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Resources Used in Implantable Medical Device Procedures' which was 
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GAO-12-583R: 

United States Government Accountability Office: 
Washington, DC 20548: 

May 14, 2012:

The Honorable Orrin Hatch: 
Ranking Member: 
Committee on Finance: 
United States Senate: 

Subject: Medicare: Trends in Beneficiaries Served and Hospital 
Resources Used in Implantable Medical Device Procedures:

Dear Senator Hatch:

The use of implantable medical devices (IMD) among Medicare 
beneficiaries is widely recognized as a way to prolong and improve the 
quality of life for patients that receive them.[Footnote 1] In 2009, 
about 1.6 million IMD procedures were performed on beneficiaries under 
traditional, fee-for-service Medicare at a cost of roughly $20 
billion. Orthopedic and cardiac implantations--the most common IMD 
procedures provided to beneficiaries--accounted for nearly all IMD-
related Medicare spending in that year. With beneficiaries expected to 
live longer and innovations in IMD technology, the use of orthopedic 
and cardiac IMDs is likely to continue to have important implications 
for hospital services paid for by Medicare.

The number of hospital admissions for IMD procedures, the duration of 
hospital stays, and the location to which patients are discharged are 
influenced by such factors as age and health status. In that light, 
you expressed interest in obtaining descriptive information about 
changes in the demographics of Medicare beneficiaries undergoing major 
IMD procedures and their use of hospital and postacute care resources. 
In this report, we examined three trends for Medicare beneficiaries 
who received orthopedic or cardiac IMDs: (1) hospital admission rates, 
by age and health status; (2) hospital lengths of stay, by health 
status; and (3) discharge disposition following admission for these 
procedures, by health status.

Our review of orthopedic IMD procedures focused on those related to 
knees, hips, shoulders, and lumbar fusions. We defined knee, hip, and 
shoulder replacement procedures as stays where the procedure was a 
primary elective new total knee, total hip, or total shoulder 
replacement. We defined lumbar fusion procedures as stays where the 
procedure was a primary elective initial lumbar or lumbosacral fusion 
with a posterior technique.[Footnote 2],[Footnote 3] Our review of 
cardiac IMDs focused on procedures related to certain devices used to 
treat blocked coronary arteries--drug-eluting stents--or heart rhythm 
problems--automatic implantable cardioverter defibrillators (AICD) and 
dual-chamber pacemakers. The orthopedic IMD procedures we studied are 
nearly always performed in the hospital inpatient setting. However, 
procedures involving drug-eluting stents, AICDs, and dual-chamber 
pacemakers can be performed in either inpatient or outpatient 
settings. We focused only on inpatient trends in the use of cardiac 
IMDs. Further research on topics such as readmission rates[Footnote 4] 
and revisions[Footnote 5] would be needed to understand the full 
impact of orthopedic and cardiac IMD use patterns.

To examine trends for Medicare beneficiaries who received orthopedic 
or cardiac IMDs, we obtained hospital discharge data on individuals 
age 65 and over from the Healthcare Cost and Utilization Project 
(HCUP) Nationwide Inpatient Sample (NIS) files from 2003 through 2009. 
[Footnote 6],[Footnote 7] To calculate trends in Medicare hospital 
admission rates, we divided the number of inpatient IMD procedures 
performed on these individuals by the total number of Medicare Part B 
beneficiaries age 65 or over during the same period, as reported by 
the Centers for Medicare & Medicaid Services (CMS).[Footnote 8] We 
sorted beneficiaries into four age cohorts--65 to 69, 70 to 74, 75 to 
79, and 80 or older--and categorized beneficiary health status as good 
or fair, poor, or very poor based on the patient's condition at 
admission and other factors.[Footnote 9] To analyze trends in average 
lengths of stay, we excluded beneficiaries with hospital stays of zero 
days and outliers with exceedingly long stays. To examine trends in 
discharge disposition, we stratified beneficiaries into those 
discharged to home or self-care, to home for home health care, and to 
inpatient rehabilitative facilities, such as a skilled nursing 
facility (SNF) or an inpatient rehabilitation facility (IRF).[Footnote 
10] In addition, we reviewed relevant journal articles and CMS 
regulations. We determined that the data we used were sufficiently 
reliable for the purposes of our analysis by performing appropriate 
electronic data checks.

We conducted this performance audit from March 2011 to April 2012 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives.

Results in Brief:

Overall, orthopedic IMD admission rates were substantially higher in 
2009 compared with 2003, while admission rate patterns among cardiac 
IMDs were mixed. Admission rates rose for each of the orthopedic IMDs 
in our study, with knee replacement rates growing 6.7 percent per 
year. The picture for inpatient cardiac IMD procedures was more mixed; 
admission rates for dual-chamber pacemakers decreased steadily while 
rates for AICDs and drug-eluting stents increased through 2006 and 
generally declined thereafter, in part reflecting a shift of surgeries 
to the outpatient setting. While the proportion of both orthopedic and 
cardiac IMD beneficiaries in poor or very poor health grew throughout 
our period of study, this trend was far more evident for cardiac IMD 
beneficiaries after 2007.

Even with the increase in admissions of IMD beneficiaries in poorer 
health, overall lengths of stay for the IMD procedures we studied 
generally did not rise. Average lengths of stay for orthopedic IMD 
beneficiaries decreased from 2003 through 2009, while the lengths of 
stay for cardiac IMD beneficiaries fell through 2007 but increased 
thereafter. For all orthopedic IMD procedures in our study, lengths of 
stay declined during the period for beneficiaries in all reported 
health status groups. From 2003 through 2007, the average length of 
stay decreased among cardiac IMD beneficiaries in each health status 
group. From 2007 to 2009, average lengths of stay patterns varied by 
health status and specific cardiac IMD procedure.

Poorer health status and reductions in lengths of stay for inpatient 
IMD beneficiaries were not accompanied by an increase in discharges to 
rehabilitative facilities. Rather, the proportion of orthopedic IMD 
beneficiaries discharged to home health care increased substantially 
while the proportion discharged to a skilled nursing or rehabilitation 
facility dropped sharply. The discharge disposition pattern for 
cardiac IMD beneficiaries remained relatively stable throughout the 
study period, with a large majority of cardiac IMD beneficiaries 
discharged to home or self-care.

