Variation in the Ratio of Physician Charges to Medicare Payments by Specialty and Region

Trends in Hospital Billing for Mastectomy and Breast Reconstruction Procedures from 2013 to 2020

BACKGROUND

 With greater acceptance of postmastectomy breast reconstruction (PMBR) as a safe and reliable treatment option, the role of plastic surgeons in breast cancer management continues to rise. As Medicare reimbursements for surgical procedures decline, hospitals may increase charges. Excessive markups can negatively affect uninsured and underinsured patients. We aimed to analyze mastectomy and breast reconstruction procedures to gain insights into recent trends in utilization and billing.

METHODS

 We queried the 2013 to 2020 Medicare Provider Utilization and Payment Data with 14 Current Procedural Terminology (CPT) codes to collect service count numbers, hospital charges, and reimbursements. We calculated utilization (service counts per million female Medicare enrollees), weighted mean charges and reimbursements, and charge-to-reimbursement ratios (CRRs). We calculated total and annual percentage changes for the included CPT codes.

RESULTS

 Among the 14 CPT codes, 12 CPT codes (85.7%) with nonzero service counts were included. Utilization of mastectomy and breast reconstruction procedures decreased from 1,889 to 1,288 (-31.8%) procedures per million female Medicare beneficiaries from 2013 to 2020. While the utilization of immediate implant placements (CPT 19340) increased by 36.2%, the utilization of delayed implant placements (CPT 19342) decreased by 15.1%. Reimbursements for the included CPT codes changed minimally over time (-2.9%) but charges increased by 28.9%. These changes resulted in CRRs increasing from 3.3 to 4.4 (+33.3%) from 2013 to 2020. Free flap reconstructions (CPT 19364) had the highest CRRs throughout the study period, increasing from 7.0 in 2013 to 10.3 in 2020 (+47.1%).

CONCLUSIONS

 Our analysis of mastectomy and breast reconstruction procedures billed to Medicare Part B from 2013 to 2020 showed increasingly excessive procedural charges. Rises in hospital charges and CRRs may limit uninsured and underinsured patients from accessing necessary care for breast cancer management. Legislations that monitor hospital markups for PMBR procedures may be considered by policymakers.

Dwindling dollars: The inflation-adjusted decline of Medicare reimbursement in endocrine surgery (2003-2023)

INTRODUCTION

Medicare determines reimbursement rates for medical services, often setting a benchmark that is followed by private insurers. Across various medical specialties, decreases in Medicare reimbursement have been observed. However, the extent of Medicare reimbursement for endocrine surgery remains unexplored. This study investigates the trajectory of reimbursement rates for endocrine surgical procedures.

METHODS

Data spanning 2003 to 2023 were gathered from the Physician Fee Schedule Look-Up Tool for 16 endocrine operations and procedures. Each operation's or procedure's relative value units and conversion factor, which accounts for geographic variation in relative value units, are determined annually by the Centers for Medicare and Medicaid Services. The total annual Medicare reimbursement for each operation or procedure was determined by multiplying procedure-specific relative value units with the conversion factor. Raw yearly percentage changes in reimbursement were computed and compared to changes in the general consumer price index. All data were then corrected for inflation. The compound annual growth rate for each procedure was calculated using inflation-adjusted data.

RESULTS

From 2003 to 2023, the mean unadjusted percentage change for all queried procedures was +14.14% (standard deviation 0.28). During this same time, the consumer price index increased by 69.15% (P < .001). After adjusting for inflation, the mean total adjusted percentage change for all queried procedures over the entire study period was -31% (standard deviation 0.17). The adjusted average yearly compound annual growth rate was -1.93% (standard deviation 0.92). Only 1 procedure showed an increase in reimbursement (image-guided fine-needle aspiration, +32%).

CONCLUSION

Inflation-adjusted Medicare reimbursement rates for endocrine surgical procedures have consistently declined. Stakeholders must address these trends to ensure access to quality surgical endocrine care in an evolving health care landscape.

Billing and Utilization Trends in Reconstructive Microsurgery Indicate Worsening Access to Care

BACKGROUND

 Within the last 20-years, Medicare reimbursements for microsurgery have been declining, while physician expenses continue to increase. As a result, hospitals may increase charges to offset revenue losses, which may impose a financial barrier to care. This study aimed to characterize the billing trends in microsurgery and their implications on patient care.

METHODS

 The 2013 to 2020 Provider Utilization and Payment Data Physician and Other Practitioners Dataset was queried for 16 CPT codes. Service counts, hospital charges, and reimbursements were collected. The utilization, weighted mean reimbursements and charges, and charge-to-reimbursement ratios (CRRs) were calculated. The total and annual percent changes were also determined.

