As a Health Economics firm, we routinely perform a variety of analyses across multiple Medicare databases; in so doing, we have observed numerous occurrences of COVID-19's impacts. We learned quickly that monthly data were vital to understanding the volatility that COVID-19 introduced into the healthcare system. For instance, from March to April 2020, there was a marked decrease in activity in the healthcare sector. Even ED visits fell dramatically during this time period. In the subsequent months of 2020, monthly data showed lower utilization than observed in prior years, and sometimes unintuitive trends. At this point, due to lags in the data and continued monthly volatility, it is uncertain whether 2021 data reflect a return to normal, or still a decreased amount of activity in the healthcare industry.

In addition to overall changes in utilization, we observed changing relationships within the system. For instance, the portion of fee-for-service (FFS) patients obtaining Home Health care following their hospital discharge overtook the portion of FFS patients obtaining post-hospital care at a Skilled Nursing Facility (SNF), representing a reversal of pre-COVID relationships, as people became wary of SNF care given the infection rates in nursing homes. This reversal in market dominance between SNFs and Home Health care may have changed in late 2020 and early 2021 but we are not sure whether it's been maintained. Second, for Home Health and other settings telehealth changed the dynamics of health care provision. However, many of the Home Health telehealth visits were neither recorded nor costed, hence the extent to which telehealth replaced the in-person visits is unknown.

As we continue to evaluate 2021 data and prepare to conduct preliminary 2022 analyses, we will get a better understanding of the degree to which the healthcare system has returned to a "normal" post-COVID-19 state. A major effect has been that if we want to assess healthcare performance, 2019 data is still the most accurate. And if we want to assess COVID-19's upheaval on the system, we look at the 2020 and 2021 data. This means that the CMS rulemaking process (which typically relies on the most recent historical data for rate setting and other policy changes) has been somewhat disrupted.

Furthermore, it is difficult to ascertain whether recent observed trends were the result of COVID-19 or CMS policy making, which brought about significant payment system changes each of which caused unique impacts in the midst of COVID-19's upheaval. We have yet to determine whether 2021 data will represent a return to normal for the CMS rulemaking process

Dobson | DaVanzo welcomed Brian Hedgeman, MPH, MBA, DrPH, JD, is an Associate. Brian brings a broad range of experience in conducting program design and evaluations, survey design (quantitative and qualitative analyses), health policy analysis, and compliance and legal analysis to the firm. Before joining Dobson | DaVanzo, Dr. Hedgeman worked as a Law Clerk/Advisor at Epstein Becker & Green, PC, where he supported numerous healthcare and life science clients on regulatory and compliance issues specific to federal and state regulations. Dr. Hedgeman holds a Bachelor of Arts in Government from the University of Redlands, a Master of Business Administration and Master of Public Health from Claremont Graduate University, a Doctor of Public Health Degree from Loma Linda University, and a Juris Doctor from Howard University School of Law.

Dobson | DaVanzo is pleased to welcome NaToya Mitchell, MA, as Senior Manager. Prior to joining us, NaToya served as the Commissioner for Anne Arundel County (MD) Commission on Disability Issues. Committed to effective and equitable care, Ms. Mitchell is an Anne Arundel County, Maryland executive appointee and member of several commissions, boards, and workgroups. Formerly an administrator for the Maryland Department of Health, she led the Developmental Disabilities Administration delivery model for people self-directing home and community-based supports while actively managing a $235M portfolio of health services. Ms. Mitchell has earned a Master of Arts in International Studies, and a Bachelor of Arts in Political Science. She is currently pursuing a Doctor of Public Health from Morgan State University. 

Dobson | DaVanzo welcomed Paige Lambert in the role of Research Analyst. Prior to joining our firm, Paige served as a Regulatory Analyst in the Public Health Division for the Town of Needham in Massachusetts. She received her Bachelor of Science at the College of William and Mary and her Master of Public Health from Boston University.

