Institutional Affiliation: Rensselaer Polytechnic Institute
|How do Hospitals Respond to Payment Incentives?|
with , : w26455
A literature has found that medical providers inflate bills and report more conditions given financial incentives. We evaluate whether Medicare reimbursement incentives are driven more by bill inflation or coding costs. Medicare reformed its payment mechanism for inpatient hospitalizations in 2007, increasing coding costs. We first examine whether increased extra reimbursements from reporting more diagnoses lead hospitals to report more high bill codes. We find that increases in reimbursements within narrow patient groups led to more high bill codes before 2007 but not after. Using the payment reform, we then test for costly coding by comparing hospitals that adopted electronic medical records (EMRs) to others. Adopters reported relatively more top bill codes from secondary diagnoses after...
|Does Health IT Adoption Lead to Better Information or Worse Incentives?|
with , : w22873
We evaluate whether hospital adoption of electronic medical records (EMRs) leads to increases in billing where financial gains are large or where hassle costs of complete coding are low. The 2007 Medicare payment reform varied both financial incentives and hassle costs of coding. We find no significant impact of financial incentives on billing levels, inconsistent with bill inflation. However, the reform led to increases in reported severity for medical relative to surgical patients at EMR hospitals, consistent with EMRs decreasing coding costs for medical patients. Greater post-reform completeness of coding with EMRs may increase Medicare costs by $689.6 million annually.