Joint Effect of Malpractice Risk and Financial Incentives on Cardiac Testing

A. SPECIFIC AIMS Aim 1. Assess how medical malpractice risk affects cardiac testing. We will rely on tort reforms over 2003–2008 as malpractice shocks that permit us to estimate the causal effects of the reforms. Aim 2. Assess how reimbursement cuts affect cardiac test type, volume, location, and cost. We will examine how the 2010 CMS reimbursement cuts affect the type, volume, and location (e.g., inpatient, hospital-based outpatient, or office-based outpatient) of cardiac testing, including whether the cuts drove testing to more expensive locations and test types. Aim 3. Examine how malpractice risk and financial incentives jointly affect the type, volume and cost of cardiac testing. We will examine how the impact of the reimbursement cuts varies based on local malpractice risk level; we expect the effect to be greater in areas with lower malpractice risk. Aim 4. Evaluate the joint impact of testing intensity and malpractice risk on patient outcomes. We will assess whether changes in cardiac testing rates and test type predict intervention rates and patient outcomes, and whether the patients receive appropriate tests. Policy significance. Understanding the separate and joint impact of legal risk and financial incentives on testing rates has broad policy implications beyond cardiac care. The findings of this study are important for: (1) state and national efforts to adopt tort reforms; (2) CMS and private insurer efforts to use reimbursement levels to influence clinical practice; and (3) the success of affordable care organizations and capitated payment models, which will have incentives to undertest.