By category
View All | Comparing Costs | Cost Analysis | Determine Cost of X | Missing and Outlier Data | Non-VA Costs | Pharmacy | Staff and Labor | VA Cost Data
VA uses the Managerial Cost Accounting Office (MCA) for fiscal management and to determine the cost of patient care. National Data Extracts (NDEs) have been created to facilitate access to workload and cost information. These extracts report costs of inpatient and outpatient encounters, reflecting actual resource use within VA. These data contain rare outlier observations with cost inconsistent to the care provided.
HERC has developed SAS code to flag and adjust outlier observations in the Managerial Cost Accounting Pharmacy National Data Extract (the MCA PHA NDE). The PHA file contains prescription-level records which include detailed cost information on each prescription filled, both inpatient and outpatient.
In order to identify costs that are likely to be truly erroneous, rather than legitimately expensive medications, strict criteria are applied to define outliers. The product cost of the medication and the dispensing cost are considered separately. In consultation with MCA and after review of cost distributions by VA Class, product cost outliers are defined as costs greater than 120% of the maximum price of all drugs in the VA drug class, as shown in the drug price list from Pharmacy Benefits Management Services. This criterion is designed to select only gross outliers. Since dispensing costs are typically low and do not vary much across VA drug class, the outlier cut-off for dispensing costs is set at a fixed $100. (Note that median dispensing costs by VA drug class range from $3.56 to $9.95 in FY15.) Absolute values are used in order to identify both positive and negative outliers. Out of 243 million records in the FY15 PHA file, 33,410 product costs (0.014%) and 158,635 dispensing costs (0.065%) are classified as outliers by these criteria.
Both product and dispensing outlier costs are adjusted by replacing the outlier value with the median cost for the VA drug class (and retaining the sign of the original cost). Although this code is designed to adjust the prescription-level records in the MCA PHA dataset, with some additional coding to restrict to outpatient fills and summarize by dispensing date, the prescription-level adjustments can also be used to adjust the daily pharmacy cost records in the MCA Outpatient NDEs.
This work was conducted as part of a project funded by the Geriatric & Extended Care Data & Analysis Center (GECDAC). Researchers interested in obtaining this code should contact HERC at herc@va.gov.
