File: Original_vs_New_Specialty_Adjusted_TIN_per_Capita_Cost_18APR13.xlsx

Objective: Claims from January 1 through December 31, 2011 with exactly 90 day runout Specialty_Benchmarks National cost per capita for EP specialties TIN_Distribution Distribution of cost per capita, specialty-adjusted benchmark, and specialty-adjusted cost per capita for TINs used by 1+ EPs EP_Distribution_Charge EP_Distribution_Charge_Diff EP_Distribution_NPI EP_Distribution_NPI_Diff Rank_Correlation_Charge Rank_Correlation_NPI
To address the concerns raised in MPR's Comments on Specialty Adjusted Costs Benchmarking:

Oncology specialties have some of the highest national benchmarks, though somewhat lower than in the previous specialty-adjusted analysis. Geriatric psychiatry and geriatric medicine have the highest national specialty benchmarks at $14,064 and $13,390, respectively (Specialty_Benchmarks) By specialty, comparison and difference between rank by percent of specialty EP relationships with high cost TINs using original per capita cost and specialty-adjusted per capita cost weighted by percent of TIN charges By specialty, comparison and difference between rank by percent of specialty EP relationships with high cost TINs using original per capita cost and specialty-adjusted per capita cost weighted by percent of TIN NPIs Investigate the specialty-level impacts in TINs of 1+ EPs of adjusting the ACO per capita cost to account for specialty mix at the group level

By specialty, comparison of EP-TIN relationships by cost range using original per capita cost vs specialty-adjusted per capita cost weighted by charges
By specialty, comparison of EP-TIN relationships by cost range using original per capita cost vs specialty-adjusted per capita cost weighted by NPIs By specialty, difference between EP-TIN cost range distribution using original per capita cost and specialty-adjusted per capita cost weighted by charges
By specialty, difference between EP-TIN cost range distribution using original per capita cost and specialty-adjusted per capita cost weighted by NPIs Data: Worksheets:

Conclusions: Diagnostic radiology: whereas the past benchmarking considered costs incurred by 714 diagnostic radiologists, the new group-level specialty-adjusted benchmark considers the 21,190 billing relationships between diagnostic radiologist and TINs of 1+ EPs, give a more representative sample of their billing practices (Specialty_Benchmarks). Nephrology: while nephrology's benchmark ranking did not decrease (indicating higher relative cost), its absolute national benchmark cost did increase by over $1,500 under the group-level specialty-adjusted benchmark. Notably, the number of beneficiaries under nephrology decreased, indicating that the groups treating these beneficiaries were largely not composed of nephrologists (else more of the group's beneficiaries would be attributed).Even after adjusting for specialty composition, most of the top specialties by proportion of EPs in high cost TINs are oncology related. There was little difference between weighting specialties by percent of charges vs percent of NPIs associated with each specialty. Four of the top five specialties by proportion of Eps in high cost TINs are oncology related (EP_Distribution tabs). Geriatric psychiatry, hematology, and geriatric medicine also have high proportions of EPs in high cost TINs.

Beneficiaries were attributed to 1 TIN based on primary care claims.
EPs were assigned 1 predominant specialty as the specialty with the largest share of carrier claim costs.

Each TIN had a specialty-adjusted cost per capita benchmark calculated as the sum of its constituent specialty benchmarks weighted by: 1) the percent of the TIN's charges incurred by EPs of that specialty. The denominator was TIN charges incurred by EPs. 2) the percent of the TIN's EPs with that main specialty. Beneficiaries who did not receive primary care froma primary care physician were attributed to the TIN with the largest share of primary care costs and at which they had at least 1 primary care claim by a physician. Beneficiaries with primary care from a primary care physician were attributed to the TIN with the largest share of primary care costs incurred by a primary care physician. Specifications:

