Pulmonary Rehabilitation in Chronic Obstructive Pulmonary Disease: Medicine’s Best-kept Secret That Could Save Medicare a Billion Dollars a Year

Chronic obstructive pulmonary disease (COPD) is a leading cause of mortality and affects an estimated 24 million people in the United States (1). The prevalence of COPD in Americans aged ⩾65 years (i.e., Medicare beneficiaries) is 17% (2). Direct health system costs associated with COPD are estimated at $800 billion during the next 20 years (3). More than 25% of these costs are attributable to hospitalization for COPD exacerbation (4). Pulmonary rehabilitation (PR) has been shown to be one of the most effective COPD treatments. PR is a multidisciplinary program providing supervised exercise training and self-management education targeting long-term behavior modification designed to increase physical activity (5). In addition to improving exercise capacity, dyspnea, and quality of life, timely participation in PR after a COPD hospitalization is associated with substantially improved 1-year mortality (6) and hospital readmission (7). Despite consistent evidence demonstrating the benefits of PR, participation is only about 3% among Medicare-eligible U.S. patients with COPD (8).

PR Access: Disparities, Barriers, and Inequities

In the United States, significant geographic disparity exists in access to PR (9), particularly in rural settings (2). Major participation barriers include transportation, copayments, and low reimbursement (10). Although PR participation rates among all Medicare beneficiaries are low, rates are even lower in Black compared with non-Hispanic White Medicare beneficiaries. PR participation rates among non-Hispanic White, but not Black, beneficiaries have been shown to be positively correlated with PR program geographic density (11). Reasons for this disparity are not fully understood. An additional limit to PR access is termination of Medicare payment of virtual PR provided by hospital-based programs effective May 11, 2023. A further inequity is that patients with COPD are limited to 72 lifetime sessions, whereas cardiac rehabilitation is covered for 36 sessions per covered event.

Low PR Reimbursement Undercuts Access

Substantially low reimbursement for PR can be tied to the 2010 change in Medicare PR reimbursement, which introduced a new bundled comprehensive COPD payment code, G0424 (12). Most PR centers have failed to adequately modify PR charges to reflect the increased time, complexity, and resources associated with the new bundled 1-hour code G0424 versus previous separately billed 15-minute billing codes for exercise and education (13). Thus, PR reimbursement continues to stagnate. PR per-session reimbursement is less than half of cardiac rehabilitation per session, despite comparable intensity of services, patient complexity, and documentation (13). The American Thoracic Society, together with all major pulmonary societies, has worked to address these challenges, but progress has been slow.

Reduce Costs Through Strategic Initiatives That Increase Access to PR in Medicare

A cost-effectiveness analysis showed that PR participation after COPD hospitalization saves an estimated $5,700 per patient over their lifetime because of fewer hospitalizations and skilled nursing facility (SNF) days (10). If all fee-for-service COPD Medicare beneficiaries received PR after a COPD admission, Medicare could save >$1 billion annually (10). In 2022, 52% of COPD Medicare enrollees were fee-for-service beneficiaries. The remaining 48% were enrolled in a Medicare Advantage (MA) plan, with a projected increase to 61% by 2032 (14). MA is provided via private health plans, which receive Centers for Medicare and Medicaid Services (CMS) funding. Therefore, hundreds of millions of dollars in savings could be achieved if all MA participants received PR after a COPD hospitalization. It should be noted that additional savings are likely to be achieved by increasing participation in PR among nonhospitalized patients with COPD, although the magnitude of these savings are less well understood.

To achieve these savings, CMS and health system stakeholders could invest anticipated cost savings to develop infrastructure and reimbursement models facilitating increased PR access. The potential $1 billion in cost savings associated with PR apply to the traditional Medicare fee-for-service model and accrue directly to CMS. We believe CMS should consider several approaches to achieve these cost savings. CMS could prioritize payment reforms for the highest-risk, highest-reward patients, such as those hospitalized for COPD within the last 12 months. CMS could provide bundled COPD hospitalization payments that include wrap-around care coordination to ensure PR referral is scheduled and provide subsidized transportation and copayments for those in need.

