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Author Notes:

Kenton J. Johnston, PhD, Department of Health Management and Policy, Center for Outcomes Research, College for Public Health and Social Justice, St Louis University, 3545 Lafayette Ave, Room 362, St Louis, MO 63104 , johnstonkj@slu.edu

Dr Johnston had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.

Study concept and design: All authors; Acquisition, analysis, or interpretation of data: Johnston, Wen, Joynt Maddox; Drafting of the manuscript: Johnston, Joynt Maddox; Critical revision of the manuscript for important intellectual content: All authors; Statistical analysis: Johnston, Wen, Hockenberry; Obtained funding: Johnston; Administrative, technical, or material support: Johnston.

We thank Julia Clarke of St Louis University for providing assistance on the literature review; Ms Clarke’s contributions were completed as part of her research assistantship at Saint Louis University, for which she received compensation.

Dr Johnston had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.


Research Funding:

St Louis University purchased and provided access to the data used in this study.

Dr Joynt Maddox is supported by grant K23-HL109177-03 from the National Heart, Lung, and Blood Institute (NHLBI).


  • Science & Technology
  • Life Sciences & Biomedicine
  • Medicine, General & Internal
  • General & Internal Medicine
  • RISK

Association Between Patient Cognitive and Functional Status and Medicare Total Annual Cost of Care Implications for Value-Based Payment

Journal Title:

JAMA Internal Medicine


Volume 178, Number 11


, Pages 1489-1497

Type of Work:

Article | Final Publisher PDF


Importance: Medicare is moving toward value-based payment. The Merit-Based Incentive Payment System (MIPS) program judges outpatient clinicians' performance on a measure of annual Medicare spending. However, this measure may disadvantage outpatient clinicians who care for vulnerable populations because the algorithm omits meaningful determinants of cost. Objectives: To determine whether factors not included in Medicare risk adjustment, including patient neuropsychological and functional status, as well as local area health resources and economic conditions, are associated with Medicare total annual cost of care (TACC), and evaluate whether accounting for these factors is associated with improved TACC performance by outpatient safety-net clinicians. Design, Setting, and Participants: In this retrospective observational study, we used the Medicare Current Beneficiary Survey (MCBS) to examine patient-reported neuropsychological and functional status and the Area Health Resources File to obtain information on local area characteristics. Included were Medicare beneficiaries with annual physician or clinic visits to outpatient safety-net (federally qualified health centers and rural health clinics) and non-safety-net clinics, contributing 76927 person-years of data to the MCBS from 2006 through 2013. We used patient-level multivariable regression models to estimate the association between each factor and annual Medicare spending, and compared outpatient safety-net performance under current risk adjustment and after adding additional adjustment for these factors. Main Outcomes and Measures: Medicare TACC, measured as the total annual reimbursed amount per patient for Medicare Part A and Part B services, in all categories. Results: Our study included 111414 unique identifiable physicians, and the final weighted sample included 213904324 patient-years (unweighted, 76927 patient-years) from 30058 unique patients, of whom 17478 (58.1%) were women. The mean (SD) patient age was 71.84 (12.48) years. The mean TACC was $9117. Those with higher than mean TACC included beneficiaries with depression ($14436), dementia ($18311), and difficulty with 3 or more activities of daily living (ADLs, $19113) or instrumental ADLs ($17443). After adjusting for comorbidities, depression and dementia were still associated with $2740 (95% CI, $2200-$2739) and $2922 (95% CI, $2399-$3445) higher TACC, respectively. Difficulty with 3 or more ADLs ($3121 higher; 95% CI, $2633-$3609) or instrumental ADLs ($895 higher; 95% CI, $452-$1337) was also associated with higher TACC. Adding these neuropsychological and functional factors, as well as local residence area factors, to risk adjustment calculations reduced outpatient safety-net clinicians' underperformance on Medicare TACC relative to non-safety-net clinicians by 52% (from 0.098 to 0.047 difference in the observed to expected ratio). Conclusions and Relevance: Neuropsychological and functional impairment are common in Medicare beneficiaries and are associated with increased annual Medicare spending. Failure to account for these factors may inappropriately penalize outpatient clinicians who care for these vulnerable groups, such as safety-net clinicians, for factors that are arguably beyond their control.

Copyright information:

© 2018 American Medical Association. All rights reserved.

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