The American Physical Therapy Association (APTA) and American Occupational Therapy Association (AOTA) have published summary materials of the Dobson DaVanzo & Associates Therapy Outcomes in Post-Acute Care Settings (TOPS) study. This study examined the relationship of physical and occupational therapy to measured changes in reported functional independence and readmissions. Overall, we found that therapy intensity is directly and positively related to improvements in functional ability and post-discharge readmission rates.

The TOPS study used Medicare claims and post-acute care assessment data (OASIS, IRF-PAI and MDS) to assess the amount of therapy received during a stay and functional impairment of core activities of daily living and mobility at admission and discharge. This allowed us to measure functional improvement while controlling for important beneficiary health and service use factors. Post-acute care (PAC) settings studied – Inpatient Rehabilitation Facilities, Skilled Nursing Facilities, and Home Health Agencies – differed substantially in their approaches to care provision as well as measurement of key functional status items. While we were able to compensate for this in the study, these differences precluded direct comparison across studies, with strong implications for the future of a unified PAC payment system.  

Summary TOPS study materials are available from APTA: https://www.apta.org/article/2021/04/05/apta-aota-joint-statement.

In 2020, 5.8 million Americans aged 65 and older (11% of the total population in this age group as of 2019) were diagnosed with Alzheimer’s Disease (AD) [1]. To determine Medicare and Medicaid expenditures for beneficiaries and total societal expenditures associated with the clinical introduction of a potential AD treatment for Medicare beneficiaries, we used the 2020-2021 total AD population over 65 as a baseline. Using a step-down approach and factoring in a take-up rate, we determined the target population that would benefit from the potential AD treatment to be 80,248, or approximately 1.4% of the initial population, gradually increasing each year to 205,153 by 2031. In addition, the analysis focuses on a 10-year time frame (2022-2031) and, specifically, on the Medicare population over 65. Our estimated 10-year cost savings assume the introduction of a novel AD medication that delays disease progression by six months for year 1 (2022), twelve months for year 2 (2023), eighteen months for year 3 (2024), and twenty-four months for all following years until 2031. A delay of this length represents a dramatic roll back in the progression of the disease where the costs are significantly higher than in the earlier stages of the disease. We assumed an aggressive take-up rate of the novel AD medication, starting at 25% in 2022 and gradually increasing to 50% in 2031. This analysis estimates our total 10-Year Savings as: $1.24 billion for Medicare (including beneficiary copayments), $26.42 billion for Medicaid and Non-Medicaid Nursing Home Costs, and $11.86 billion for Informal Care and Support Costs for a total of $39.52 billion. You can read an executive summary of the analysis and download the full report here.

Potential Medicare savings are limited because the study only focuses on those costs associated with Medicare spending that are directly associated with AD or ~11% of the total Medicare expenditures for AD patients [2]. For Medicaid savings, the analysis specifically focuses on costs and savings generated from Nursing Home (NH) Care for Medicare beneficiaries. It is estimated that close to two thirds of nursing home residents in the US have some type of cognitive impairment like AD [3]. The informal caregiving cost estimates account for both a population that enrolls in nursing home care and a population that never enrolls in nursing homes. Greater savings are achieved through reductions in broader societal expenditure burden like formal Medicaid long-term care expenditures and informal caregiving and support expenditures than from Medicare and Medicare Copayments.

A drug that would delay AD disease progression by up to two years would increase quality of life by preserving and extending patients’ independence for a longer time, thus transforming the AD drug space. A drug that delays AD disease progression by two years also promises significant social returns relative to costly drugs that extend life for much shorter time frames. The most important benefit of the potential AD treatment is likely not monetary, but rather quality of life due to a delay in the debilitating neurodegenerative sequelae of AD. Biogen, Inc. commissioned Dobson DaVanzo & Associates, LLC, a health economics and policy consulting firm, to conduct this study.