Background:

IMD Device Descriptions:

In 2009, procedures related to knees, hips, shoulders, and the spine 
accounted for 98 percent of Medicare's orthopedic IMD expenditures. 
Typically, hip, knee, and shoulder implants have a variety of 
components and are made up of different materials, which may be 
configured in various ways to make the total device. For example, for 
a hip replacement with four different components, there are several 
configurations and materials (metal, plastic, and ceramic) that can be 
used, as well as different ways to secure the implant (cemented in 
place or fitted into the bone with new bone growth to hold the implant 
in place). Lumbar fusion surgeries may involve many different IMDs; 
some of the most common IMDs used in lumbar fusions include screws, 
rods, cages, and bone morphogenetic protein (BMP).[Footnote 11]

In 2009, procedures involving pacemakers, AICDs, and stents 
represented most Medicare spending on cardiac IMD procedures. A 
pacemaker monitors a patient's underlying heart rhythm and delivers an 
electrical pulse to cause the heart to beat at the desired rate. An 
AICD is similar to the pacemaker in design, but it is capable of 
delivering a higher energy electrical pulse--called a defibrillation 
shock--to correct more serious, rapid, and sustained heart rhythm 
irregularities. A coronary stent is a wire mesh tube used to prop open 
a blocked coronary artery. Drug-eluting stents are coated with drugs 
that slowly release and are intended to help keep the artery open.

Medicare IMD Spending and Overall Lengths of Stay:

In Medicare's traditional fee-for-service program, spending on IMD 
procedures performed in the inpatient and outpatient settings has 
grown at the same rate as spending for other hospital services. 
[Footnote 12] As we previously reported, from 2004 through 2009, 
expenditures for IMD procedures rose from about $16 billion to about 
$20 billion, an increase of 4.3 percent per year--a rate equal to that 
of Medicare spending for other hospital care. Spending on orthopedic 
IMD procedures performed grew substantially faster than that for 
cardiac IMD procedures. From 2004 through 2009, Medicare hospital 
expenditures related to orthopedic IMD devices increased 8.1 percent 
per year, while expenditures related to cardiac IMD procedures 
increased 1.2 percent yearly.[Footnote 13]

A factor that contributes to Medicare inpatient spending is 
beneficiaries' length of stay. From 2003 through 2009, average 
hospital lengths of stay declined for Medicare beneficiaries overall. 
For instance, the average annual decrease in length of stay ranged 
from 0.6 percent to 7.0 percent for 10 hospital inpatient services 
that ranked among those with the highest number of non-IMD elective 
admissions in 2009. The proportion of beneficiaries admitted with poor 
or very poor health also increased for each of those 10 services from 
2003 to 2009.

Discharge Disposition after IMD Procedures:

After receiving an orthopedic or cardiac IMD, Medicare beneficiaries 
can be discharged home or to one of several postacute care settings. 
Numerous factors such as age, functional status, and whether the 
beneficiary lives alone can affect the decision about where a 
beneficiary is discharged. Those discharged to home or self-care 
require minimal postacute care or only need to receive services, such 
as physical therapy, on an outpatient basis. Other beneficiaries who 
are discharged home but require a higher, or more intense, level of 
postacute care may receive home health care services, such as 
intermittent skilled nursing and physical therapy. Orthopedic and 
cardiac IMD beneficiaries may also be discharged to inpatient 
facilities such as SNFs or IRFs for rehabilitation services. In 
general, the cost of postacute care is more expensive for individuals 
discharged to SNFs and IRFs than to home, with or without home health 
care or outpatient rehabilitation services.

Inpatient Admission Rates Increased Consistently across Orthopedic 
IMDs, but Varied across Cardiac IMDs; IMD Procedures for Beneficiaries 
in Poor or Very Poor Health Were Increasingly Common, a Trend More 
Pronounced Among Cardiac IMD Beneficiaries:

Admission Rates for Orthopedic IMD Procedures Increased Steadily:

* Admission rates for knee, hip, and shoulder replacements and lumbar 
fusion procedures increased steadily overall among Medicare 
beneficiaries from 2003 through 2009. (See figure 1.) 

- The admission rate for knee replacements, by far the most common 
orthopedic procedure of those we studied, rose substantially from 2003 
through 2009. The admission rate increased from 59 to 87 per 10,000 
beneficiaries, an average annual increase of 6.7 percent.

- The admission rate for hip replacements, the second most common 
orthopedic procedure studied, grew moderately over the study period. 
The admission rate increased from 29 to 37 per 10,000 beneficiaries, 
an average annual increase of 4.1 percent.

- Although shoulder replacements and lumbar fusions were far less 
common than knee or hip replacements, their admission rates grew most 
rapidly during the time period, with shoulder replacement and lumbar 
fusion admissions growing at annual rates of 20.1 percent and 11.0 
percent, respectively.

Figure 1: Medicare Admission Rates for Orthopedic Implantable Medical 
Devices, 2003-2009:

[Refer to PDF for image: multiple line graph] 

Admissions per 10,000 beneficiaries: 

Year: 2003; 
Total Knee Replacement: 59; 
Total Hip Replacement: 29; 
Lumbar Fusion: 8; 
Total Shoulder Replacement: 2. 

Year: 2004; 
Total Knee Replacement: 67; 
Total Hip Replacement: 33; 
Lumbar Fusion: 9; 
Total Shoulder Replacement: 3. 

Year: 2005; 
Total Knee Replacement: 75; 
Total Hip Replacement: 34; 
Lumbar Fusion: 10; 
Total Shoulder Replacement: 3. 

Year: 2006; 
Total Knee Replacement: 74; 
Total Hip Replacement: 31; 
Lumbar Fusion: 10; 
Total Shoulder Replacement: 4. 

Year: 2007; 
Total Knee Replacement: 81; 
Total Hip Replacement: 34; 
Lumbar Fusion: 11; 
Total Shoulder Replacement: 4. 

Year: 2008; 
Total Knee Replacement: 87; 
Total Hip Replacement: 37; 
Lumbar Fusion: 14; 
Total Shoulder Replacement: 5. 

Year: 2009; 
Total Knee Replacement: 87; 
Total Hip Replacement: 37; 
Lumbar Fusion: 15; 
Total Shoulder Replacement: 6. 

Source: GAO analysis of Healthcare Cost and Utilization Project 
Nationwide Inpatient Sample data. 

Note: We define Medicare admissions as those of individuals who are 
age 65 and over. 

[End of figure] 

* Increases in knee replacement surgeries have been attributed to 
changes in medical practice, enhanced awareness of the benefits of 
knee replacements, increased patient satisfaction rates, and an 
increasing prevalence of osteoarthritis, which in turn may be related 
to an increase in obesity rates.[Footnote 14]

- According to the National Institutes of Health, 85 percent of 
beneficiaries who undergo knee replacement surgery are satisfied with 
the results.[Footnote 15]

- The rate of obesity among Medicare beneficiaries who received a knee 
replacement was higher than those who received the other IMD 
procedures studied; they also experienced the largest increase in 
obesity rates over the time period.[Footnote 16]

* The nearly twofold increase in the admission rate for lumbar fusions 
may exemplify the role that new technology plays in IMD utilization. 
For example, from 2003 to 2009, the proportion of lumbar fusions 
performed with BMP, a relatively new technology, increased from 
approximately 7 percent to 40 percent of all such surgeries.[Footnote 
17]

Changes in Inpatient Admission Rates for Cardiac IMD Procedures 
Differed by Device:

* The trends in cardiac IMD inpatient admission rates were mixed over 
the study period. (See figure 2.) 