RESULTS

 In total, 13 CPT codes (81.3%) were included. The overall number of procedures decreased by 15.0%. The average reimbursement of all microsurgical procedures increased from $618 to $722 (16.7%). The mean charge increased from $3,200 to $4,340 (35.6%). As charges had a greater increase than reimbursement rates, the CRR increased by 15.4%. At the categorical level, all groups had increases in CRRs, except for bone graft (-49.4%) and other procedures (-3.5%). The CRR for free flap breast procedures had the largest percent increase (47.1%). Additionally, lymphangiotomy (28.6%) had the second largest increases.

CONCLUSION

 Our analysis of microsurgical procedures billed to Medicare Part B from 2013 to 2020 showed that hospital charges are increasing at a faster rate than reimbursements. This may be in part due to increasing physician expenses, cost of advanced technology in microsurgical procedures, and inadequate reimbursement rates. Regardless, these increased markups may limit patients who are economically disadvantaged from accessing care. Policy makers should consider legislation aimed at updating Medicare reimbursement rates to reflect the increasing complexity and cost associated with microsurgical procedures, as well as regulating charge markups at the hospital level.

Medicare billing and utilization trends in vascular surgery

OBJECTIVE

Within the past decade, Medicare Part B reimbursements for various surgical procedures have been declining, whereas health care expenses continue to increase. As a result, hospitals may increase service charges to offset losses in revenue, which may disproportionately affect underinsured patients. Our analysis aimed to characterize Medicare billing and utilization trends across common vascular surgical procedures.

METHODS

The 2017 to 2021 Medicare Physician and Other Practitioners by Provider and Service dataset was queried for Current Procedural Terminology (CPT) codes for common vascular surgery procedures. The average charges, reimbursements, charge-to-reimbursement ratios, and service counts were calculated for the most common interventions performed by vascular surgeons. Data was stratified by care setting, facility (inpatient and outpatient hospital) vs non-facility locations. All monetary values were adjusted to the 2021 United States dollars to account for inflation.

RESULTS

For facility settings, the mean charge billed to Medicare Part B increased from $3708 to $3952 (6.6%) from 2017 to 2021, with the average charge-to-reimbursement ratio increasing from 7.2 to 8.6. There were 17 of the 19 facility procedures that had a decline in reimbursements, decreasing from an average of $558 to $499 (-10.4%). Stab phlebectomy had the largest individual decrease in facility reimbursement (-53.5%), followed by above-knee amputation (-11.3%) and below-knee amputation (-11.0%). Both non-facility charges (-10.8%) and reimbursements (-12.2%) declined over the study period. Procedural utilization remained stable from 2017 to 2019. Tibial and femoral-popliteal atherectomy had increases of 45.9% and 33.7%, respectively, in overall procedural utilization when performed in non-facility settings from 2017 to 2019.

CONCLUSIONS

Our analysis of vascular surgery procedures billed to Medicare Part B from 2017 to 2021 demonstrates an increase in charges, a decline in reimbursements, and a resultant increase in charge-to-reimbursement ratios for facility care settings. In contrast, non-facility charges have decreased in the face of declining reimbursements. These markups in submitted charges in facility locations may serve as an additional barrier to accessing care for patients who are underinsured.

Trends in Medicare Submitted Charges to Allowed Payment Ratios for Ophthalmology Services

Purpose

Many physicians charge more than the Medicare insurance program pays. Current charge-to-payment ratios in ophthalmology and trends over the years are unknown. In this work, we examined physician charge-to-payment ratios in ophthalmology across procedures and consultations.

Methods

We utilized data from 100% final-action physician/supplier Part B Medicare fee-for-service (FFS) population from 2015 to 2020. We retrieved data on ophthalmic procedures and consultations, both facility-based and non-facility-based, conducted by ≥ 50 ophthalmologists. We analyzed median charge-to-payment ratios, which were calculated as submitted charges divided by the Medicare-allowed payments, between ophthalmic procedures and consultations to assess for trends over the study period.

Results

We find that the median charge-to-payment ratio for all current procedural terminology (CPT) codes in 2020 was 2.23 (Interquartile range (IQR): 1.54-3.27) as compared to 2.00 (IQR: 1.39-2.92) in 2015, an overall 2.76% average annual growth rate from 2015-2020. For ophthalmic procedures, the median charge-to-payment ratio in 2020 was 3.03 (IQR: 2.13-4.41) compared to 2.79 (IQR: 1.96-3.97) in 2015, corresponding to a 2.01% AAGR from 2015-2020. For consultations, those rates were 2.06 (IQR: 1.48-2.96), 1.85 (IQR: 1.33-2.59), and 2.71%, respectively.

