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Patients with Undermanaged RA Have Higher Medicare Costs than Other RA Patients

Summary

Avalere analysis finds that Medicare fee-for-service (FFS) patients with an RA diagnosis and conditions associated with undermanaged disease have 121% higher medical costs than other RA patients. Part D costs were 30% higher for those with undermanaged disease than for other RA patients.

Avalere conducted an analysis to compare total all-cause costs of care for patients with rheumatoid arthritis (RA) who are undermanaged relative to all other RA patients. For purposes of this analysis, patients with undermanaged RA are defined as those who received Darrach’s procedure, received metacarpophalangeal (MCP) joint reconstruction, or were diagnosed with corneal scleritis or scleromalacia perforans at any point in 2018. Among the RA patients in our analysis, Avalere identified 1,311 RA patients with evidence of medical complexities associated with undermanaged RA. The utilization and cost analyses were conducted for any Medicare beneficiary with an RA diagnosis who was enrolled in FFS Medicare Part A or B in 2018. Uncontrolled disease activity or inflammation increases the risk for irreversible joint damage and extra-articular manifestations. The mix of conditions and procedures identified may indicate potential disruptions in continuity of patients’ care or the severity of their underlying chronic disease. These diagnoses and procedures increase patient costs, require additional healthcare resources, and increase the need for care coordination.

Comparative Costs of Care

RA patients identified as undermanaged incurred substantially higher costs than all other RA patients. These higher costs were largely driven by higher utilization of hospital and physician services. Outpatient pharmacy drug costs covered under the Part D program were also significantly higher. While the majority of the higher costs for unmanaged RA patients are paid for by the federal government, patients may also experience higher out-of-pocket costs.

Average Medicare Part A and B costs for patients with undermanaged disease were 121% higher than average medical costs for all other RA patients. Hospital outpatient services were a large driver of increased cost for patients with undermanaged disease costing 240% more than all other RA patients. Additionally, physician and supplier services were also significantly more costly for patients with undermanaged disease, 124% higher than all other RA patients.

Table 1. Average Per Capita Annual Costs for RA Patients for Services Covered Under Parts A and B, 2018
RA Patients with Undermanaged Disease
(N=1,311)
All Other RA Patients
(N=1,057,903)
Hospital Inpatient $4,660 $3,077
Hospital Outpatient $8,710 $2,564
Physician/Supplier Services $10,940 $4,893
Other Medical Services $1,480 $1,119
All Medical Services $25,790 $11,652

Note: Results rounded to the nearest $10.

Comparative Pharmacy Benefit Drug Costs

On average per person with Part D utilization, undermanaged RA patients enrolled in Part D plans incurred over $11,000 in Part D drug costs compared to approximately $8,600 for all other RA patients in 2018. Average total costs in Part D for RA patients with undermanaged disease were 30% higher than all other RA patients.

Table 2. Average Annual Costs for RA Patient for Drugs Covered Under Part D, 2018
RA Patients with Undermanaged Disease
(N=1,044)
All Other RA Patients
(N=808,492)
Total Drug Costs $11,230 $8,639

Note: Results rounded to the nearest $10.

Policymakers and healthcare stakeholders have long sought to improve care and reduce costs for patients with chronic conditions, including RA. This analysis underscores the financial impact of undermanaged disease to the Medicare program.

Methodology

Avalere used 2018 Medicare FFS claims data for Part A, Part B, and Part D (both standalone Prescription Drug Plans and Medicare Advantage Prescription Drug Plan) under a Centers for Medicare & Medicaid Services research data use agreement. Avalere identified all Medicare FFS beneficiaries with RA as either the primary or secondary diagnosis on any claim during the year. In consultation with National Infusion Center Association (NICA), beneficiaries that were undermanaged were identified as those who received Darrach’s procedure, received MCP joint reconstruction, or were diagnosed with corneal scleritis or scleromalacia perforans at any point during the year. All other RA patients were considered as a second category.

Avalere analyzed healthcare costs and utilization across all settings: inpatient hospital, outpatient hospital, physician and other suppliers, durable medical equipment, home health, hospice, skilled nursing, and pharmacy. Part D costs include all costs paid by any stakeholder for all beneficiaries, including those who are enrolled in Employer Group Waiver Plans or are eligible for the Low-Income Subsidy. While all enrollees included in this analysis were enrolled in Part A or Part B (FFS) at some point during the year, not all beneficiaries were enrolled in Part D.

Avalere did not analyze enrollment, utilization, or costs for Medicare Advantage (Part C) plans.

Funding for this research was provided by NICA. Avalere Health retained full editorial control.

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