- Inpatient admission rates for drug-eluting stents increased rapidly 
from 2003 through 2006, declined sharply from 2006 through 2007, and 
remained flat thereafter. Rates for AICDs also increased through 2006 
and then declined, although both the increase and subsequent decline 
were much more moderate.

- In contrast, the rate of inpatient dual-chamber pacemaker admissions 
declined slowly and steadily.

Figure 2: Medicare Admission Rates for Cardiac Implantable Medical 
Devices, 2003-2009:

[Refer to PDF for image: multiple line graph] 

Admissions per 10,000 beneficiaries: 

Year: 2003; 
Drug-eluting stent: 33; 
Dual-chamber pacemaker: 33; 
AICD: 11. 

Year: 2004; 
Drug-eluting stent: 81; 
Dual-chamber pacemaker: 33; 
AICD: 12. 

Year: 2005; 
Drug-eluting stent: 96; 
Dual-chamber pacemaker: 32; 
AICD: 12. 

Year: 2006; 
Drug-eluting stent: 102; 
Dual-chamber pacemaker: 32; 
AICD: 13. 

Year: 2007; 
Drug-eluting stent: 61; 
Dual-chamber pacemaker: 31; 
AICD: 11. 

Year: 2008; 
Drug-eluting stent: 63; 
Dual-chamber pacemaker: 31; 
AICD: 10. 

Year: 2009; 
Drug-eluting stent: 61; 
Dual-chamber pacemaker: 30; 
AICD: 9. 

Source: GAO analysis of Healthcare Cost and Utilization Project 
Nationwide Inpatient Sample data. 

Note: We define Medicare admissions as those of individuals who are 
age 65 and over. 

[End of figure] 

* Decreases in the rates of cardiac IMD admissions were associated 
with beneficiaries receiving cardiac IMD procedures in the outpatient 
rather than the inpatient setting. Had the pattern of care not changed 
after 2006, it is likely that more beneficiaries would have been 
admitted to a hospital for a cardiac IMD procedure.

- As we previously reported, Medicare claims data indicated a general 
shift of cardiac IMD procedures from the inpatient to the outpatient 
setting from 2004 through 2009, with the largest growth in outpatient 
cardiac IMD procedures occurring from 2007 through 2009.[Footnote 18]

- This trend coincided with Medicare Recovery Audit contractors 
collecting overpayments for certain inpatient cardiac IMD procedures 
that could have been performed in the outpatient setting, possibly 
prompting other hospitals to change their admission patterns.[Footnote 
19] Generally, Medicare pays hospitals a relatively lower rate for the 
same procedure when it is delivered in the outpatient rather than the 
inpatient setting.

* In addition to the general shift to the outpatient setting, the 
significant decrease in inpatient drug-eluting stent admission rates 
from 2006 to 2007 may have resulted from a shift to the use of bare 
metal stents or a decline in overall stent utilization.

Admission Rates Rose across All Age Groups for All Orthopedic IMD 
Procedures and Drug-Eluting Stents but Fell for AICDs and Dual-Chamber 
Pacemakers:

* From 2003 through 2009, admission rates rose for all four orthopedic 
IMD procedures among every beneficiary age group. (See table 1.) 

- Rates for knee and hip replacements increased most rapidly for the 
youngest Medicare beneficiaries.

- In contrast, older Medicare beneficiaries exhibited the fastest 
growth in shoulder replacements and lumbar fusion procedures.

Table 1: Average Annual Percentage Growth in Medicare Beneficiary 
Admission Rates for Orthopedic IMD Procedures, by Age, 2003-2009:

Age: 65 to 69; 
Growth in admissions: 
Total knee replacement: 7.9%; 
Total hip replacement: 5.9%; 
Total shoulder replacement: 16.5%; 
Lumbar fusion: 12.2%.

Age: 70 to 74; 
Growth in admissions: 
Total knee replacement: 6.6%; 
Total hip replacement: 3.7%; 
Total shoulder replacement: 23.2%; 
Lumbar fusion: 11.3%.

Age: 75 to 79; 
Growth in admissions: 
Total knee replacement: 6.8%; 
Total hip replacement: 4.7%; 
Total shoulder replacement: 26.0%; 
Lumbar fusion: 11.2%.

Age: 80 or older; 
Growth in admissions: 
Total knee replacement: 5.8%; 
Total hip replacement: 3.2%; 
Total shoulder replacement: 26.0%; 
Lumbar fusion: 15.2%.

Source: GAO analysis of Healthcare Cost and Utilization Project 
Nationwide Inpatient Sample data.

Note: We define Medicare admissions as those of individuals who are 
age 65 and over. 

[End of table] 

* Across all age groups, inpatient admission rates for drug-eluting 
stents increased, while AICD and dual-chamber pacemaker rates declined 
during our study period. (See table 2.) 

Table 2: Average Annual Percentage Growth in Medicare Beneficiary 
Admission Rates for Cardiac IMD Procedures, by Age, 2003-2009:

Age: 65 to 69; 
Growth in admissions: 
Drug-eluting stent: 10.1%; 
AICD: -3.3%; 
Dual-chamber pacemaker: -1.3%.

Age: 70 to 74; 
Growth in admissions: 
Drug-eluting stent: 10.5%; 
AICD: -5.9%; 
Dual-chamber pacemaker: -3.0%.

Age: 75 to 79; 
Growth in admissions: 
Drug-eluting stent: 11.5%; 
AICD: -2.5%; 
Dual-chamber pacemaker: -1.9%.

Age: 80 or older; 
Growth in admissions: 
Drug-eluting stent: 13.1%; 
AICD: -4.1%; 
Dual-chamber pacemaker: -0.9%.

Source: GAO analysis of Healthcare Cost and Utilization Project 
Nationwide Inpatient Sample data.

Note: We define Medicare admissions as those of individuals who are 
age 65 and over. 

[End of table] 

Growing Share of IMD Beneficiaries Were Admitted in Poor or Very Poor 
Health, a Trend More Pronounced among Inpatient Cardiac IMD 
Beneficiaries:

* We found moderate increases in the proportion of orthopedic IMD 
beneficiaries who were in poor health from 2003 through 2009. (See 
figure 3.) 

- For the four orthopedic IMD procedures studied, the increase in the 
proportion of beneficiaries in poor health ranged from 2.9 to 3.9 
percentage points from 2003 through 2009.

Figure 3: Proportion of Inpatient Orthopedic IMD Beneficiaries in Poor 
Health, by Type of Procedure, 2003-2009:

[Refer to PDF for image: multiple line graph] 

Percent of device admissions: 

Year: 2003; 
Lumbar fusion: 8.2%; 
Total hip replacement: 5.8%; 
Total knee replacement: 4.9%; 
Total shoulder replacement: 3.2%. 

Year: 2004; 
Lumbar fusion: 10.1%; 
Total hip replacement: 6.4%; 
Total knee replacement: 5%; 
Total shoulder replacement: 2.6%. 