References

[1] Alzheimer’s Association. (2020), 2020 Alzheimer's disease facts and figures. Alzheimer's Dement., 16: 391-460. https://doi.org/10.1002/alz.12068

[2] Pyenson, B., Sawhney, T. G., Steffens, C., Rotter, D., Peschin, S., Scott, J., & Jenkins, E. (2019). The real-world medicare costs of alzheimer disease: considerations for policy and care. Journal of managed care & specialty pharmacy, 25(7), 800-809.

[3] Gaugler, J. E., Yu, F., Davila, H. W., & Shippee, T. (2014). Alzheimer’s disease and nursing homes. Health Affairs, 33(4), 650-657.

Dobson | DaVanzo routinely assists clients who wish to submit their studies to peer reviewed journals. Our analysts and data scientists help to develop the “story line,” and tailor the content and format to the requirements of the selected journal. Our studies range from econometric analyses of legislation or Medicare regulation to more clinically oriented retrospective longitudinal cohort studies of patient outcomes using Medicare claims. Recent examples are "Economic Value of Orthotic and Prosthetic Services Among Medicare Beneficiaries: A Claims-Based Retrospective Cohort Study, 2011–2014", appearing in the Journal of NeuroEngineering and Rehabilitation in 2018 and "An Economic Evaluation of the Impact, Cost, and Medicare Policy Implications of Chronic, Nonhealing Wounds", appearing in Value in Health in 2018. Other studies have been published in a wide variety of journals such as Health Economics, Health Affairs, The Milbank Quarterly, Surgical Technology International, Military Medicine, and Journal of Vascular Access. We are currently preparing three manuscripts for clients based on our analysis of the 100 percent Medicare files. 

Dobson | DaVanzo is pleased to announce its continued partnership over the next five years with Booz Allen Hamilton's (BAH) Independent Evaluation Center to evaluate hospital and clinician focused improvement initiatives related to large scale interventions in the fields of Behavioral Health, Chronic Disease Management, Patient Safety, Quality of Care Transitions, Long Term Care and response to the COVID-19 emergency and preparedness. As subcontractor to BAH, Dobson | DaVanzo will collaborate on technical aspects of the development and implementation of formative and impact evaluations as well as on innovative techniques to estimate a Return on Investment to CMS. This work is a continuation of Dobson | DaVanzo’s past subcontracting work for BAH, in which impact evaluation and ROI estimates were produced for CMS related to the Quality Innovation Network-Quality Improvement Organizations (QIN-QIOs) 11th Statement of Work.

Dobson | DaVanzo has been helping manufacturers and service providers of focused ultrasound (FUS) devices in understanding how CMS sets Ambulatory Payment Classification (APC) payment amounts in the outpatient setting. The project entails tracking how providers bill Medicare for a code in relationship to the cost of delivering the service. The key is that the provider bills Medicare “charges.” Medicare then steps these charges down to costs using the hospital’s cost-to-charge ratio (CCR x charges = costs) and sets payments at these estimated costs. Through workshops and webinars, Dobson | DaVanzo has been able to discuss with a number of academic medical centers and their various financial departments how the decisions on Revenue Center selection, setting, and charge levels influence eventual CMS APC payments.

Dobson | DaVanzo was commissioned by the Independence Through Enhancement of Medicare and Medicaid (“ITEM”) Coalition to model the likely impact of establishing coverage for two accessories of complex rehabilitative power wheelchairs on Medicare spending over 10 years (2021-2030). In their findings, they provided cost estimates which will be incurred by Medicare in the event of coverage implementation of these wheelchairs.

