Association Between the Proportion of Black Patients Cared for at Hospitals and Financial Penalties Under Value-Based Payment Programs | Health Disparities | JAMA | JAMA Network
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Figure.  Hospitals Receiving Penalties From Value-Based Programs
Hospitals Receiving Penalties From Value-Based Programs

The proportion of hospitals that have a high proportion of Black patients compared with other hospitals that were penalized by 0, 1, 2, or all 3 Centers for Medicare & Medicaid Services’ hospital value-based programs (Hospital Value-Based Purchasing Program, Hospital Readmissions Reduction Program, Hospital-Acquired Condition Reduction Program) in fiscal year 2019. Hospitals that participated in all 3 programs were included in the analysis. Overall, 127 of 542 high-proportion Black hospitals and 275 of 2239 other hospitals were penalized by all 3 programs (23.4% vs 12.3%; P < .001). In contrast, 17 of 542 high-proportion Black hospitals and 186 of 2239 other hospitals received no penalties (3.1% vs 8.3%; P < .001)

Table.  Value-Based Payment Adjustments for Hospitals With a High Proportion of Black Patients vs Other Hospitals
Value-Based Payment Adjustments for Hospitals With a High Proportion of Black Patients vs Other Hospitals
1.
Himmelstein  G, Himmelstein  KEW.  Inequality set in concrete: physical resources available for care at hospitals serving people of color and other US hospitals.   Int J Health Serv. 2020;50(4):363-370. doi:10.1177/0020731420937632PubMedGoogle ScholarCrossref
2.
Joynt Maddox  KE, Reidhead  M, Qi  AC, Nerenz  DR.  Association of stratification by dual enrollment status with financial penalties in the Hospital Readmissions Reduction Program.   JAMA Intern Med. 2019;179(6):769-776. doi:10.1001/jamainternmed.2019.0117PubMedGoogle ScholarCrossref
3.
Joynt  KE, Jha  AK.  Characteristics of hospitals receiving penalties under the Hospital Readmissions Reduction Program.   JAMA. 2013;309(4):342-343. doi:10.1001/jama.2012.94856PubMedGoogle ScholarCrossref
4.
Khullar  D, Schpero  WL, Bond  AM, Qian  Y, Casalino  LP.  Association between patient social risk and physician performance scores in the first year of the merit-based incentive payment system.   JAMA. 2020;324(10):975-983. doi:10.1001/jama.2020.13129PubMedGoogle ScholarCrossref
5.
Bassett  MT, Galea  S.  Reparations as a public health priority—a strategy for ending Black-White health disparities.   N Engl J Med. 2020;383(22):2101-2103. doi:10.1056/NEJMp2026170PubMedGoogle ScholarCrossref
6.
Chaiyachati  KH, Qi  M, Werner  RM.  Changes to racial disparities in readmission rates after Medicare’s Hospital Readmissions Reduction Program within safety-net and non–safety-net hospitals.   JAMA Netw Open. 2018;1(7):e184154. doi:10.1001/jamanetworkopen.2018.4154PubMedGoogle Scholar
Research Letter
March 23/30, 2021

Association Between the Proportion of Black Patients Cared for at Hospitals and Financial Penalties Under Value-Based Payment Programs

Author Affiliations
  • 1Richard A. and Susan F. Smith Center for Outcomes Research, Beth Israel Deaconess Medical Center, Boston, Massachusetts
  • 2Cardiovascular Division, Washington University School of Medicine in St Louis, St Louis, Missouri
  • 3Associate Editor, JAMA
JAMA. 2021;325(12):1219-1221. doi:10.1001/jama.2021.0026

Over the last decade, the Centers for Medicare & Medicaid Services (CMS) has implemented national value-based payment programs that aim to incentivize hospitals to deliver higher quality of care. Black adults face systemic barriers in health care access and often receive care at a limited set of underresourced hospitals.1 Although recent changes have been made to some value-based programs to reduce the burden of penalties on safety-net hospitals that serve low-income patients,2-4 whether these initiatives disparately affect hospitals that care for a high proportion of Black patients remains unclear.

