Estimating Non-VA Costs

1. Estimating Non-VA Costs Mark Smith & Todd H. Wagner April 2009

2. Learning Objective • It is common for veterans to use non-VA providers. At the end of the class, you will know the pros and cons of different methods

3. Non-VA Use is Common • According to 1999 survey data, 73% of VA enrollees have alternative coverage • 53% have Medicare • 19% private without Medicare • 1% Medicaid without Medicare or private • Among VA enrollees • Approximately 4 in 10 used VA exclusively • Two-thirds expect to use VA for primary care in the future Shen Y et al. (2003) VHA Enrollees’ Health Care Coverage and Use of Care. Medical Care Research and Review. 60(2) 253-267

4. Different Methods for Assessing Non-VA Utilization • Fee Basis • Sharing Agreements • Self-report

5. Overview of Fee Basis Program • Pays for care at non-VA facilities when • it is the only source available, or • VA could save money • Full range of services covered • Mostly pre-arranged; limited emergent care • Excludes care through “sharing agreements” with affiliated universities and others • Totals roughly over $2B in FY2008

6. Names of Fee Basis Files - I • Clinical files • Hospital stay • Ancillary services provided to inpatients • Outpatient services • Payments to pharmacies • Non-clinical files • Travel expenses • Pharmacy vendor file • Other vendors file • Veterans with FEE cards (long-term users)

7. Highlights of Clinical Data • Outpatient: • Date of service • 1 CPT procedure code • Inpatient: • Start and end dates of treatment • Up to 5 surgery codes • Up to 5 ICD-9 diagnosis codes (*no decimal*)

8. Highlights of Financial Data • Amount claimed • Amount paid • Many variable relating to FMS record-keeping: invoice date, processing date, check number, check date, cancel code, etc.

9. Highlights of Vendor Data • Vendor ID • Address (city, state, zip) • Related VA station number • Payment totals by month

10. Notes on Fee Basis Data • Each row of data represents a service provided • Multiple services may be paid by a single VA check; see EFTNO (electronic funds transfer no. ~= check no.) and CHKDAT (check date) • There is repetition across variables: state appears twice, some dates appear in both Julian and SAS formats • Blank fields are common!

11. Using Fee Basis Files: Cautions • Beware of missing decimal places • ICD diagnosis codes • Payment amounts (see next slide) • New Purpose of Visit (POV) codes are added over time, so be careful about searching for new codes in old files • Care in community nursing homes, state veterans homes, and some non-VA hospitals is also recorded in other files

12. Using Fee Basis Files: Cautions • The four claims files represents claims paid during the fiscal year – not services performed during the fiscal year. • Claims may be paid up to two years after the service, and in practice it sometimes goes beyond then.

13. Using Fee Basis Files: Cautions • To find all claims for a Fee Basis inpatient stay in June, 2006, search in the FY2006, FY2007, and FY2008 files. Search by service date and person ID. • Inpatients sometimes transfer directly from one provider (vendor) to another. Watch for contiguous inpatient stays at 2+ vendors.

14. HERC Technical Report • HERC Technical Report #18 is a guidebook for using Fee Basis data. It can be downloaded from the HERC intranet web site.

15. Questions on Fee Basis Files?

16. Sharing Agreements

17. Definition and Scope • VA medical centers may contract for clinical and related services with affiliated medical schools, faculty groups, hospitals, and other providers.  • These contracts are also called sharing agreements.

18. Definition and Scope • Sharing agreements are contracts with non-VA providers to offer selected types of care, usually to many patients, over a period of time. • Unlike much Fee Basis care they do not center on an individual patient and are not subject to similar coverage limitations.  