Year: 2005; 
Lumbar fusion: 10%; 
Total hip replacement: 6.3%; 
Total knee replacement: 5%; 
Total shoulder replacement: 2.3%. 

Year: 2006; 
Lumbar fusion: 9.2%; 
Total hip replacement: 7.5%; 
Total knee replacement: 5.7%; 
Total shoulder replacement: 3.6%. 

Year: 2007; 
Lumbar fusion: 11%; 
Total hip replacement: 8%; 
Total knee replacement: 6.2%; 
Total shoulder replacement: 4.2%. 

Year: 2008; 
Lumbar fusion: 11.6%; 
Total hip replacement: 8.6%; 
Total knee replacement: 6.9%; 
Total shoulder replacement: 6%. 

Year: 2009; 
Lumbar fusion: 12%; 
Total hip replacement: 9.7%; 
Total knee replacement: 7.8%; 
Total shoulder replacement: 6.1%. 

Source: GAO analysis of Healthcare Cost and Utilization Project 
Nationwide Inpatient Sample data. 

Note: We define Medicare admissions as those of individuals who are 
age 65 and over. 

[End of figure] 

* The proportion of orthopedic IMD beneficiaries in very poor health 
increased slightly but remained relatively low--roughly 1 percent--
throughout the study period.

* We found an increase in the proportion of beneficiaries who were 
admitted in poor health for inpatient cardiac IMD procedures from 2003 
through 2009. (See figure 4.) 

- The percent of cardiac IMD beneficiaries in poor health rose for 
every type of device procedure. This was particularly evident for drug-
eluting stent and dual-chamber pacemaker recipients from 2007 forward.

Figure 4: Proportion of Inpatient Cardiac IMD Beneficiaries in Poor 
Health, by Type of Procedure, 2003-2009:

[Refer to PDF for image: multiple line graph] 

Percent of device admissions: 

Year: 2003; 
AICD: 33.3%; 
Dual-chamber pacemaker: 13.9%; 
Drug-eluting stent: 9.9%. 

Year: 2004; 
AICD: 36%; 
Dual-chamber pacemaker: 15.2%; 
Drug-eluting stent: 11.3%. 

Year: 2005; 
AICD: 38.5%; 
Dual-chamber pacemaker: 15.1%; 
Drug-eluting stent: 11.9%. 

Year: 2006; 
AICD: 40.4%; 
Dual-chamber pacemaker: 16.9%; 
Drug-eluting stent: 13%. 

Year: 2007; 
AICD: 41.6%; 
Dual-chamber pacemaker: 17.8%; 
Drug-eluting stent: 13.9%. 

Year: 2008; 
AICD: 42.7%; 
Dual-chamber pacemaker: 22.2%; 
Drug-eluting stent: 15.7%. 

Year: 2009; 
AICD: 42.3%; 
Dual-chamber pacemaker: 23.9%; 
Drug-eluting stent: 18.8%. 

Source: GAO analysis of Healthcare Cost and Utilization Project 
Nationwide Inpatient Sample data. 

Note: We define Medicare admissions as those of individuals who are 
age 65 and over. 

[End of figure] 

* We also found an increase in beneficiaries in very poor health being 
admitted for each of the cardiac IMD devices from 2003 through 2009. 
(See figure 5.) 

- Again, the proportion of beneficiaries admitted with very poor 
health increased more rapidly from 2007 forward.

- The increase was particularly dramatic for AICDs; the share of 
beneficiaries that received an AICD who were in very poor health 
nearly doubled from 2007 through 2009.

Figure 5: Proportion of Inpatient Cardiac IMD Beneficiaries with Very 
Poor Health, by Type of Procedure, 2003-2009:

[Refer to PDF for image: multiple line graph] 

Percent of device admissions: 

Year: 2003; 
AICD: 4.7%; 
Dual-chamber pacemaker: 1.7%; 
Drug-eluting stent: 1.1%. 

Year: 2004; 
AICD: 4.7%; 
Dual-chamber pacemaker: 1.8%; 
Drug-eluting stent: 1.5%. 

Year: 2005; 
AICD: 4.5%; 
Dual-chamber pacemaker: 2%; 
Drug-eluting stent: 1.8%. 

Year: 2006; 
AICD: 4.7%; 
Dual-chamber pacemaker: 2.4%; 
Drug-eluting stent: 1.8%. 

Year: 2007; 
AICD: 5.1%; 
Dual-chamber pacemaker: 2.7%; 
Drug-eluting stent: 1.8%. 

Year: 2008; 
AICD: 8.1%; 
Dual-chamber pacemaker: 3.5%; 
Drug-eluting stent: 2.2%. 

Year: 2009; 
AICD: 9.6%; 
Dual-chamber pacemaker: 3.9%; 
Drug-eluting stent: 3.1%. 

Source: GAO analysis of Healthcare Cost and Utilization Project 
Nationwide Inpatient Sample data. 

Note: We define Medicare admissions as those of individuals who are 
age 65 and over. 

[End of figure] 

* The migration of cardiac IMD beneficiaries to the hospital 
outpatient setting most likely removed healthier beneficiaries from 
the inpatient population, leaving a greater proportion of 
beneficiaries in the inpatient setting with poor or very poor health.

Lengths of Stay for Orthopedic IMD Beneficiaries Fell Steadily; Stays 
for Cardiac IMD Beneficiaries Grew After 2007, Reflecting a Marked 
Decline in Patient Health Status:

Lengths of Stay Consistently Declined for Orthopedic IMD Beneficiaries:

* When comparing 2003 and 2009 data, we found substantial decreases in 
the average length of stay for all orthopedic IMD beneficiaries in our 
study. (See figure 6.) 

- For example, the length of stay for knee replacement beneficiaries 
fell from 4.02 to 3.38 days, or 2.8 percent per year. This represented 
a reduction of 64 days per 100 hospital admissions.

- The rates of decline in lengths of stay for these procedures were 
similar to those of non-IMD elective procedures.

Figure 6: Beneficiary Average Length of Stay, by Orthopedic IMD 
Procedure, 2003-2009: 

[Refer to PDF for image: multiple line graph] 

Year: 2003; 
Lumbar fusion: 4.74 days; 
Total hip replacement: 4.16 days; 
Total knee replacement: 4.02 days; 
Total shoulder replacement: 2.76 days. 

Year: 2004; 
Lumbar fusion: 4.78 days; 
Total hip replacement: 4.05 days; 
Total knee replacement: 3.89 days; 
Total shoulder replacement: 2.48 days. 

Year: 2005; 
Lumbar fusion: 4.62 days; 
Total hip replacement: 3.94 days; 
Total knee replacement: 3.83 days; 
Total shoulder replacement: 2.56 days. 

Year: 2006; 
Lumbar fusion: 4.54 days; 
Total hip replacement: 3.96 days; 
Total knee replacement: 3.78 days; 
Total shoulder replacement: 2.43 days. 