Prioritize PR in Accountable Care Organizations

In the past two decades, there has been rapid growth in alternative Medicare payment models, principally MA and Accountable Care Organizations (ACOs) (14). An ACO is a group of healthcare providers and hospitals that collaborate to provide high-value care to Medicare patients and, in exchange, share in savings achieved by delivering value-based care. Beginning in 2023, CMS began a new initiative, the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) model, which aims to advance the health equity of traditional Medicare fee-for-service patients in underserved communities through improved care coordination and access to accountable care (15). ACO partners can be broadly described as physician or hospital led. Physician-led practices, particularly in primary care, are likely to view reduction in hospital and SNF days as financially advantageous, because their revenue is not negatively impacted by reduction in these services. In contrast, a hospital-led ACO’s balance sheet is less straightforward, as hospitals would inherently balance reduction in hospital reimbursements against a reduction in SNF payments. Therefore, prioritizing PR participation within the ACO REACH model, in which most partners are physician led, would be expected to lead to improved patient outcomes and financial rewards (16).

Leverage MA to Increase PR Access

This approach alone, however, will be unlikely to adequately address the problem in the near future, as in 2023 ACOs are expected to serve only about 20% of traditional Medicare beneficiaries (17). As an additional approach, strategies to make PR more attractive and accessible to MA patients could be designed. MA’s highest concentration (40% or more) is in the southeastern United States, the region with the highest prevalence of COPD (14, 18). In MA, CMS contracts with private insurance plans to deliver quality and risk-adjusted payments to promote high-value care. Using risk-adjusted payments, a care management infrastructure can be developed including enhanced use of telephone triage for outpatient appointment access, primary care–directed disease management services, and care algorithms embedded in electronic health records. Studies have shown that MA-enrolled patients have improved health outcomes across multiple metrics versus traditional Medicare beneficiaries. Importantly, the largest documented benefit is a reduction in COPD or asthma hospitalizations among beneficiaries whose physicians participated in a two-sided risk MA model compared with traditional Medicare (19). In a two-sided risk model, physicians may generate financial bonuses or incur penalties based on the quality and cost of care they provide. The value proposition for CMS to collaborate with MA plans and providers to increase PR participation is particularly appealing, considering the high concentration of MA providers and patients with COPD in the southeastern United States. MA providers have already developed infrastructure that has yielded a reduction in COPD hospitalizations. Existing infrastructure (e.g., primary care–directed disease management services and electronic health record care algorithms) could be further leveraged to increase PR participation.

Increasing PR Access: A Social and Financial Responsibility

Considering the proven, substantial benefits of PR, failure to facilitate participation in this high-value, cost-saving intervention not only remains unjust and inequitable but also should now be considered financially irresponsible, given the cost savings associated with PR participation. We believe that payers, particularly Medicare, should leverage existing ACO and MA partnerships to identify policies that increase PR participation for patients living with COPD. Collaborative strategies facilitating substantive improvement in PR reimbursement and participation must involve clinical, healthcare policy, and finance perspectives to effectively impact inequities that undermine improvement in health status and clinical outcomes. Clinicians, legislators, and the public should ask themselves: when will patients living with COPD join the ranks of those with other chronic illnesses (in particular, heart disease) to have equitable access to a highly effective, safe, and cost-saving intervention?

Summary Points

We propose the following strategies be considered to overcome disparities, barriers, and inequities in access to PR:

• •Develop solutions to overcome geographic and racial disparities in access to PR
• •Equitably reimburse PR services
• •Reduce healthcare costs by increasing access to PR
• •Focus initiatives on recently hospitalized patients and consider subsidizing transportation and copayments to increase PR access
• •Prioritize PR, particularly in ACOs and MA populations, especially those in two-sided risk arrangements.