Association Between Medicare Site-Based Payment Policy, Physician Practice Characteristics, and Vertical Integration Among Oncologists

Hospitals
Physicians
Vertical integration

Xin Hu, Ian McCarthy, Robin Yabroff, Wen You, Joseph Lipscomb, and Ilana Graetz. 2024. “Association Between Medicare Site-Based Payment Policy, Physician Practice Characteristics, and Vertical Integration Among Oncologists,” Journal of Clinical Oncology: Oncology Practice (online ahead of print). doi: 10.1200/op.24.00091

Authors
Affiliations

Department of Public Health Services, University of Virginia

Department of Economics, Emory University

Robin Yabroff

American Cancer Society

Wen You

Department of Public Health Services, University of Virginia

Joseph Lipscomb

Rollins School of Public Health, Emory University

Ilana Graetz

Rollins School of Public Health, Emory University

Published

July 2024

Doi

Abstract

Purpose: Medicare’s differential payments for services delivered in physician offices versus hospital outpatient settings incentivize hospital-physician integration (ie, vertical integration) across many specialties, but evidence for oncologists is mixed. We examined the association of Medicare site-based payment policy and physician practice characteristics, including service volume and diversity, with vertical integration among oncologists in 2013-2019.

Methods: Using the Medicare Provider Utilization and Payment Data and Medicare Data on Provider Practice and Specialty in 2013-2019, we extracted nonintegrated medical/hematologic oncologists (hereafter oncologists) in 2013 and followed them through 2019. We quantified the incentives from Medicare site-based payment policy using the hospital-office ratio-total Medicare payments if all services were delivered in the hospital outpatient department (HOPD) versus physician office. Vertical integration was defined as billing >10% of services to HOPD in a year. Multivariable linear probability regressions estimated the association between hospital-office ratio and vertical integration in 2014-2019 with and without accounting for provider characteristics.

Results: In 2013, the average hospital-office ratio was 1.63, which increased to 1.99 in 2018. A 25th-to-75th percentile increase in the hospital-office ratio was negatively associated with integration (-1.01 percentage points [ppts], 95% CI = -1.45 to -0.57, p < .001) not accounting for physician practice characteristics; this association was attenuated (-0.30 ppts, 95% CI = -0.67 to 0.07, p = .11) after adjusting for these characteristics. Higher baseline (ie, 2013) service volume (Quartile4 v Quartile1 = -3.00 ppts, 95% CI = -4.42 to -1.59, p < .001), more diverse services (Quartile4 v Quartile1 = -3.55 ppts, 95% CI = -4.97 to -2.13, p < .001), and urban location (-5.23 ppts, 95% CI = -6.89 to -3.57, p < .001) were more strongly associated with vertical integration.

Conclusion: Compared to Medicare site-based payment policy, oncologists’ practice characteristics emerged as more potent factors for integration and should be considered to ensure the intended impacts of site-based payment reform. Our finding raises questions about the effectiveness of ongoing movements toward site-neutral payment for drug administration services to deter vertical integration in oncology.

Citation

 Add to Zotero

@article{xin-etal-op2024,
    Author = {Xin Hu and Ian McCarthy and Robin Yabroff and Wen You and Joseph Lipscomb and Ilana Graetz},
    Doi = {10.1200/op.24.00091},
    Journal = {JCO Ongology Practice},
    Title = {Association Between Medicare Site-Based Payment Policy, Physician Practice Characteristics, and Vertical Integration Among Oncologists},
    Year = {2024}}