Year: 2007; 
Lumbar fusion: 4.36 days; 
Total hip replacement: 3.8 days; 
Total knee replacement: 3.64 days; 
Total shoulder replacement: 2.45 days. 

Year: 2008; 
Lumbar fusion: 4.09 days; 
Total hip replacement: 3.59 days; 
Total knee replacement: 3.48 days; 
Total shoulder replacement: 2.38 days. 

Year: 2009; 
Lumbar fusion: 4.07 days; 
Total hip replacement: 3.5 days; 
Total knee replacement: 3.38 days; 
Total shoulder replacement: 2.29 days. 

Source: GAO analysis of Healthcare Cost and Utilization Project 
Nationwide Inpatient Sample data. 

Note: Lengths of stay are those of individuals who are age 65 and over. 

[End of figure] 

Cardiac IMD Beneficiaries' Lengths of Stay Generally Declined through 
2007, but Increased Afterward:

* The average length of stay of beneficiaries admitted for cardiac IMD 
procedures generally declined from 2003 through 2007 but increased 
thereafter. (See figure 7.) 

- For example, the length of stay for those receiving drug-eluting 
stents fell 1.0 percent annually from 2003 through 2007 and increased 
at an annual rate of 5.5 percent during the last 2 years of our study 
period.

* The more recent increases in length of stay for cardiac IMD 
beneficiaries were associated with a change in the mix of patients 
receiving these procedures. As cardiac IMD surgeries shifted to the 
outpatient setting, more of the remaining inpatient beneficiaries were 
in poor or very poor health.

Figure 7: Beneficiary Average Length of Stay, by Cardiac IMD 
Procedure, 2003-2009:

[Refer to PDF for image: multiple line graph] 

Year: 2003; 
AICD: 5.63 days; 
Dual-chamber pacemaker: 4.3 days; 
Drug-eluting stent: 2.42 days. 

Year: 2004; 
AICD: 5.46 days; 
Dual-chamber pacemaker: 4.38 days; 
Drug-eluting stent: 2.58 days. 

Year: 2005; 
AICD: 4.69 days; 
Dual-chamber pacemaker: 4.23 days; 
Drug-eluting stent: 2.55 days. 

Year: 2006; 
AICD: 4.62 days; 
Dual-chamber pacemaker: 4.1 days; 
Drug-eluting stent: 2.38 days. 

Year: 2007; 
AICD: 4.52 days; 
Dual-chamber pacemaker: 4 days; 
Drug-eluting stent: 2.32 days. 

Year: 2008; 
AICD: 4.89 days; 
Dual-chamber pacemaker: 4.11 days; 
Drug-eluting stent: 2.33 days. 

Year: 2009; 
AICD: 5.15 days; 
Dual-chamber pacemaker: 4.14 days; 
Drug-eluting stent: 2.58 days. 

Source: GAO analysis of Healthcare Cost and Utilization Project 
Nationwide Inpatient Sample data. 

Note: Lengths of stay are those of individuals who are age 65 and over. 

[End of figure]

Lengths of Stay Differed Substantially by IMD Beneficiaries' Health 
Status; Stays Declined across Health Status Groups:

* For both orthopedic and cardiac IMD procedures, beneficiaries' 
lengths of stay differed substantially by health status across all 
years studied. Hospital stays were generally 1 to 3 days longer for 
beneficiaries in poor health compared with those in good or fair health.

* For all IMD procedures in our study, lengths of stay declined during 
the period for beneficiaries in all reported health status groups, 
falling most dramatically for IMD beneficiaries in poor health.

* From 2003 to 2009, for each of the four types of orthopedic IMDs,

- The average length of stay for orthopedic IMD beneficiaries 
decreased considerably across all health status groups.

- Because the rate of decline in the average length of stay was 
greater for IMD beneficiaries in poor health compared with those in 
good or fair health, the differences in lengths of stay narrowed 
significantly by 2009. (See figure 8.) 

Figure 8: Average Length of Stay for Orthopedic IMD Beneficiaries, by 
Procedure and Health Status, 2003-2009:

[Refer to PDF for image: 4 multiple line graphs] 

Total knee replacement: 

Year: 2003; 
Poor health: 6.25 days; 
Good or fair health: 3.87 days. 

Year: 2004; 
Poor health: 5.76 days; 
Good or fair health: 3.76 days. 

Year: 2005; 
Poor health: 5.67 days; 
Good or fair health: 3.7 days. 

Year: 2006; 
Poor health: 5.5 days; 
Good or fair health: 3.64 days. 

Year: 2007; 
Poor health: 5.22 days; 
Good or fair health: 3.5 days. 

Year: 2008; 
Poor health: 4.77 days; 
Good or fair health: 3.34 days. 

Year: 2009; 
Poor health: 4.41 days; 
Good or fair health: 3.25 days. 

Total hip replacement: 

Year: 2003; 
Poor health: 6.29 days; 
Good or fair health: 3.89 days. 

Year: 2004; 
Poor health: 5.81 days; 
Good or fair health: 3.89 days. 

Year: 2005; 
Poor health: 5.67 days; 
Good or fair health: 3.7 days. 

Year: 2006; 
Poor health: 5.47 days; 
Good or fair health: 3.77 days. 

Year: 2007; 
Poor health: 5.33 days; 
Good or fair health: 3.61 days. 

Year: 2008; 
Poor health: 4.92 days; 
Good or fair health: 3.41 days. 

Year: 2009; 
Poor health: 4.6 days; 
Good or fair health: 3.32 days. 

Total shoulder replacement: 

Year: 2003; 
Poor health: 5.78 days; 
Good or fair health: 2.59 days. 

Year: 2004; 
Poor health: 3.91 days; 
Good or fair health: 2.42 days. 

Year: 2005; 
Poor health: 4.18 days; 
Good or fair health: 2.51 days. 

Year: 2006; 
Poor health: 4.41 days; 
Good or fair health: 2.32 days. 

Year: 2007; 
Poor health: 4.06 days; 
Good or fair health: 2.35 days. 

Year: 2008; 
Poor health: 4.13 days; 
Good or fair health: 2.24 days. 

Year: 2009; 
Poor health: 3.45 days; 
Good or fair health: 2.17 days. 

Lumbar fusion: 

Year: 2003; 
Poor health: 7.46 days; 
Good or fair health: 4.41 days. 

Year: 2004; 
Poor health: 7.35 days; 
Good or fair health: 4.39 days. 

Year: 2005; 
Poor health: 7.18 days; 
Good or fair health: 4.22 days. 

Year: 2006; 
Poor health: 6.78 days; 
Good or fair health: 4.17 days. 

Year: 2007; 
Poor health: 6.39 days; 
Good or fair health: 4.01 days. 

Year: 2008; 
Poor health: 5.91 days; 
Good or fair health: 3.71 days. 

Year: 2009; 
Poor health: 5.87 days; 
Good or fair health: 3.67 days. 

Source: GAO analysis of Healthcare Cost and Utilization Project 
Nationwide Inpatient Sample data. 