Conclusion

We found that the submitted charge-to-Medicare payment ratios among ophthalmic procedures and consultations have steadily increased since 2015. However, there was a relatively low rate of excess charges for ophthalmology services compared to other surgical-based specialties with minimal variation among providers.

Variation in Treatment Charges and Reimbursement Among Individual Thoracic Surgeons

BACKGROUND

Health care use and costs have undergone an increase in public scrutiny. Other specialties have evaluated practice patterns of their most highly reimbursed surgeons and found unique billing and procedure overuse. In this study, we evaluate Medicare payments to general thoracic surgeons and evaluate those with the highest reimbursements.

METHODS

The 2018 Medicare Provider Utilization Data were queried to identify thoracic surgeons. Services were grouped into common categories: Evaluation and Management, Lung/Pleura, Foregut, Chest Wall, Airway, Diaphragm, Mediastinum, Endoscopy, and Transplant. Payment data were analyzed for surgeons receiving the top 1% of Medicare payments and the remainder of the workforce.

RESULTS

In 2018, 2000 unique self-identified thoracic surgeons received a total of $54,734,736 in payments from Medicare for thoracic-related services. The top 1% of thoracic surgeons (n = 20) received $4,607,561, or 8.4% of total payments. Inpatient Evaluation and Management was the leading payment category for the top 1% (48.5% of payments), whereas Outpatient Evaluation and Management led for the remaining workforce (43.5% of payments). Whereas the surgical procedure code with overall highest reimbursement for both groups was Current Procedural Terminology (American Medical Association) 32663 (video-assisted thoracic surgery lobectomy), there was a difference with an increased use of high relative value unit unbundled Current Procedural Terminology codes in the highest earners.

CONCLUSIONS

A disproportionate amount of Medicare reimbursement went to top 1%. The highest earners appeared to earn the most from inpatient treatment codes and also used unbundled codes more often. Because billing code use is not regulated and often subjective, a deeper evaluation by the major surgical societies may be warranted.

Variability in Excess Lobectomy Billing Among US Thoracic Surgeons

BACKGROUND

Transparency in physician billing practices in the United States is lacking. Often, charges may vary substantially between providers and excess charges may be passed on to the patient. In this study, we evaluate Medicare charges and payments for minimally invasive lobectomy to obtain a sense of national billing practices and evaluate for predictors of higher charges.

METHODS

The 2018 Medicare Provider Utilization Data was queried to identify surgeons submitting charges for Video-Assisted Thoracoscopic Lobectomy. Excess charges were determined by each provider. Additional demographic variables were collected including geographic region for general surgery and cardiothoracic surgery training, years in practice, and current practice setting. A multivariate gamma regression was utilized to determine predictors of high billing practices.

RESULTS

A total of 307 unique providers submitted charges ranging from $1,104 to $25,128 with a median of $4,265. The average Medicare Payment amount ranged from $163 to $1,409, with a median of $1,056. Male surgeons were estimated to charge 1.3 times more than female surgeons, while those in an academic setting were estimated to charge 1.4 times more than private practice (p < 0.01). Surgeons practicing in the South or West were estimated to charge 0.76 and 0.81 times as much as those practicing in the Northeast (p < 0.01).

CONCLUSIONS

Billing practices vary widely across the United States. Charges submitted to Medicare likely represent a provider's charges across all payers. In today's healthcare economy, it is important for patients to understand the true cost of care and for providers to be mindful of reasonable and appropriate charges.

Outpatient apheresis billing: A photopheresis model shows that hospital price transparency data remain difficult to interpret

OBJECTIVES

The US health care payment system is complex and difficult to interpret. Although federal regulations require that more data, in the form of charges and negotiated rates, be made available, compliance remains variable. We review chargemaster and negotiated rate values for extracorporeal photopheresis (ECP) to assess this variability. We sought to determine the availability of chargemaster and negotiated rates for health care consumers and to assess compliance and pricing among institutions using ECP as a model for apheresis billing.

METHODS

We obtained ECP chargemaster data and negotiated rates from 20 institutions. We analyzed the availability of ECP chargemaster data and compared values with a previously published historic cohort. We evaluated the availability of negotiated rates and determined relative reimbursement using charge to reimbursement ratios. We determined calculated fines for hospitals based on bed size.

