Inpatient Utilization and Costs for Medicare Fee-for-Service Beneficiaries with Heart Failure

BACKGROUND: Although the medical and economic burden of heart failure in the United States is already substantial, it will likely grow as the population ages and life expectancy increases. Not surprisingly, most of the heart failure burden is borne by individuals aged >= 65 years, many of whom are in the Medicare population. The population-based utilization and costs of inpatient care for Medicare beneficiaries with heart failure are not well understood by payers and providers. OBJECTIVE: To create a real-world view of utilization and costs associated with inpatient admissions, readmissions, and admissions to skilled nursing facilities among Medicare fee-for-service (FFS) beneficiaries with heart failure. METHODS: The study used the 2011 and 2012 Medicare 5% sample limited data set to perform a retrospective analysis of claims data. The look-back year that was used to identify certain patient characteristics was 2011, and 2012 was the analysis period for the study. Beneficiaries with heart failure were defined as those who had >= 1 acute inpatient, emergency department, nonacute inpatient, or outpatient claims in 2012 containing an International Classification of Diseases, Ninth Revision code for heart failure. To be included in the study, beneficiaries with heart failure had to have eligibility for >= 1 months in 2012 and in all 2011 months, with Part A and Part B eligibility in all the study months, and no enrollment in an HMO (Medicare Advantage plan). Utilization of inpatient admissions, inpatient readmissions, and skilled nursing facility admissions in 2012 were reported for Medicare FFS beneficiaries with heart failure and for all Medicare FFS beneficiaries. The costs for key metrics included all allowed Medicare payments in 2012 US dollars. RESULTS: The 2012 Medicare FFS population for this study consisted of 1,461,935 patients (1,301,545 without heart failure; 160,390 with heart failure); the heart failure prevalence was 11%. The Medicare-allowed cost per member per month (PMPM) was $3395 for a patient with heart failure, whereas the allowed cost for the total Medicare population was $1045 PMPM. The Medicare-allowed amounts for the population with heart failure accounted for 34% of the total annual Medicare FFS population-allowed amounts. The heart failure population constituted 41.5%, 55.3%, and 49.5% of total Medicare FFS inpatient admissions, readmissions, and admissions to skilled nursing facilities, respectively. The costs of inpatient admissions, readmissions, and admissions to skilled nursing facilities among the heart failure population contributed $182 PMPM (17.5%), $58 PMPM (5.6%), and $46 PMPM (4.4%), respectively, to the total Medicare FFS population-allowed cost of $1045 PMPM. CONCLUSIONS: Medicare FFS beneficiaries with heart failure have high inpatient admission and readmission rates and generate substantial costs. Because a substantial portion of all inpatient admissions are for Medicare beneficiaries with heart failure, it is reasonable for hospitals in Medicare accountable care organizations to focus on more aggressive post-acute care management, including a focus on reducing readmissions for the population with heart failure. Our study findings highlight areas of high service utilization and cost for Medicare patients with heart failure that can be of value to Medicare, Medicare Advantage plans, and providers.