Note: Lengths of stay are those of individuals who are age 65 and 
over. The average lengths of stay for orthopedic IMD beneficiaries in 
very poor health are not shown because relatively few beneficiaries 
were in this category. 

[End of figure] 

* For the period studied, the average IMD beneficiary length of stay 
generally declined for all cardiac procedures and in all health status 
groups. (See figure 9.) 

- From 2003 through 2007, the average length of stay for inpatient 
cardiac IMD beneficiaries declined for all health status groups.

- From 2007 through 2009, the average length of stay for those in good 
or fair health increased but generally decreased for those in poor or 
very poor health.

Figure 9: Average Length of Stay for Cardiac IMD Beneficiaries, by 
Procedure and Health Status, 2003-2009:

[Refer to PDF for image: 3 multiple line graphs] 

Drug-eluting stent: 

Year: 2003; 
Very poor health: 8.01 days; 
Poor health: 4.88 days; 
Good or fair health: 2.08 days. 

Year: 2004; 
Very poor health: 8.24 days; 
Poor health: 5.76 days; 
Good or fair health: 3.76 days. 

Year: 2005; 
Very poor health: 8.06 days; 
Poor health: 5.09 days; 
Good or fair health: 2.15 days. 

Year: 2006; 
Very poor health: 7.41 days; 
Poor health: 4.41 days; 
Good or fair health: 1.97 days. 

Year: 2007; 
Very poor health: 7 days; 
Poor health: 4.1 days; 
Good or fair health: 1.93 days. 

Year: 2008; 
Very poor health: 6.78 days; 
Poor health: 3.87 days; 
Good or fair health: 1.92 days. 

Year: 2009; 
Very poor health: 6.99 days; 
Poor health: 4.09 days; 
Good or fair health: 2.04 days. 

AICD: 

Year: 2003; 
Very poor health: 15.43 days; 
Poor health: 7.98 days; 
Good or fair health: 3.64 days. 

Year: 2004; 
Very poor health: 15.36 days; 
Poor health: 7.4 days; 
Good or fair health: 3.49 days. 

Year: 2005; 
Very poor health: 13.73 days; 
Poor health: 6.01 days; 
Good or fair health: 3.07 days. 

Year: 2006; 
Very poor health: 13.89 days; 
Poor health: 5.91 days; 
Good or fair health: 2.87 days. 

Year: 2007; 
Very poor health: 13.65 days; 
Poor health: 5.67 days; 
Good or fair health: 2.74 days. 

Year: 2008; 
Very poor health: 12.62 days; 
Poor health: 5.78 days; 
Good or fair health: 2.86 days. 

Year: 2009; 
Very poor health: 12.97 days; 
Poor health: 5.95 days; 
Good or fair health: 2.89 days. 

Dual-chamber pacemaker: 

Year: 2003; 
Very poor health: 11.2 days; 
Poor health: 7.37 days; 
Good or fair health: 3.65 days. 

Year: 2004; 
Very poor health: 10.9 days; 
Poor health: 7.39 days; 
Good or fair health: 3.69 days. 

Year: 2005; 
Very poor health: 10.41 days; 
Poor health: 7.25 days; 
Good or fair health: 3.53 days. 

Year: 2006; 
Very poor health: 9.97 days; 
Poor health: 6.63 days; 
Good or fair health: 3.4 days. 

Year: 2007; 
Very poor health: 10.16 days; 
Poor health: 6.32 days; 
Good or fair health: 3.27 days. 

Year: 2008; 
Very poor health: 9.64 days; 
Poor health: 6.12 days; 
Good or fair health: 3.25 days. 

Year: 2009; 
Very poor health: 9.03 days; 
Poor health: 5.86 days; 
Good or fair health: 3.31 days. 

Source: GAO analysis of Healthcare Cost and Utilization Project 
Nationwide Inpatient Sample data. 

Note: Lengths of stay are those of individuals who are age 65 and over. 

[End of figure] 

Orthopedic IMD Beneficiaries Were Increasingly Discharged to Home 
Health Care Rather Than Rehabilitative Facilities, while Cardiac IMD 
Beneficiaries' Discharge Disposition Pattern Was Relatively Unchanged:

Orthopedic Beneficiaries Were Increasingly Discharged to Home Health 
Care:

* From 2003 through 2009, an increasing percentage of inpatient 
orthopedic IMD beneficiaries were discharged to home health care. (See 
figure 10.) 

- For example, the share of beneficiaries receiving knee or hip 
replacements who were discharged to home health care grew from 22 to 
35 percent and 20 to 34 percent, respectively.

- At the same time, there was generally a notable reduction in the 
proportion that was discharged to a rehabilitative facility.

* The shift from rehabilitative facilities to home health care has the 
potential to lower Medicare expenditures. In 2008, the estimated 
overall average Medicare payment for SNF and IRF stays were $8,910 and 
$16,649, respectively, whereas the average payment for a home health 
episode of care was $2,800.[Footnote 20]

Figure 10: Beneficiaries' Discharge Disposition Following Orthopedic 
IMD Admissions, by Procedure, 2003-2009:

[Refer to PDF for image: 4 multiple line graphs] 

Percentage of beneficiaries: 

Total knee replacement: 

Year: 2003; 
Rehabilitative Facility: 54%; 
Home health care: 22%; 
Home or self care: 23%. 

Year: 2004; 
Rehabilitative Facility: 56%; 
Home health care: 26%; 
Home or self care: 18%. 

Year: 2005; 
Rehabilitative Facility: 51%; 
Home health care: 29%; 
Home or self care: 20%. 

Year: 2006; 
Rehabilitative Facility: 48%; 
Home health care: 32%; 
Home or self care: 18%. 

Year: 2007; 
Rehabilitative Facility: 46%; 
Home health care: 33%; 
Home or self care: 20%. 

Year: 2008; 
Rehabilitative Facility: 41%; 
Home health care: 37%; 
Home or self care: 20%. 

Year: 2009; 
Rehabilitative Facility: 43%; 
Home health care: 35%; 
Home or self care: 20%. 

Total hip replacement: 

Year: 2003; 
Rehabilitative Facility: 60%; 
Home health care: 20%; 
Home or self care: 18%. 

Year: 2004; 
Rehabilitative Facility: 62%; 
Home health care: 23%; 
Home or self care: 14%. 

Year: 2005; 
Rehabilitative Facility: 59%; 
Home health care: 25%; 
Home or self care: 15%. 

Year: 2006; 
Rehabilitative Facility: 56%; 
Home health care: 28%; 
Home or self care: 14%. 

Year: 2007; 
Rehabilitative Facility: 53%; 
Home health care: 30%; 
Home or self care: 16%. 

Year: 2008; 
Rehabilitative Facility: 49%; 
Home health care: 33%; 
Home or self care: 17%. 

Year: 2009; 
Rehabilitative Facility: 48%; 
Home health care: 34%; 
Home or self care: 16%. 

