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Mandatory Payment Models Could Inadvertently Perpetuate Health Care Disparities

In a recent study published in JAMA Network Open, Joshua Liao and Penn colleagues show that communities with lower proportions of Medicare/Medicaid dual-eligible individuals were less likely to be selected for mandatory joint replacement bundles under the CMS Comprehensive Care for Joint Replacement Model (CJR).


Dr. Liao and colleagues outline the background for the work:


"Using a market-level mandate, Medicare’s Comprehensive Care for Joint Replacement (CJR) Model has required urban US hospitals to accept bundled payments for hip and knee surgery episodes. Among metropolitan statistical area (MSA) markets with above-average episode spending (196 of 384 MSAs), Medicare randomly selected 67 for inclusion.1 Given the 3% to 4% episode savings and stable quality achieved through CJR, Medicare has reinforced its commitment to MSA market-level mandates, using the approach in the forthcoming Radiation Oncology Model with another mandatory program planned in 2023.
One key advantage of mandatory over voluntary programs is mitigating physician or hospital self-selection that could lead to the exclusion of patients with low socioeconomic status (SES). This advantage can also enhance generalizability of program results, but only if regions in the program do not differ greatly from those not included. However, it remains unclear whether communities in CJR are representative of others nationwide with respect to residents’ SES."

Dr. Liao and colleagues conducted an analysis to address this issue. What they found was that compared to communities with the lowest proportion of dual-eligible individuals, communities with the highest proportions were 14% less likely to be selected for CJR.


As the authors put it in their manuscript:

"In multivariable analysis, market-level dual-eligibility share was inversely associated with the likelihood of being a CJR market (Figure). The probability of being a CJR market decreased from the lowest quartile (quartile 1) of dual-eligibility share to quartile 2 (−4.5 percentage point probability; 95% CI, −8.3 to −0.7 percentage point probability; P = .02) and quartile 3 (−8.3 percentage point probability; 95% CI, −14.6 to −2.0 percentage point probability; P = .01). An increase from the lowest to highest quartile (quartile 4) of dual-eligibility share was associated with a −14.1 percentage point probability of being a CJR market (95% CI, −22.2 to −6.0 percentage point probability; P < .001)."

The main conclusion was that "markets that were more likely to have a higher burden of adverse outcomes through social risk factors were less likely to be selected for CJR."


The main policy implications: market-level mandates do not directly consider community social factors could inadvertently perpetuate disparities facing socioeconomically vulnerable groups; and policymakers should urgently address this concern in future mandatory programs.

Read the full paper here. Learn more about Dr. Liao's work in value-based payment models here.

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