19. Reasons for Sharing Agreements 1. A VA facility cannot provide needed care and the patient cannot be transferred to another VA 2. A VA facility cannot recruit a needed clinician 3. Only a portion of a clinician’s time is needed

20. Reasons for Sharing Agreements 4. To reach market-rate pay for certain highly paid subspecialists 5. When it is cost-effective to share a service or space with another entity rather than to develop stand-alone capacity for VA

21. Types of Care • Specialty services: anesthesiology, cardiology, neurosurgery, ophthalmology, orthopedic surgery, radiology • Other services: space rental, animal care and use, prescription drug storage, laundry, antenna leasing, athletic facilities

22. Payment • Sharing agreements can be paid in three ways: • a portion of full-time-equivalent (FTE) employment • negotiated fees for specific procedures • per Medicare relative value unit (RVU) for the care provided • Services are valued based on local and regional market analyses • Payments may exceed Medicare rates depending on prevailing market rates

23. Other Details • About half of all VA medical centers have sharing agreements, typically 2-4 per year. • The total estimated value of the contracts exceeded $64,000,000 in FY2008. • An annual tabulation of all contracts is maintained by the Medical Sharing branch of the Procurement and Logistics office in Washington.

24. Records • Care purchased from DoD is supposed to be channeled through the Fee Basis system.  Actual reporting is uneven – some care is being missed. • There is an ongoing project to improve the VISTA FEE package and the IPAC payment system.  The changes are intended to fully capture workload and cost of care provided by DoD to VA enrollees.  • HERC is currently investigating records of non-DoD sharing care. Watch for a new FAQ response on our web site.

25. Questions on Sharing Agreements?

26. Self-Report

27. Collecting Health Care Utilization • Costly and time consuming • No gold standard method • Administrative data are incomplete / inaccurate • Limited benefits • Out-of-plan or out-of-pocket utilization • Capitated health plans

28. Poll • During the past 12 months, how many times have you seen a doctor or other health care professional about your own health at a doctor's office, a clinic, or some other place? Do not include times you were hospitalized overnight, visits to hospital emergency rooms, home visits, or telephone calls. • Responses 0 1 2 3 4 5 6 7+

29. Cognitive process of recalling information What is Self-Report A. Bhandari and T. Wagner, "Self-reported utilization of health care services: improving measurement and accuracy," Medical Care Research and Review 63, no. 2 (2006): 217-235.

30. Fixed Attributes • Process influenced by illnesses or disabilities (e.g., dementia or mental retardation) • Older age is consistently correlated with poorer recall accuracy (spurious correlation) • Older adults more likely to under-report.

31. Recommendations • Are respondents able to self-report? • Consider age and cognitive capacity • 14 is lower limit • Use cognitive screening tool, such as MMSE

32. Recall Timeframe and Frequency • Time Frame • Longer recall times result in worse accuracy • Longer timeframes lead to telescoping and memory decay • Frequency • Under-reporting is exacerbated with increased utilization • As the number of visits increase, people forget some

33. Recommendations • Avoid recall timeframes greater than 12 months • Shorter recall may be necessary for • Office visits (low salience) • Frequent users • Consider two-timeframe method (i.e., 6-2)

34. Questionnaire Design “How many times have you seen a physician in the past 6 months?” • What is a “time?” What about multiple times on same day? • What is a physician? Does a nurse count? • Is “seen” literal? What about a phone consultation with prescription? • What about care for someone else?

35. Design: wording • Recall order • Chronological: go back a year and think forward • Reverse chronological: supposition: later events are the easiest to recall and helps recall previous events • Free recall • Data are inconclusive; unclear whether this varies by gender or culture

36. Data Collection • Modes: mail, telephone, Internet, and in-person data • No study has compared all four • Probing with memory aids can help improve accuracy • Stigma is important

37. Recommendations • No standards exist and standards may not be possible • Pretest: Dillman (2000) • Placement in questionnaire might matter • Phone, in person and some Internet surveys allow for memory aids • For example, landmark events

38. Response Scale • Use counts • Include “your best estimate is fine” • Avoid categories, which introduce biases and error in the statistical analysis • 0, 1-2, 3-5, 6+

39. Costs • Self-reported costs are assumed poor • Imputing costs from self-reports can introduce biases • Analyze visits, not just costs

40. Questions