Total shoulder replacement: 

Year: 2003; 
Rehabilitative Facility: 15%; 
Home health care: 17%; 
Home or self care: 67%. 

Year: 2004; 
Rehabilitative Facility: 15%; 
Home health care: 17%; 
Home or self care: 67%. 

Year: 2005; 
Rehabilitative Facility: 15%; 
Home health care: 19%; 
Home or self care: 66%. 

Year: 2006; 
Rehabilitative Facility: 15%; 
Home health care: 20%; 
Home or self care: 65%. 

Year: 2007; 
Rehabilitative Facility: 17%; 
Home health care: 19%; 
Home or self care: 64%. 

Year: 2008; 
Rehabilitative Facility: 16%; 
Home health care: 23%; 
Home or self care: 61%. 

Year: 2009; 
Rehabilitative Facility: 17%; 
Home health care: 21%; 
Home or self care: 62%. 

Lumbar fusion: 

Year: 2003; 
Rehabilitative Facility: 39%; 
Home health care: 13%; 
Home or self care: 47%. 

Year: 2004; 
Rehabilitative Facility: 38%; 
Home health care: 17%; 
Home or self care: 44%. 

Year: 2005; 
Rehabilitative Facility: 39%; 
Home health care: 15%; 
Home or self care: 45%. 

Year: 2006; 
Rehabilitative Facility: 34%; 
Home health care: 19%; 
Home or self care: 46%. 

Year: 2007; 
Rehabilitative Facility: 35%; 
Home health care: 19%; 
Home or self care: 45%. 

Year: 2008; 
Rehabilitative Facility: 29%; 
Home health care: 18%; 
Home or self care: 51%. 

Year: 2009; 
Rehabilitative Facility: 30%; 
Home health care: 20%; 
Home or self care: 49%. 

Source: GAO analysis of Healthcare Cost and Utilization Project 
Nationwide Inpatient Sample data. 

Note: Rehabilitative facilities include inpatient rehabilitation 
facilities, skilled nursing facilities, and other facilities that 
provide rehabilitative care. Discharge dispositions are those of 
individuals who are age 65 and over. 

[End of figure] 

* The migration of orthopedic IMD beneficiaries to home health care 
discharges was most evident among those in good or fair health but was 
also observable for those in poor health. (See table 3.) 

Table 3: Discharge Disposition of Orthopedic IMD Beneficiaries, by 
Health Status, 2003-2009:

Health status: Good or fair health; 
Discharge disposition: Rehabilitative facility; 
Percentage of beneficiaries: 
2003: 53%; 
2004: 54%; 
2005: 51%; 
2006: 47%; 
2007: 44%; 
2008: 40%; 
2009: 40%.

Health status: Good or fair health; 
Discharge disposition: Home health care; 
Percentage of beneficiaries: 
2003: 21%; 
2004: 25%; 
2005: 27%; 
2006: 31%; 
2007: 32%; 
2008: 35%; 
2009: 34%.

Health status: Good or fair health; 
Discharge disposition: Home or self-care; 
2003: 25%; 
2004: 20%; 
2005: 22%; 
2006: 22%; 
2007: 23%; 
2008: 25%; 
2009: 25%.

Health status: Poor health; 
Discharge disposition: Rehabilitative facility; 
Percentage of beneficiaries: 
2003: 66%; 
2004: 67%; 
2005: 64%; 
2006: 65%; 
2007: 61%; 
2008: 59%; 
2009: 60%.

Health status: Poor health; 
Discharge disposition: Home health care; 
Percentage of beneficiaries: 
2003: 15%; 
2004: 18%; 
2005: 20%; 
2006: 21%; 
2007: 23%; 
2008: 24%; 
2009: 24%.

Health status: Poor health; 
Discharge disposition: Home or self-care; 
Percentage of beneficiaries: 
2003: 16%; 
2004: 13%; 
2005: 14%; 
2006: 12%; 
2007: 14%; 
2008: 15%; 
2009: 13%.

Source: GAO analysis of Healthcare Cost and Utilization Project 
Nationwide Inpatient Sample data.

Note: Rehabilitative facilities include inpatient rehabilitation 
facilities, skilled nursing facilities, and other facilities that 
provide rehabilitative care. Disposition data for orthopedic IMD 
beneficiaries in very poor health are not shown because relatively few 
beneficiaries were in this category. Discharge dispositions are those 
of individuals who are age 65 and over. 

[End of table] 

* The Medicare Payment Advisory Commission cited CMS actions when 
describing the shift in orthopedic IMD beneficiaries' discharge 
disposition from rehabilitation facilities to home health care. 
[Footnote 21]

- In 2004, CMS revised its list of conditions for determining the 
medical need of patients for inpatient rehabilitation services, 
recognizing only certain categories of patients with knee or hip 
replacements.[Footnote 22]

- From 2005 to 2008, CMS Medicare Recovery Audit Contractors found 
medically unnecessary services performed in IRFs following joint 
replacement surgery. This may have further reduced the amount of IRF 
admissions related to joint replacements.

Changes in Health Status for Inpatient Cardiac IMD Beneficiaries Were 
Not Associated with a Substantial Increase in Use of Postacute Care:

* During our study period, the share of inpatient cardiac IMD 
beneficiaries discharged to a rehabilitative facility remained 
relatively stable. (See table 4.) 

- Between 2003 and 2007, the share of inpatient cardiac IMD 
beneficiaries discharged to home or self-care remained at roughly 86 
percent.

- After their general decline in health status since 2007, the share 
of inpatient cardiac IMD beneficiaries discharged to home or self-care 
began to fall slightly.

Table 4: Discharge Disposition of Cardiac IMD Beneficiaries, 2003-2009:

Discharge disposition: Home or self-care; 
Percentage of beneficiaries: 
2003: 85%; 
2004: 86%; 
2005: 86%; 
2006: 87%; 
2007: 85%; 
2008: 84%; 
2009: 83%.

Discharge disposition: Home health care; 
Percentage of beneficiaries: 
2003: 7%; 
2004: 7%; 
2005: 7%; 
2006: 6%; 
2007: 7%; 
2008: 9%; 
2009: 9%.

Discharge disposition: Rehabilitative facility; 
Percentage of beneficiaries: 
2003: 7%; 
2004: 6%; 
2005: 5%; 
2006: 5%; 
2007: 7%; 
2008: 7%; 
2009: 7%.

Source: GAO analysis of Healthcare Cost and Utilization Project 
Nationwide Inpatient Sample data.

Note: Discharge dispositions are those of individuals who are age 65 
and over. 

[End of table] 

* The share of cardiac IMD beneficiaries who were discharged to a 
rehabilitative facility also remained relatively stable by health 
status.

Agency Comments:

We obtained comments on a draft of this report from the Department of 
Health and Human Services. The agency responded that it had no general 
comments and provided technical comments, which we incorporated as 
appropriate.

