, or the baby needs to be delivered quickly. Leapfrog’s standard rate for episiotomies is less than or equal to 12 percent. Sixty-five percent of reporting hospitals achieved the standard in 2014 and the national average was 11.3 percent, down less than two percentage points from 2012. However, dramatic variations were seen.  Twenty-five hospitals reported rates of less than or equal to 1 percent, but 12 reported rates of 40 percent or greater. To further encourage a decrease in episiotomies, Leapfrog plans to lower its standard from less than or equal to 12 percent to less than or equal to 5 percent; only 27 percent of hospitals reporting in the 2014 survey would meet that standard.

High-Risk Deliveries

Infants who weigh less than 3 pounds, 4.91 ounces should be cared for in a NICU.  They have a higher likelihood of survival and better prognoses when they are born at hospitals with experienced, on-site NICUs. Leapfrog deems hospitals to meet standards for high-risk deliveries if they ensure that at least 80 percent of mothers receive antenatal steroids prior to delivery, which can reduce the incidence and severity of respiratory distress syndrome (RDS) in infants, as other well as other issues, including mortality; and either (1) deliver at least 50 “very low” birth weight babies each year or (2) maintain a lower than average morbidity/mortality rate for very low birth weight babies. In 2014, 24.4 percent of reporting hospitals met this standard, which is only an increase of 0.4 percent since 2013, although some hospitals are making “substantial progress.”  Hospitals in 24 states reported on this standard.  Strikingly, no hospitals in Georgia, Missouri, or South Carolina met Leapfrog’s high-risk delivery standard; only 4 percent of hospitals  reporting from New York met the standard.

Looking Forward

While the survey results reflect improvement, there is clearly room for improvement.  In addition, variations among suggest that standards are not being consistently achieved across hospitals.  Leapfrog will continue to assess hospitals’ compliance with its maternity standards and report again in 2016.

Kusserow on Compliance: CMS Proposed Payment and Policy Updates for Managed Care and Drug Plans

CMS has released proposed policy and payment updates to the Medicare Advantage (MA) and Part D Prescription Drug Programs that will further move the Medicare program toward paying providers based on the quality of patient care rather than quantity of care. Significant proposed changes include:

  • Refining the Medicare Advantage star rating system to encourage improved quality by modifying the system to prevent penalization of plans for enrolling dual eligible or low-income beneficiaries; and enhancing the in-home assessment value to support care planning and coordination.
  • Increasing beneficiary access to providers by ensuring MA plans maintain and make available accurate provider directories.
  • Changes in the Advance Rate Notice expected to affect MA plan growth positively by 1.05 percent.

CMS is proposing only minor adjustments to MA and Part D plan payment and policies for 2016. Some individual plans will be more impacted than others by the new payment rates based on their location and enrollee mix. The most significant would likely be felt by Part D beneficiaries, as the Advance Notice highlights increased drug expenses, signaling that Part D premiums will likely be on the rise for the coming plan year. CMS projects a 1.7 percent increase in county benchmarks offset by a 0.9 percent national average reduction due to the continued phase-in of the new methodology for MA benchmarks established in the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The effects of the reduction could be much more significant (reductions of up to 4 to 5 percent) for plans in counties subject to the six-year phase-in of the ACA methodology.

Comments on the proposed Advance Notice and draft Call Letter must be submitted by 6:00 PM Eastern Standard Time on March 6, 2015. Comments may be submitted electronically to AdvanceNotice2016@cms.hhs.gov. The 2016 Final Rate Announcement and Call Letter will be published on April 6, 2015.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2015 Strategic Management Services, LLC. Published with permission.

HHS Praises ACA, Donut Hole Shrinks, and Preventive Care Use Rises

Over 9 million Medicare beneficiaries have saved over $15 billion on prescription drugs since the passage of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). According to an HHS press release, beneficiaries have saved an average of $1,598 since the passage of the health care law. In the announcement, HHS Secretary Sylvia M. Burwell said that “by providing access to affordable prescription drugs and preventive services with no cost sharing, the Affordable Care Act is working for seniors to help keep them healthier.”

Prescription Drugs

According to HHS, in 2014 alone, 5.1 million seniors and people with disabilities saved a total of $4.8 billion on prescription drugs. The savings to the average beneficiary in 2014 amounted to $941. The figures are higher than they were in 2013, when 4.3 million beneficiaries saved a total of $3.9 billion at an average savings of $911 per beneficiary. The savings are a result of the ACA’s gradual closing of the coverage gap—known as the donut hole—where beneficiaries are forced to pay the full cost of prescriptions out of pocket before catastrophic coverage takes effect. HHS indicates that the donut hole is projected to be closed in 2020, marking 2015 as the halfway point. Under the ACA, in 2015, people with Medicare Part D who are in the donut hole will “receive discounts and savings of 55 percent on the cost of brand name drugs and 35 percent on the cost of generic drugs.”

Preventive Care

The HHS release also celebrated the success of preventive services under the ACA, with 39 million Medicare beneficiaries taking advantage of at least one preventative service with no cost sharing in 2014. Additionally in 2014, almost 4.8 million Medicare beneficiaries took advantage of the Annual Wellness Exam. These numbers represent considerable increases from 2013, when 37.2 million Medicare beneficiaries took advantage of at least one preventative service with no cost sharing and just over 4 million took the Annual Wellness Exam.