Federal Register / Vol. 65, No. 69 / Monday, April 10, 2000 / Proposed Rules
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1 Federal Register / Vol. 65, No. 69 / Monday, April 10, 2000 / Proposed Rules TABLE 2. STATISTICAL PERFORMANCE OF POTENTIAL RUG III REFINEMENTS MODEL DESCRIPTION Model description Number of groups R-squared validation sample (test sample) Ancillary charges (percent) Total costs (percent) Min/Max δ Specificity and sensitivity analyses validation sample Specificity (percent) Sensitivity RUG III (CMI changes only) (6.5) RUG III (version 2001) RUG III with new category Extensive Services and Rehabilitation. (8.3) WIM 1 Weighted index model applied to Extensive Services (includes new category Extensive Services and Rehabilitation ). WIM 2 Weighted index model applied to Extensive Services beneficiaries (includes new category Extensive Services and Rehabilitation ) and to Rehabilitation, Special Care, and Clinically Complex. UWIM Unweighted index model applied to Extensive Services (includes new category Extensive Services and Rehabilitation ) and to Rehabilitation, Special Care, and Clinically Complex. 58 plus a six-group ancillary add-on system. 58 plus a six-group ancillary add-on system. 58 plus a four-group ancillary add-on system (12.5) 13.4 (14.2) 10.9 (12.6) 11.0 (11.2) 13.7 (13.7) 16.8 (17.6) 19.0 (19.4) 17.1 (18.0) 111/ % 116/ / % 111/ % 104/ % Notes: : Predicted total costs for the lowest and highest reimbursed groups in the refined case mix system. : Note that all index model-based refinements also include the Extensive Services and Rehabilitation category. : Specificity is measured as the proportion of beneficiaries who are not in the top 10 percent of predicted ancillary charges and also not in the top 10 percent in terms of actual ancillary charges. : Sensitivity is measured as the proportion of beneficiaries in the top 10 percent in terms of both predicted and actual ancillary charges. Data sources: Medicare claims, Minimum Data Set RUG III (proposed, version 2001): Adding the new Extensive Services and Rehabilitation categories resulted in small improvements in statistical performance. The validation sample R-squared increased to 7.8 percent for ancillary charges, an increase of about 2 percent relative to RUG III, and to 13.7 percent for total costs. However, the improvements associated solely with a change in the RUG III (proposed, version 2001) methodology were substantially less than those produced by the other potential refinements that incorporated a combination of RUG III and index model-based refinements. In conducting this analysis, new CMIs had to be constructed. For this research, the CMIs were developed from the same 1995 through 1997 staff time measurement studies that were used to construct the indices used under the current RUG III methodology. (See Table 3) 3. Weighted Index Model (WIM1): Under WIM1, Extensive Services beneficiaries (including those in the new Extensive Services and Rehabilitation categories) would receive an ancillary add-on based on the beneficiary s predicted, per diem ancillary costs for the index model qualifiers. The ancillary index has 6 groups with break points at costs at the 50th percentile or below, from the 51st through 75th percentile, from the 76th through 90th percentile, from the 91st through 95th percentile, from the 96th through 98th percentile, and the 99th percentile. The break points were calculated separately for each level of the RUG III hierarchy. Application of WIM1 resulted in some improvement relative to RUG III (proposed, version 2001). For the validation sample, the model accounted for 11 percent of the variance in ancillary charges and 17 percent of the variance in total costs. Nearly 32 percent of beneficiaries in the top 10 percent of ancillary charges were also in the top 10 percent in terms of predicted costs, compared to 27.8 percent for RUG III (proposed, version 2001). 4. Weighted Index Model 2 (WIM2): Model WIM2 extends the use of the non-therapy ancillary index to 40 RUG III (proposed, version 2001) groups (14 Rehabilitation/ Extensive Services, 3 Extensive Services, 14 Rehabilitation, 3 Special Care and 6 Clinically Complex groups), and accounted for 19 percent of the variance in total costs and 13 percent of the variance in ancillary charges. This was more than twice the R- squared of the existing RUG III or the proposed RUG III (version 2001) alone. The range of payments was similar to that of WIM1. Using WIM2, 32 percent of beneficiaries in the top 10 percent in terms of actual ancillary charges were also in the top 10 percent in terms of predicted ancillary charges. Table 4 shows the distribution of Medicare beneficiaries in the 6 non-therapy ancillary index levels by RUG III (proposed version 2001) category. The cut-off points used to define these groups are the same as for WIM1. BILLING CODE U VerDate 20<MAR> :49 Apr 07, 2000 Jkt PO Frm Fmt 4701 Sfmt 4702 E:\FR\FM\10APP4.SGM pfrm03 PsN: 10APP4
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5 Federal Register / Vol. 65, No. 69 / Monday, April 10, 2000 / Proposed Rules In the Regulatory Impact Analysis, we showed the distributional impact of these case mix refinements using the UWIM model proposed in this rule. Table 6 shows the distributional shifts of beneficiaries between the existing RUG-III model and the WIM2 Option. In addition, Tables 6.1 and 6.2 show the projected rates using the WIM2 model. (See Table 12 in the Proposed rule for the UWIM model.) 5. Unweighted Index Model (UWIM): This model is the unweighted counterpart to WIM2. While this model performed better than the current RUG-III and proposed RUG- III (version 2001) models, it was slightly outperformed by WIM2. However, we regard the unweighted model as preferable to WIM2, for two reasons. First, it is relatively simple, and employs a more familiar methodology similar to that used in classifying beneficiaries into the Extensive Services groups. Second, in developing the weighted models, the researchers had to rely more heavily on imputed data to develop the number of index levels, and the cut-off points. Therefore, even though the WIM models appear to have slightly more predictive power, they are based upon more subjective criteria. However, the WIM models are subject to additional testing using the full PPS data base, and, based on the results, this model may be reconsidered. UWIM accounted for 11 percent of the variance in ancillary charges and 17 percent of the variance in total costs. The sensitivity and specificity of the model were slightly less than for WIM2. Using UWIM, beneficiaries are split into four groups based on the number of index model variables present. Number of qualifiers Ancillary level or more... 5 Table 5 shows the distribution of Medicare beneficiaries in the 4 non-therapy ancillary index levels by RUG III (proposed, version 2001) category. BILLING CODE U VerDate 20<MAR> :49 Apr 07, 2000 Jkt PO Frm Fmt 4701 Sfmt 4702 E:\FR\FM\10APP4.SGM pfrm03 PsN: 10APP4
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