Hospital patients with severe wounds: early evidence on the impact of Medicare payment changes on treatment patterns and outcomes

Aims: This study examines the effects of recent changes in Medicare long-term care hospital (LTCH) payments on treatment patterns and outcomes for severe wound patients discharged from short-term acute care hospitals (STACHs).

Materials and methods: The rolling implementation of a new Medicare payment policy was used to develop a difference-in-difference model. The study population consisted of Medicare beneficiaries subjected to the payment policy changes and hospitalized for stage 3, 4, or unstageable wounds; non-healing surgical wounds; and fistula. Using 2015-Q1-2017 Medicare claims data, changes in outcomes were examined for severe wound patients exposed to the new policy (treatment) and those that were not (comparison). All outcomes were modeled using linear regressions and adjusted for patient clinical characteristics. Analysis was conducted in a full sample and a sample with high-LTCH-use propensity.

Results: Severe wound patients exposed to the new policy experienced 4.1 and 7.5 percentage point (pp) reductions in LTCH use relative to the comparison group in the full sample and high-LTCH-propensity sample, respectively (p?p?=?.039). No statistically significant change was found in 60-day mortality or Medicare spending after the policy change in the treatment group as compared to the comparison group (p?>?.10). However, among severe wound patients who are exposed to the new policy in the high-LTCH-propensity sample, readmission and post-discharge sepsis rates increased after the policy change relative to the comparison group (readmission rate = 8.1 pp, p?=?.075; sepsis rate = 7.0 pp, p?=?.033).

Limitations: The findings are based on data from a limited timeframe around the policy change and, thus, provide only early evidence on the effects of the new policy.

Conclusion: The new LTCH payment policy is associated with no changes in Medicare spending and mortality, but higher readmissions and post-discharge sepsis rates among severe wound patients with a high likelihood to use an LTCH.