Therefore, we evaluated whether hospitals that care for a high proportion of Black patients are more likely than other hospitals to be penalized by value-based programs.

Methods

We identified all hospitals that participated in the Hospital Value-Based Purchasing Program (HVBP), Hospital Readmission Reduction Program (HRRP), or Hospital-Acquired Condition Reduction Program (HACRP) in fiscal year 2019 (eAppendix in the Supplement).3 To identify hospitals’ penalty-bonus status and the magnitude of these payment adjustments under each program, we used CMS Hospital Compare. We determined the proportion of Medicare hospitalizations for Black patients using MedPAR files (2015-2018)—institutions in the highest quintile were categorized as high-proportion Black hospitals. The American Hospital Association and CMS Impact Files (2018) were used to determine hospitals’ characteristics and safety-net status (eAppendix in the Supplement).

We calculated the proportion of high-proportion Black hospitals and other hospitals that received a penalty (or bonus) under each value-based payment program. We then determined the adjusted difference between these proportions using multivariable logistic regression, adjusting for hospital characteristics (bed size, teaching status, urban vs rural) and safety-net status. The mean payment adjustment was also determined. Comparisons were performed using 2-sided t tests or χ2 tests. A 2-sided P < .05 defined statistical significance. Analyses were performed using R version 3.5.2. Institutional review board approval was not required by Beth Israel Deaconess Medical Center because the study used publicly available data.

Results

There were 3288 hospitals that received a payment adjustment in at least 1 value-based program (HVBP, 2786; HACRP, 3227; HRRP, 3173) in fiscal year 2019. The 658 hospitals classified as high-proportion Black accounted for 59.3% of all Medicare discharges for Black adults. High-proportion Black hospitals compared with other hospitals were more likely to be large (≥400 beds; 24.9% vs 11.7%; P < .001), teaching institutions (58.5% vs 42.8%; P < .001), urban (81.2% vs 72.3%; P < .001), and safety-net institutions (48.0% vs 18.9%; P < .001).

After adjustment for hospital characteristics, high-proportion Black hospitals were more likely than other hospitals to be penalized by the HVBP (55.7% vs 41.3%; adjusted difference, 8.0%; 95% CI, 2.9%-13.2%; P = .002) and less likely to receive a bonus (44.3% vs 58.7%; adjusted difference, −8.0%; 95% CI, −13.2% to −2.9%; P = .002) (Table). The overall mean payment adjustment differed between high-proportion Black hospitals and other hospitals (−0.02% vs 0.21%; P < .001). High-proportion Black hospitals were also more likely to be penalized by the HACRP (31.5% vs 22.9%; adjusted difference, 9.5%; 95% CI, 5.3%-13.8%; P < .001) and the HRRP (87.7% vs 80.5%; adjusted difference, 4.8%; 95% CI, 1.1%-8.5%; P = .01). The overall mean payment adjustment under the HRRP was similar for high-proportion Black hospitals and other hospitals (−0.57% vs −0.58%; P = .71). High-proportion Black hospitals were more likely to be penalized by all 3 programs (23.4% vs 12.3%; P < .001) (Figure).

Discussion

Hospitals that care for a high proportion of Black adults were penalized more frequently by CMS value-based programs than other hospitals in 2019, even after accounting for safety-net status. These institutions were also more likely to receive penalties from all 3 federal programs.

Black individuals face structural and systemic barriers in access to high-quality care, in part because of redlining and other policies that have historically restricted Black persons to lower-income communities.5 High-proportion Black hospitals are more likely to be underresourced and have lower operating margins.1 If value-based programs unintentionally result in disparate penalties being imposed on these institutions, their ability to improve care may be hampered and racial disparities in outcomes widened.6

A limitation of this study is that high-proportion Black hospitals were defined using Medicare hospitalizations.