As we agreed with your office, unless you publicly announce the 
contents of this report earlier, we plan no further distribution of it 
until 30 days from its date. We are sending copies of this report to 
the Secretary of Health and Human Services. The report will also be 
available at no charge on our website at [hyperlink, 
http://www.gao.gov].

If you or your staff have any questions about this report, please 
contact me at (202) 512-7114 or cosgrovej@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. Individuals making key contributions 
to this report include Rosamond Katz, Assistant Director; Luis Serna 
III; and Brian O'Donnell. Zhi Boon also provided valuable assistance.

Sincerely yours, 

Signed by: 

James Cosgrove Director, Health Care:

[End of section] 

Footnotes: 

[1] We define IMDs as artificial devices implanted entirely within the 
body that are intended to remain there permanently. However, some of 
these devices have a limit to their effective life span and will 
require replacement.

[2] Lumbar and lumbosacral fusions are those that involve certain 
vertebrae in the lower region of the spine. Posterior fusions refer to 
how the surgeon approaches the spine--through the lower back.

[3] We excluded (1) partial joint replacements and procedures 
involving more than one joint, (2) replacement surgeries needed when 
the effective performance of some devices declines, (3) lumbar fusion 
procedures that did not use the posterior technique, and (4) other 
types of spinal fusions, such as those related to the cervical spine.

[4] Research has found an increase in 30-and 90-day all-cause 
readmission rates for total hip replacement patients in recent years. 
Xueya Cai, et al., Year: Clinical Characteristics and Outcomes of 
Medicare Patients Undergoing Total Hip Arthroplasty, 1991-2008, Year: 
Journal of the American Medical Association 305, no. 15 (2011): 
1560-1567. 

[5] Revisions, procedures that replace part or all of an IMD, 
accounted for 8.9 percent of all orthopedic IMD procedure Medicare 
expenditures in 2004 and 11.0 percent in 2009, increasing from about 
$0.5 billion to about $1 billion. Some revisions may reflect device 
recalls. From 2005 through 2009, orthopedic and cardiovascular devices 
constituted 12 and 15 percent of medical device recalls, respectively. 
See GAO, Medical Devices: FDA Should Enhance Its Oversight of Recalls, 
[hyperlink, http://www.gao.gov/products/GAO-11-468] (Washington, D.C.: 
June 14, 2011).

[6] Medicare covers virtually all of the population age 65 and over. 
We defined Medicare admissions as those of individuals who are in that 
age cohort. 

[7] The NIS is designed as a representative 20 percent sample of all 
hospitals. It contains hospital discharge data provided by states that 
participate in HCUP. In 2009, 44 states provided data from about 1,000 
hospitals. NIS data do not include outpatient procedures.

[8] We define Medicare admission rates as admissions per 10,000 
Medicare Part B beneficiaries. Among other things, Medicare Part B 
covers the physicians' services used in IMD procedures.

[9] Across all procedure types, we assigned health status using 
several patient variables, including a beneficiary's principal and 
secondary diagnosis, procedures codes, age, sex, and discharge 
disposition. Patient demographics, such as secondary diagnoses, can be 
risk factors for in-hospital complications and mortality. For example, 
research on patients undergoing bilateral total knee arthroplasty has 
shown that the presence of congestive heart failure and pulmonary 
hypertension have been associated with increased risk for adverse 
outcome. See Ya-Lin Chiu, et al., Year: Bilateral Total Knee 
Arthroplasty: Risk Factors for Major Morbidity and Mortality,
Year: Anesthesia & Analgesia, July 13, 2011.

[10] Discharge disposition indicates the postacute care, if any, a 
beneficiary received directly after discharge. However, beneficiaries 
can receive a series of postacute care services in various settings. 

[11] Screws and rods are used to hold the spine still to aid the 
fusion process. Cages placed between two vertebrae and BMP, a 
synthetic bone-forming protein, are often used together to promote 
fusion in lumbar fusion surgeries.

[12] In 2011, about three quarters of all beneficiaries were in fee-
for-service Medicare and the rest were enrolled in private health 
plans under the Medicare Advantage program.

[13] See GAO, Medicare: Lack of Price Transparency May Hamper 
Hospitals' Ability to Be Prudent Purchasers of Implantable Medical 
Devices, [hyperlink, http://www.gao.gov/products/GAO-12-126] 
(Washington, D.C.: Jan. 13, 2012). 

[14] C. Mehrotra, P. Remington, T. Naimi, W. Washington, and R. Miller, 
Year: Trends in Total Knee Replacement Surgeries and Implications for 
Public Health, 1990-2000, Year:  Public Health Reports 120 (2005): 
278-282. S. Kurtz, F. Mowat, K. Ong, N. Chan, et. al, Year: Prevalence 
of Primary and Revision Total Hip and Knee Arthroplasty in the United 
States from 1990 through 2002, Year:  Journal of Bone and Joint 
Surgery; July 2005; 87, 7; ProQuest Medical Library, pg. 1487.

[15] Patient satisfaction rates are even greater for hip and shoulder 
replacements at 90 percent and 97 percent, respectively. See: E. 
Fisher, J. Bell, I. Tomek, A. Esty, and D. Goodman, Year: Trends and 
Regional Variation in Hip, Knee, and Shoulder Replacement, Year: 
Dartmouth Atlas Surgery Report (2010). 

[16] Obesity appears to be undercoded in hospital data given the much 
higher prevalence in the general population. See [hyperlink, 
http://www.hcup-us.ahrq.gov/reports/statbriefs/sb20.jsp]. Accessed on 
March 23, 2012.

[17] Since BMP has not been approved for use in posterior lumbar 
fusion, growth in usage during this period is off label.

[18] GAO, Medicare: Lack of Price Transparency May Hamper Hospitals' 
Ability to Be Prudent Purchasers of Implantable Medical Devices, 
[hyperlink, http://www.gao.gov/products/GAO-12-126] (Washington, 
D.C.: Jan. 13, 2012).

[19] Recovery audit contractors conduct postpayment reviews to 
identify overpayments and underpayments and recoup any overpayments 
they identify.

[20] Other factors could also affect the cost of postacute care, such 
as readmissions.

[21] See MedPAC, Report to the Congress: Medicare Payment Policy 
(Washington, D.C.: March 2011), 28, accessed October 19, 2011, 
[hyperlink, http://www.medpac.gov/documents/Mar11_EntireReport.pdf]. 

[22] In order for an IRF to be paid under the IRF prospective payment 
system instead of the acute care hospital inpatient prospective 
payment system CMS requires that 75 percent of the facility's 
beneficiaries have one or more qualifying medical conditions. CMS 
revised the 75 percent rule by requiring that beneficiaries who 
receive knee or hip replacements must have undergone bilateral joint 
surgery, be extremely obese, or be 85 years or older at the time of 
admission to the IRF. See 69 Fed. Reg. 25752, 25775 (May 7, 2004) 
(relevant provisions currently codified at 42 C.F.R. § 412.29(b)(2)(xiii) 
(2011)). 

[End of section] 

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