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

Estimating Non-VA CostsEstimating Non-VA Costs

Mark Smith &Mark Smith &

Todd H. WagnerTodd H. WagnerApril 2009April 2009

Learning ObjectiveLearning Objective

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

Non-VA Use is CommonNon-VA Use is Common According to 1999 survey data, 73% of VA According to 1999 survey data, 73% of VA

enrollees have alternative coverageenrollees have alternative coverage– 53% have Medicare53% have Medicare– 19% private without Medicare19% private without Medicare– 1% Medicaid without Medicare or private1% Medicaid without Medicare or private

Among VA enrollees Among VA enrollees – Approximately 4 in 10 used VA exclusivelyApproximately 4 in 10 used VA exclusively– Two-thirds expect to use VA for primary care in Two-thirds expect to use VA for primary care in

the futurethe futureShen Y et al. (2003) VHA Enrollees’ Health Care Coverage and Use of Care. Medical Care Research and Review. 60(2) 253-267

Different Methods for Assessing Different Methods for Assessing Non-VA UtilizationNon-VA Utilization

Fee BasisFee Basis

Sharing AgreementsSharing Agreements

Self-reportSelf-report

Overview of Fee Basis ProgramOverview of Fee Basis Program Pays for care at Pays for care at non-VA facilitiesnon-VA facilities when when

– it is the only source available, or it is the only source available, or – VA could save moneyVA could save money

Full range of services coveredFull range of services covered Mostly pre-arranged; limited emergent careMostly pre-arranged; limited emergent care Excludes care through “sharing agreements” Excludes care through “sharing agreements”

with affiliated universities and otherswith affiliated universities and others Totals roughly over $2B in FY2008Totals roughly over $2B in FY2008

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)

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*)

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.

Highlights of Vendor Data

Vendor ID Address (city, state, zip) Related VA station number Payment totals by month

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!

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

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.

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.

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.

Questions on Fee Basis Files?

Sharing AgreementsSharing Agreements

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.

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.  

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

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

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

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

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.

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.

Questions on Sharing Agreements?Questions on Sharing Agreements?

Self-ReportSelf-Report

Collecting Health Care UtilizationCollecting Health Care Utilization

Costly and time consumingCostly and time consuming No gold standard methodNo gold standard method Administrative data are incomplete / Administrative data are incomplete /

inaccurateinaccurate– Limited benefitsLimited benefits

– Out-of-plan or out-of-pocket utilizationOut-of-plan or out-of-pocket utilization

– Capitated health plansCapitated health plans

PollPoll During the past 12 months, how many times have you seen a doctor or 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 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 clinic, or some other place? Do not include times you were hospitalized overnight, visits to hospital emergency rooms, home visits, or telephone overnight, visits to hospital emergency rooms, home visits, or telephone calls.calls.

ResponsesResponses001122334455667+ 7+

What is Self-ReportWhat is Self-Report

Cognitive Cognitive process of process of recalling recalling informationinformation

QuestionnaireDesign

Mode of data collection, e.g., mail or phoneCognitively

impaired

Predisposing factors(age, gender, language, cultureetc.)

Sample demographics

Type of utilization

Recall Timeframe

Utilization Frequency(# of Visits andEvent Repetition)

Self-reportutilization

Modifiable attributes

Fixed attributes

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.

Fixed AttributesFixed Attributes

Process influenced by illnesses or Process influenced by illnesses or disabilities (e.g., dementia or mental disabilities (e.g., dementia or mental retardationretardation))

Older age is consistently correlated with Older age is consistently correlated with poorer recall accuracy (spurious poorer recall accuracy (spurious correlation)correlation)– Older adults more likely to under-report.Older adults more likely to under-report.

RecommendationsRecommendations

Are respondents able to self-report?Are respondents able to self-report?– Consider age and cognitive capacityConsider age and cognitive capacity

– 14 is lower limit14 is lower limit

– Use cognitive screening tool, such as Use cognitive screening tool, such as MMSEMMSE

Recall Timeframe and FrequencyRecall Timeframe and Frequency Time FrameTime Frame

– Longer Longer recall times result in worse accuracyrecall times result in worse accuracy– Longer timeframes lead to telescoping and Longer timeframes lead to telescoping and

memory decaymemory decay FrequencyFrequency

– Under-reporting is exacerbated with increased Under-reporting is exacerbated with increased utilizationutilization

– As the number of visits increase, people forget As the number of visits increase, people forget somesome

RecommendationsRecommendations

Avoid recall timeframes greater than Avoid recall timeframes greater than 12 months12 months

Shorter recall may be necessary forShorter recall may be necessary for– Office visits (low salience)Office visits (low salience)

– Frequent usersFrequent users Consider two-timeframe method (i.e., Consider two-timeframe method (i.e.,

6-2)6-2)

Questionnaire DesignQuestionnaire Design

““How many times have you seen a How many times have you seen a physician in the past 6 months?”physician in the past 6 months?”– What is a “time?” What about multiple What is a “time?” What about multiple

times on same day?times on same day?– What is a physician? Does a nurse count?What is a physician? Does a nurse count?– Is “seen” literal? What about a phone Is “seen” literal? What about a phone

consultation with prescription?consultation with prescription?– What about care for someone else?What about care for someone else?

Design: wordingDesign: wording Recall orderRecall order

– Chronological: go back a year and think forwardChronological: go back a year and think forward– Reverse chronological: supposition: later events Reverse chronological: supposition: later events

are the easiest to recall and helps recall previous are the easiest to recall and helps recall previous eventsevents

– Free recallFree recall Data are inconclusive; unclear whether this Data are inconclusive; unclear whether this

varies by gender or culturevaries by gender or culture

Data CollectionData Collection

Modes: mail, telephone, Internet, and in-Modes: mail, telephone, Internet, and in-person dataperson data– No study has compared all fourNo study has compared all four

– Probing with memory aids can help improve Probing with memory aids can help improve accuracyaccuracy

– Stigma is importantStigma is important

RecommendationsRecommendations

No standards exist and standards may not No standards exist and standards may not be possiblebe possible

Pretest: Dillman (2000)Pretest: Dillman (2000) Placement in questionnaire might matterPlacement in questionnaire might matter Phone, in person and some Internet Phone, in person and some Internet

surveys allow for memory aidssurveys allow for memory aids– For example, landmark eventsFor example, landmark events

Response ScaleResponse Scale

Use countsUse counts– Include “your best estimate is fine” Include “your best estimate is fine”

Avoid categories, which introduce biases Avoid categories, which introduce biases and error in the statistical analysisand error in the statistical analysis– 0, 1-2, 3-5, 6+ 0, 1-2, 3-5, 6+

CostsCosts

Self-reported costs are assumed poorSelf-reported costs are assumed poor

Imputing costs from self-reports can Imputing costs from self-reports can introduce biasesintroduce biases

Analyze visits, not just costsAnalyze visits, not just costs

QuestionsQuestions