The Essential Scan: Top Findings in Health Policy Research | Edition 82

What’s the latest in health policy research? The Essential Scan aims to help keep you informed on the latest research and what it means for policymakers. It is produced by the USC-Brookings Schaeffer Initiative for Health Policy, a collaboration between the Brookings Institution and the USC Schaeffer Center for Health Policy & Economics. To sign up to receive the Essential Scan straight to your inbox, sign up here.

Prevalence and Characteristics of Surprise Out-of-Network Bills from Professionals in Ambulatory Surgery Centers

Study by: Erin L. Duffy, Loren Adler, Paul B. Ginsburg, and Erin Trish

Several studies have reported the prevalence of surprise billing in emergency departments and inpatient settings recently. A new study documents the prevalence in ambulatory surgery centers (ASCs) and the extent to which health plans pay a portion or all of the provider bills who are out-of-network in these situations. The researchers estimate one-in-ten ASC episodes involve out-of-network providers at in-network facilities. In almost a quarter of these cases, insurers paid providers the full billed charges, a finding that could have significant implications for overall healthcare spending. After accounting for insurer payments, one-in-twelve patients were at risk of receiving a surprise bill, the magnitude of which grew significantly from 2014-2017, from an average of $819 in 2014 to $1483 in 2017. The number of ASC facilities and the volume of services provided have increased significantly over the past 30 years, making them an increasingly important part of the discussion around how to solve surprise medical bills. Full study here.

Upcoding: Evidence from Medicare on Squishy Risk Adjustment

Study by: Michael Geruso and Timothy Layton

As Medicare Advantage (MA) becomes increasingly important in the Medicare program, a lot more is at stake concerning how effective the program’s risk adjustment approach is. Health insurance plans in the MA program face strong incentives to induce their network physicians to upcode patient diagnoses on claims they file, as these affect the risk-adjusted payments the plans receive from Medicare. A new study investigates upcoding in these types of plans. Researchers find that enrollees in these private Medicare plans generate between 6-16 percent higher diagnosis-backed risk scores than they would under traditional fee-for-service Medicare, implying significant overpayments to private insurers at the cost of taxpayers. The authors suggest applying one coding deflation factor to plan-reported diagnoses and a separate deflation factor to the demographic components of the risk score that originate from administrative data, such as age, sex, and disability status. They note that Medicare has applied coding deflation for some time, although it is not large enough. However, the authors note that even with significant reform it may be impossible to achieve perfect parity of risk coding between the Medicare Advantage and the traditional fee-for-service market segments. Full study here.

National Health Expenditure Projections, 2019-28: Expected Rebound in Prices Drives Rising Spending Growth

Study by: Sean P. Keehan, Gigi A. Cuckler, John A. Poisal, et al.

Over the past several decades health spending growth has outpaced the rest of the economy. National health spending accounted for 17.7 percent of GDP in 2018 and is only expected to increase from there. A new analysis looks at national health expenditure projections for 2019 to 2028. It finds health spending is expected to grow more rapidly in the economy in each year of the projection period, at an annual rate of 5.4 percent per year to reach 19.7 percent of GDP in 2028. Almost half of this will be due to price growth for medical goods and services, reflecting faster growth in health sector wages than in recent years. Medicare is expected to have the highest spending growth among insurers each year due to the baby-boom generation’s shift into Medicare eligibility. In total, governments are projected to be responsible for nearly half of the nation’s total health bill by 2028. The proportion of the population with insurance is projected to fall from 90.6 percent in 2018 to 89.4 percent in 2028. As health spending continues to encompass a greater share of the national GDP, policymakers may want to consider cost-saving measures, particularly in the Medicare program, which stands to see the highest spending growth. Full projection here.

The Effects of State Scope of Practice Laws on the Labor Supply of Advanced Practice Registered Nurses

Study by: Sara Markowitz and E. Kathleen Adams

Advanced practice registered nurses (APRNs) consist of nurses who are trained to perform many of the same tasks as certain types of physicians. The labor markets for APRNs are shaped by two policies: licensing requirements prior to entry and scope of practice laws post-entry. Scope of practice (SOP) laws are the legal authority given to health care providers to provide medical services. These laws vary by state in restrictiveness: In some states APRNs are required to practice and prescribe under physician oversight, while other states have moved to full practice authority, where APRNs practice without any legal requirements for a formal relationship with physicians. A new study analyzes the effects of changes in states’ SOP for APRNs on individual labor supply decisions. It finds that the level of SOP restrictions are not strong determinants of many labor market decisions for APRNs. There were no effects of the different levels of restrictiveness in the SOP laws in determining the probability of part-time work, holding multiple jobs, or moving to a different state for work. And the probability of nursing employment did not seem to be very responsive to changes in SOP laws. Researchers did find that weekly hours of work were higher in full practice authority states and APRNs in full practice authority states were 6-17 percentage points more likely to be self-employed. While SOP laws influenced the rate of self-employment for APRNs, they seemed to have little effect in the overall role they play in delivering care. The authors conclude that labor market effects are only one aspect of the SOP debate, and policymakers should consider further effects on health outcomes, access to care, and costs. providers. Full study here.

How Increasing Medical Access to Opioids Contributes to the Opioid Epidemic: Evidence from Medicare Part D

Study by: David Powell, Rosalie Liccardo Pacula, and Erin Taylor

Opioid drug overdoses have increased dramatically in the past two decades. A new study focuses on the impact of the rise on opioid supply as a driving factor in the increase in overdoses. The researchers leverage the roll out of Medicare Part D, the prescription drug benefit available to Medicare beneficiaries that was implemented in 2006, to study the spillovers of increasing opioid supply on the population under age 65 that did not gain additional access. They find that a 10 percent increase in access to medically-prescribed opioids leads to a 7 percent increase in opioid-related deaths in the non-Medicare population. It also led to a 9.6 percent increase in opioid-involved treatment admissions among the population under 65 years of age. Extrapolating the results to the full 2000-2011 time period, the researchers conclude that diversion of medically prescribed opioids to other individuals played a key role in the opioid crisis. They estimate that almost three quarters of the growth in opioid-related overdose deaths can be attributed to spillovers resulting from increased medical access. Full study here.

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The Essential Scan is produced by the USC-Brookings Schaeffer Initiative for Health Policy, a collaboration between the Brookings Institution and the USC Schaeffer Center for Health Policy & Economics.