Trends in Medicare Payment Rates for Noninvasive Cardiac Tests and Association With Testing Location.

Question What are the trends in Medicare payment rates for outpatient noninvasive cardiovascular tests, and are payment rates for hospital-based outpatient testing vs provider-based office testing associated with testing location? Findings In this study using the total number of Medicare claims from 1999 to 2015 (mean of 1.72 million patient-years annually), the hospital-based outpatient testing to provider-based office testing payment ratio for noninvasive cardiac tests increased from 1.05 in 2005 to 2.32 in 2015, an increase that was associated with the subsequent proportion of hospital-based testing in Medicare fee-for-service organizations but not in a comparison group of 3 health maintenance organizations (mean of 142230 patient-years annually). Meaning In settings in which reimbursement depends on test location, higher hospital-based vs practice-based payments were associated with greater proportions of outpatient noninvasive cardiac tests performed in hospital-based locations. This study using Medicare claims data examines trends in differential Medicare fee-for-service payments for noninvasive cardiac tests performed in hospital- and provider-based settings. Importance To control spending, the Centers for Medicare & 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. Objectives 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 & Medicaid Services payments do not depend on testing location. Design, Setting, and Participants 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. Exposures The weighted mean payment ratio of Medicare FFS hospital-based outpatient testing to provider-based office testing for outpatient NCTs. Main Outcomes and Measures Proportion of outpatient NCTs performed in the hospital-based setting and Medicare FFS costs. Results 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 142230 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; P < .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, P = .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. Conclusions and Relevance 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.