RESULTS

Chargemaster availability increased from 2019 to 2022, though only 65% (13/20) of hospitals had both chargemaster and negotiated rate data. Chargemaster prices increased significantly from 2019 to 2022 (range, $3,586.83-$34,043.00). We reviewed 1,191 negotiated rates, with institutions averaging 93.6 different rates (SD, 189.5). Negotiated rates were variable, ranging from $3,586.83 to $34,043.00 per procedure. Reimbursement was higher among private insurers compared with reported Centers for Medicare & Medicaid Services negotiated rates. Of the 35% (7/20) that lacked chargemaster and negotiated rates, institutions faced an average annual fine of $1,430,800.

CONCLUSIONS

Despite recent financial penalties, ECP pricing data are often unavailable or inadequate. Current available resources are unlikely to benefit the average health care consumer who requires ECP.

Billing and Utilization Trends for Hand Surgery Indicate Worsening Barriers to Accessing Care

BACKGROUND

Hospitals and providers may increase hand surgery charges to compensate for decreasing reimbursement. Higher charges, combined with increasing utilization of ambulatory surgical centers (ASCs), may threaten the accessibility of affordable hand surgery care for uninsured and underinsured patients.

METHODS

We queried the Physician/Supplier Procedure Summary to collect the number of procedures, charges, and reimbursements of hand procedures from 2010 to 2019. We adjusted procedural volume by Medicare enrollment and monetary values to the 2019 US dollar. We calculated weighted means of charges and reimbursement that were then used to calculate reimbursement-to-charge ratios (RCRs). We calculated overall change and r2 from 2010 to 2019 for all procedures and stratified by procedural type, service setting, and state where service was rendered.

RESULTS

Weighted mean charges, reimbursement, and RCRs changed by + 21.0% (from $1,227 to $1,485; r2 = 0.93), +10.8% (from $321 to $356; r2 = 0.69), and -8.4% (from 0.26 to 0.24; r2 = 0.76), respectively. The Medicare enrollment-adjusted number of procedures performed in ASCs increased by 63.8% (r2 = 0.95). Trends in utilization and billing varied widely across different procedural types, service settings, and states.

CONCLUSIONS

Charges for hand surgery procedures steadily increased, possibly reflecting an attempt to make up for reimbursements perceived to be inadequate. This trend places uninsured and underinsured patients at greater risk for financial catastrophe, as they are often responsible for full or partial charges. In addition, procedures shifted from inpatient to ASC setting. This may further limit access to affordable hand care for uninsured and underinsured patients.

Cost-Effectiveness Analysis of Frontline Polatuzumab-Rituximab, Cyclophosphamide, Doxorubicin, and Prednisone and/or Second-Line Chimeric Antigen Receptor T-Cell Therapy Versus Standard of Care for Treatment of Patients With Intermediate- to High-Risk Diffuse Large B-Cell Lymphoma

PURPOSE

Recent studies of polatuzumab vedotin and CD19 chimeric antigen receptor T-cell therapy (CAR-T) have shown significant improvements in progression-free survival over standard of care (SOC) for patients with diffuse large B-cell lymphoma. However, they are costly, and it is unclear whether these strategies, alone or combined, are cost-effective over SOC.

METHODS

A Markov model was constructed to compare four strategies for patients with newly diagnosed intermediate- to high-risk diffuse large B-cell lymphoma: strategy 1: polatuzumab-rituximab, cyclophosphamide, doxorubicin, and prednisone (R-CHP) plus second-line CAR-T for early relapse (< 12 months); strategy 2: polatuzumab-R-CHP plus second-line salvage therapy ± autologous stem-cell transplant; strategy 3: rituximab, cyclophosphamide, doxorubicin, vincristine, and prednisone plus second-line CAR-T for early relapse; strategy 4: SOC (rituximab, cyclophosphamide, doxorubicin, vincristine, and prednisone plus second-line salvage therapy ± autologous stem-cell transplant). Transition probabilities were estimated from trial data. Lifetime costs, quality-adjusted life-years (QALYs), and incremental cost-effectiveness ratios (ICERs) were calculated from US and Canadian payer perspectives. Willingness-to-pay (WTP) thresholds of $150,000 US dollars (USD) or Canadian dollars (CAD)/QALY were used.

