OCA, RAND outline new inpatient and outpatient hospital spending measures and data steps

The Office of Health Care Affordability on Wednesday unveiled a methodology to measure hospital inpatient and outpatient unit prices using hospital financial disclosures, HPD claims/encounter data and established intensity adjustments.

For inpatient services, OCA will calculate case‑mix adjusted discharges (CMAD) by multiplying inpatient discharges by a case‑mix index (CMI) from the patient discharge dataset and then dividing inpatient net patient revenue by CMAD to produce inpatient net patient revenue per CMAD.

For outpatient services, RAND and OCA described computing an Average Visit Intensity (AVI) from HPD claims by mapping procedure codes to Medicare Ambulatory Payment Classification (APC) weights. OCA will multiply hospital‑reported outpatient visits by AVI to create intensity‑adjusted outpatient visits, then divide outpatient revenue by those adjusted visit counts to yield outpatient net patient revenue per intensity‑adjusted visit.

RAND presented crosswalk work showing that nearly 97% of the comparable hospitals could be located in HPD for FY2020–22 and that the HPD sample included about 19.7 million outpatient visits for those hospitals, with roughly 12 million visits carrying APC weights usable for intensity calculations. RAND also reported a strong correlation between facility‑level commercial AVI and all‑payer AVI (correlation ≈ 0.94) and similarly strong correlation for inpatient CMI (≈ 0.93), findings staff said support payer‑specific intensity adjustments despite variable HPD coverage.

The board and hospital representatives raised concerns about variability in how hospitals count outpatient visits on the annual financial reports and about lower representation of commercial outpatient visits in HPD at some facilities. OCA said it will post a facility‑to‑NPI crosswalk, ask hospitals to verify mapped NPIs, examine hospitals with small HPD samples directly, and reconvene the hospital spending workgroup in spring to present additional validation analyses.

OCA will publish both a volume‑only outpatient measure and a volume‑plus‑intensity outpatient measure at the facility level to illustrate the effect of the intensity adjustment. Staff emphasized that the outpatient methodology will initially be reported as a standalone measure; the office will later evaluate whether to combine inpatient and outpatient measures for enforcement.