To promote equity, policy makers could consider modifying value-based programs to alleviate penalties on high-proportion Black hospitals.

Section Editor: Jody W. Zylke, MD, Deputy Editor.
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Article Information

Accepted for Publication: January 1, 2021.

Corresponding Author: Rishi K. Wadhera, MD, MPP, Richard A. and Susan F. Smith Center for Outcomes Research in Cardiology, Beth Israel Deaconess Medical Center, 375 Longwood Ave, Fourth Floor, Boston, MA 02215 (rwadhera@bidmc.harvard.edu).

Author Contributions: Drs Aggarwal and Wadhera had full access to all of the data in the study and take responsibility for the integrity of the data and the accuracy of the data analysis.

Concept and design: Aggarwal, Wadhera.

Acquisition, analysis, or interpretation of data: All authors.

Drafting of the manuscript: Aggarwal, Wadhera.

Critical revision of the manuscript for important intellectual content: All authors.

Statistical analysis: Aggarwal, Wadhera.

Obtained funding: Wadhera.

Administrative, technical, or material support: Hammond.

Supervision: Yeh.

Conflict of Interest Disclosures: Dr Joynt Maddox reported receiving grants from the National Heart, Lung, and Blood Institute, the National Institute on Aging, and the Commonwealth Fund and performing prior contract work for the US Department of Health and Human Services. Dr Yeh reported receiving research support from the National Heart, Lung, and Blood Institute and the Richard A. and Susan F. Smith Center for Outcomes Research in Cardiology; personal fees from Biosense Webster; and grants and personal fees from Abbott Vascular, AstraZeneca, Boston Scientific, and Medtronic. Dr Wadhera reported serving as a consultant for Regeneron. No other disclosures were reported.

Funding/Support: This study was supported by grant K23HL148525 from the National Heart, Lung, and Blood Institute, National Institutes of Health.

Role of the Funder/Sponsor: The National Heart, Lung, and Blood Institute had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication.

Disclaimer: Dr Joynt Maddox was not involved in any of the decisions regarding review of the manuscript or its acceptance.

References
1.
Himmelstein  G, Himmelstein  KEW.  Inequality set in concrete: physical resources available for care at hospitals serving people of color and other US hospitals.   Int J Health Serv. 2020;50(4):363-370. doi:10.1177/0020731420937632PubMedGoogle ScholarCrossref
2.
Joynt Maddox  KE, Reidhead  M, Qi  AC, Nerenz  DR.  Association of stratification by dual enrollment status with financial penalties in the Hospital Readmissions Reduction Program.   JAMA Intern Med. 2019;179(6):769-776. doi:10.1001/jamainternmed.2019.0117PubMedGoogle ScholarCrossref
3.
Joynt  KE, Jha  AK.  Characteristics of hospitals receiving penalties under the Hospital Readmissions Reduction Program.   JAMA. 2013;309(4):342-343. doi:10.1001/jama.2012.94856PubMedGoogle ScholarCrossref
4.
Khullar  D, Schpero  WL, Bond  AM, Qian  Y, Casalino  LP.  Association between patient social risk and physician performance scores in the first year of the merit-based incentive payment system.   JAMA. 2020;324(10):975-983. doi:10.1001/jama.2020.13129PubMedGoogle ScholarCrossref
5.
Bassett  MT, Galea  S.  Reparations as a public health priority—a strategy for ending Black-White health disparities.   N Engl J Med. 2020;383(22):2101-2103. doi:10.1056/NEJMp2026170PubMedGoogle ScholarCrossref
6.
Chaiyachati  KH, Qi  M, Werner  RM.  Changes to racial disparities in readmission rates after Medicare’s Hospital Readmissions Reduction Program within safety-net and non–safety-net hospitals.   JAMA Netw Open. 2018;1(7):e184154. doi:10.1001/jamanetworkopen.2018.4154PubMedGoogle Scholar
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