The standardized risk-adjusted per capita cost for each TIN was calculated as the ratio of it beneficiaries' total standardized costs over its beneficiaries' total predicted costs, multiplied by the national average standardized cost. A national cost per capita benchmark was calculated for each specialty. The cost per capita for each TIN in which the specialty had billing EPs was weighted by that specialty's share of TIN EPs and the number of beneficiaries attributed to that TIN. This product was summed over all TINs and divided by the summed specialty share times the number of TIN beneficiaries. This benchmark reflects the average cost of beneficiaries attributed to groups of physicians with that specialty and avoids attributing costs to individual physicians. Medical oncology, hematology/oncology, and radiation oncology finish the top 5, though their benchmarks are $1,000 - $3,000 lower than in the previous specialty-adjusted analysis. Specialty-adjusting the TIN cost per capita to a benchmark and then a specialty-adjusted cost per capita significantly reduces the spread in costs. The standard deviation of TIN costs per capita is $7,778 while the standard deviation of the specialty-adjusted costs per capita is around $1,050 (TIN_Distribution).
Specialty-adjusting does reduce the proportion of oncology EPs in high cost TINs (e.g. medical oncology fell from 15 percentage points from 44% to 29%) but oncology specialties remain very highly ranked. There is very little significant shifting of rank by proportion of EPs in high cost TINs. Almost all specialties stayed in the same rank quintile (Range_Correlation tabs). Overall, benchmarking by specialty does reduce the % of oncologists that are in high cost TINs. It also cuts by one third the proportion of EPs in high cost TINs that are oncologists. However, it does not significantly change the relative ranking of specialties. It is important to note that oncologists comprise a small percentage of the EPs profiled by the per capita cost measure, and only a small percentage of oncologists are included in the per capita cost measure (due to the primary care attribution rule).The mean and standard deviation of this specialty-adjusted per capita cost were taken over all TINs.

In the original analysis, TINs with per capita cost more than 1 standard deviation below the mean were categorized as low cost; TINs with per capita cost more than 1 standard deviation above the mean were categorized as high cost; all other TINs were categorized as medium cost. The 5th and 95th percentiles of bootstrapped per capita cost were not used for this analysis. TINs with a specialty-adjusted per capita cost more than 1 standard deviation below the mean were categorized as low cost; TINs with specialty-adjusted per capita cost more than 1 standard deviation above the mean were categorized as high cost; all other TINs were categorized as medium cost. For each TIN, the specialty-adjusted per capita cost was calculated as the ratio of the TIN's per capita cost to its per capita cost benchmark, multiplied by the national average standardized cost per beneficiary.Original_vs_New_Specialty_Adjusted_TIN_per_Capita_Cost_18APR13.xlsx

Distribution of cost per capita, specialty-adjusted benchmark, and specialty-adjusted cost per capita for TINs used by 1+ EPs

To address the concerns raised in MPR's Comments on Specialty Adjusted Costs Benchmarking:

Oncology specialties have some of the highest national benchmarks, though somewhat lower than in the previous specialty-adjusted analysis. Geriatric psychiatry and geriatric medicine have the highest national specialty benchmarks at $14,064 and $13,390, respectively (Specialty_Benchmarks) By specialty, comparison and difference between rank by percent of specialty EP relationships with high cost TINs using original per capita cost and specialty-adjusted per capita cost weighted by percent of TIN charges By specialty, comparison and difference between rank by percent of specialty EP relationships with high cost TINs using original per capita cost and specialty-adjusted per capita cost weighted by percent of TIN NPIs Investigate the specialty-level impacts in TINs of 1+ EPs of adjusting the ACO per capita cost to account for specialty mix at the group level

By specialty, comparison of EP-TIN relationships by cost range using original per capita cost vs specialty-adjusted per capita cost weighted by charges
By specialty, comparison of EP-TIN relationships by cost range using original per capita cost vs specialty-adjusted per capita cost weighted by NPIs By specialty, difference between EP-TIN cost range distribution using original per capita cost and specialty-adjusted per capita cost weighted by charges
By specialty, difference between EP-TIN cost range distribution using original per capita cost and specialty-adjusted per capita cost weighted by NPIs Data: Worksheets:

Conclusions: Diagnostic radiology: whereas the past benchmarking considered costs incurred by 714 diagnostic radiologists, the new group-level specialty-adjusted benchmark considers the 21,190 billing relationships between diagnostic radiologist and TINs of 1+ EPs, give a more representative sample of their billing practices (Specialty_Benchmarks). Nephrology: while nephrology's benchmark ranking did not decrease (indicating higher relative cost), its absolute national benchmark cost did increase by over $1,500 under the group-level specialty-adjusted benchmark. Notably, the number of beneficiaries under nephrology decreased, indicating that the groups treating these beneficiaries were largely not composed of nephrologists (else more of the group's beneficiaries would be attributed).Even after adjusting for specialty composition, most of the top specialties by proportion of EPs in high cost TINs are oncology related. There was little difference between weighting specialties by percent of charges vs percent of NPIs associated with each specialty. Four of the top five specialties by proportion of Eps in high cost TINs are oncology related (EP_Distribution tabs). Geriatric psychiatry, hematology, and geriatric medicine also have high proportions of EPs in high cost TINs.

EPs were assigned 1 predominant specialty as the specialty with the largest share of carrier claim costs.

Each TIN had a specialty-adjusted cost per capita benchmark calculated as the sum of its constituent specialty benchmarks weighted by: 1) the percent of the TIN's charges incurred by EPs of that specialty. The denominator was TIN charges incurred by EPs. Beneficiaries who did not receive primary care froma primary care physician were attributed to the TIN with the largest share of primary care costs and at which they had at least 1 primary care claim by a physician. Beneficiaries with primary care from a primary care physician were attributed to the TIN with the largest share of primary care costs incurred by a primary care physician. Specifications:

The standardized risk-adjusted per capita cost for each TIN was calculated as the ratio of it beneficiaries' total standardized costs over its beneficiaries' total predicted costs, multiplied by the national average standardized cost. A national cost per capita benchmark was calculated for each specialty. The cost per capita for each TIN in which the specialty had billing EPs was weighted by that specialty's share of TIN EPs and the number of beneficiaries attributed to that TIN. This product was summed over all TINs and divided by the summed specialty share times the number of TIN beneficiaries. This benchmark reflects the average cost of beneficiaries attributed to groups of physicians with that specialty and avoids attributing costs to individual physicians. Medical oncology, hematology/oncology, and radiation oncology finish the top 5, though their benchmarks are $1,000 - $3,000 lower than in the previous specialty-adjusted analysis. Specialty-adjusting the TIN cost per capita to a benchmark and then a specialty-adjusted cost per capita significantly reduces the spread in costs. The standard deviation of TIN costs per capita is $7,778 while the standard deviation of the specialty-adjusted costs per capita is around $1,050 (TIN_Distribution).
Specialty-adjusting does reduce the proportion of oncology EPs in high cost TINs (e.g. medical oncology fell from 15 percentage points from 44% to 29%) but oncology specialties remain very highly ranked. There is very little significant shifting of rank by proportion of EPs in high cost TINs. Almost all specialties stayed in the same rank quintile (Range_Correlation tabs). Overall, benchmarking by specialty does reduce the % of oncologists that are in high cost TINs. It also cuts by one third the proportion of EPs in high cost TINs that are oncologists. However, it does not significantly change the relative ranking of specialties. It is important to note that oncologists comprise a small percentage of the EPs profiled by the per capita cost measure, and only a small percentage of oncologists are included in the per capita cost measure (due to the primary care attribution rule).The mean and standard deviation of this specialty-adjusted per capita cost were taken over all TINs. In the original analysis, TINs with per capita cost more than 1 standard deviation below the mean were categorized as low cost; TINs with per capita cost more than 1 standard deviation above the mean were categorized as high cost; all other TINs were categorized as medium cost. The 5th and 95th percentiles of bootstrapped per capita cost were not used for this analysis. TINs with a specialty-adjusted per capita cost more than 1 standard deviation below the mean were categorized as low cost; TINs with specialty-adjusted per capita cost more than 1 standard deviation above the mean were categorized as high cost; all other TINs were categorized as medium cost. For each TIN, the specialty-adjusted per capita cost was calculated as the ratio of the TIN's per capita cost to its per capita cost benchmark, multiplied by the national average standardized cost per beneficiary.