Dobson | DaVanzo analyzed preliminary 2020 Medicare Home Health claims and found that agencies may be underpaid on a case basis in 2020 due to the dual pressures of payment system reform and the ongoing COVID-19 public health emergency (PHE). Home health agencies concurrently experienced a decline in home health episode and visit volume, primarily due to the COVID-19 pandemic, but also due to issues stemming from the transition to the new home health reimbursement system—Patient Driven Groupings Model (PDGM). Under PDGM, a provider gets penalized if they deliver fewer visits to a patient than the threshold set by CMS. Prior to the pandemic-related state actions (in January and February), there were many more cases penalized for having too few visits within an episode than CMS targeted in its rulemaking; this is likely the result of PDGM but was subsequently exacerbated by the PHE.

This work, sponsored by the Partnership for Quality Home Healthcare, was submitted during the CY2021 HH PPS proposed rule public comment period and will be made available in the federal register. In it, we examine the extent to which home health agencies have conformed to behavioral assumptions, the basis of prospective CMS rate reductions in 2020. Ultimately, we found evidence that the system has a base payment rate which leads to payments that are 6% lower in implementation than expected in prior rulemaking. CMS reduced rates for 2020 by 4.36% on the basis of assumed provider behavioral responses to the new payment system.

Regardless of the cause (CMS rate reductions, implementation of the new payment system, PHE, hurricanes, and so on), average home health case payments are below the budget neutral level specified as the target spending level in the Bipartisan Budget Act of 2018. PDGM implementation and the COVID-19 PHE are entangled, making it difficult to firmly attribute the observed payment rate to one or another factor. Realistically, all healthcare providers have been affected by the PHE to some extent and it is unclear how long it will take or the extent to which it will to return to pre-pandemic activity levels.

In July, CMS exercised Option Period 2 to extend Dobson | DaVanzo’s contract to assist with Part D Formulary and Benefits Assessment. Under this contract, Dobson | DaVanzo and its sub-contractor, Acumen, LLC, will continue to monitor the prescription drug benefits program as offered through the Medicare Prescription Drug, Improvement, and Modernization act of 2003 (MMA). We will continue to analyze and summarize contract/plan benefit and formulary offerings, enrollment data and prescription drug event (claims) data, as well as the relationship between drug utilization and health status or other characteristics of the beneficiary or plan. These results may influence future Part D formulary and/or benefits requirements.

Dobson | DaVanzo provided expert consulting and testimony concerning hospital taxes and Medicaid rates for the Connecticut Hospital Association (CHA) over a period of several years. The CHA just received a “final” settlement. The settlement was complex involving approval by the State legislature, CMS approval of numerous plan amendments, and approval by the Connecticut (CT) Superior Court. Hospitals in CT will receive a one-time payment and various rate increases. It was an “amazing” journey with an outcome acceptable to both hospitals and the State. This settlement is an example of how complex payment issues can be resolved in a way that ultimately assures continued quality care for CT residents.

In June, CMS exercised Option Period 2 to extend Dobson | DaVanzo’s contract to assist with Monitoring and Data Validation of Parts C & D Reporting Requirement. Under this contract, Dobson | DaVanzo and its sub-contractor Acumen, LLC, will continue to monitor data submissions by Medicare Advantage Organizations (MAOs) and Part D Sponsors, prepare and analyze submitted data, create Public Use Files (PUF) and updates, and/or create Data Validation (DV) Standards. Dobson | DaVanzo will analyze the reporting requirements data reported by Sponsors to calculate overall Part C and Part D program summary statistics and produce performance measures for public reporting. The outcomes from this project will ensure that Medicare beneficiaries have access to information about their health and drug plans, and to ensure that beneficiaries are provided with care that is of high quality and is safe, effective, and timely.

Dobson | DaVanzo welcomed Sarah Rappazzo, a health policy enthusiast, for a virtual summer internship with the firm. Sarah is an undergraduate student at Cornell University with a major in Biology and Society and minor in Health Policy and Nutrition, Health and Society. Among other activities, she will be supporting the firm in its contract with CMS to monitor the Medicare Disproportionate Share Hospital-related comments during the Inpatient Prospective Payment System (IPPS) rulemaking.