Trends in Medicare Payment Rates for Noninvasive Cardiac Tests and Association With Testing Location
Authors: Frederick A. Masoudi, Timea Viragh, David J. Magid, Ali Moghtaderi, Samantha Schilsky, William M. Sage, Glenn Goodrich, Katherine M. Newton, David H. Smith, Bernard Black
Journal: JAMA Internal Medicine (2019)

<h3>Importance</h3> To control spending, the Centers for Medicare &amp; Medicaid Services reduced Medicare fee-for-service (FFS) payments for noninvasive cardiac tests (NCTs) performed in provider-based office settings (ambulatory offices not administratively affiliated with hospitals) starting in 2005. Contemporaneously, payments for hospital-based outpatient testing increased. The association between differential payments by site and test location is unknown. <h3>Objectives</h3> To quantify trends in differential Medicare FFS payments for NCTs performed in hospital-based and provider-based settings, determine the association between the hospital-based outpatient testing to provider-based office testing payment ratio and the proportion of hospital-based NCTs, and to examine trends in test location between Medicare FFS and 3 Medicare Advantage health maintenance organizations for which Centers for Medicare &amp; Medicaid Services payments do not depend on testing location. <h3>Design, Setting, and Participants</h3> This observational claims-based study used Medicare FFS claims from 1999 to 2015 (5% random sample) and Medicare Advantage claims from 3 large health maintenance organizations (2005-2015) among Medicare FFS beneficiaries aged 65 years or older and a health maintenance organization control group. Statistical analysis was performed from May 1, 2017, to July 15, 2019. <h3>Exposures</h3> The weighted mean payment ratio of Medicare FFS hospital-based outpatient testing to provider-based office testing for outpatient NCTs. <h3>Main Outcomes and Measures</h3> Proportion of outpatient NCTs performed in the hospital-based setting and Medicare FFS costs. <h3>Results</h3> The data included a mean of 1.72 million patient-years annually in Medicare FFS (mean age, 75.2 years; 57.3% female in 2015) and a mean of 142 230 patient-years annually in the managed care control group (mean age, 74.8 years; 56.2% female in 2015). The Medicare payment ratio of FFS hospital-based outpatient testing to provider-based office testing increased from 1.05 in 2005 to 2.32 in 2015. The FFS hospital-based outpatient testing proportion increased from 21.1% in 2008 to 43.2% in 2015 and was correlated with the payment ratio (correlation coefficient with a 1-year lag, 0.767;<i>P</i> &lt; .001). In contrast, the hospital-based outpatient testing proportion for the control group declined from 16.6% in 2008 to 15.2% in 2015 (correlation coefficient, –0.024,<i>P</i> = .95). The estimated extra costs owing to tests shifting to the hospital-based outpatient setting in the Medicare FFS group was $661 million in 2015, including $161 million in patient out-of-pocket costs. <h3>Conclusions and Relevance</h3> In settings in which reimbursement depends on test location, increasing hospital-based payments correlated with greater proportions of outpatient NCTs performed in the hospital-based outpatient setting. Site-neutral payments may offer an incentive for testing to be performed in the more efficient location.