RESULTS

In probabilistic analyses (10,000 simulations), each strategy was incrementally more effective than the previous strategy, but also more costly. Adding polatuzumab-R-CHP to the SOC had an ICER of $546,956 (338,797-1,199,923) USD/QALY and $245,381 (151,671-573,250) CAD/QALY. Adding second-line CAR-T to the SOC had an ICER of $309,813 (190,197-694,200) USD/QALY and $303,163 (221,300-1,063,864) CAD/QALY. Simultaneously adding both polatuzumab-R-CHP and second-line CAR-T to the SOC had an ICER of $488,284 (326,765-840,157) USD/QALY and $267,050 (182,832-520,922) CAD/QALY.

CONCLUSION

Given uncertain incremental benefits in long-term survival and high costs, neither polatuzumab-R-CHP frontline, CAR-T second-line, nor a combination are likely to be cost-effective in the United States or Canada at current pricing compared with the SOC.

The Markup on Orthopaedic Services: An Analysis of 2014-2019 Medicare Data and the Potential for Surprise Billing

BACKGROUND

Markups on charges for medical services have the potential to result in "surprise billing," especially for out-of-network and uninsured patients. Although previously analyzed in other surgical subspecialties, the distribution and level of cost-to-charge ratios (CCRs) for orthopaedic services have yet to be studied. Therefore, our analysis sought to evaluate the CCRs for orthopaedic surgery services provided to Medicare beneficiaries throughout the United States.

METHODS

Orthopaedic services provided to Medicare Part B beneficiaries between 2014 and 2019 were identified in the Physician & Other Practitioners database of the Centers for Medicare & Medicaid Services (CMS). CCRs, representing the ratio between the actual payment provided by CMS and the charge submitted by the provider, were calculated for each service. Descriptive statistics were calculated for CCRs at the national, state, and service-code levels. The coefficient of variation (CoV) was utilized to evaluate variability in CCRs across services and states. Additionally, Mann-Kendall tests were performed to evaluate trends in CCRs for included services over the time frame.

RESULTS

Our analysis included an annual mean of 47,247,928 services provided by a mean of 23,185 orthopaedic surgeons over the study period. In the non-facility setting, there was a decrease in median CCRs for orthopaedic surgery services (0.29 to 0.27; p = 0.024). No changes were demonstrated for facility-based services. Service codes related to trigger finger procedures (0.18 to 0.17; p = 0.004), physical therapy (0.40 to 0.36; p = 0.035), and new patient visits (0.52 to 0.46; p = 0.035) demonstrated significant decreases in median CCRs. Only shoulder arthroscopy demonstrated a significant increase in median CCR (0.09 to 0.10; p = 0.003). High dispersion in CCRs was demonstrated for 16 (80%) of the 20 evaluated services. Wide variations in CCRs were demonstrated across individual states (median, 0.57; interquartile range width, 0.53).

CONCLUSIONS

Our analysis demonstrated low and variable CCRs for commonly performed orthopaedic services in the U.S. These findings serve to inform and help improve related price transparency policies. Additionally, our analysis encourages increased efforts at preventing these low CCRs from limiting care in vulnerable populations.

Decreasing Medicare Utilization, Reimbursement, and Reimbursement-to-Charge Ratio of Reconstructive Plastic Surgery Procedures: 2010 to 2019

BACKGROUND

This study aimed to evaluate recent trends in utilization, reimbursement, and charges for reconstructive plastic surgery procedures billed to Medicare.

METHODS

We queried the Physician/Supplier Procedure Summary from the Centers for Medicare and Medicaid Services for procedures billed by plastic surgeons to Medicare Part B between 2010 and 2019. We collected service counts, charges, and reimbursements. We adjusted utilization by Medicare enrollment and adjusted monetary values for inflation. We calculated the weighted mean charge and reimbursement, which were used to calculate the reimbursement-to-charge ratio (RCR). We examined trends over time by calculating differences and performing correlation analyses of utilization, charges, reimbursement, and RCR for all procedures and for different procedural categories.

RESULTS

From 2010 to 2019, the overall enrollment-adjusted utilization for 912 reconstructive procedures decreased by 6.6% (r2 = 0.46). Utilization increased in certain procedural categories such as skin debridement (+36.9%, r2 = 0.48) and procedures of the breast (+114.9%, r2 = 0.48). Charges increased by 32.9% (r2 = 0.99), reimbursement decreased by 5.3% (r2 = 0.84), and RCR decreased by 28.7% (r2 = 0.99). Skin replacement/flaps/grafts procedures underwent the greatest relative decrease in reimbursement (-26.8%, r2 = 0.87). Reimbursement-to-charge ratio decreased for all procedural categories except for procedures of the auditory system.

CONCLUSIONS

In the past decade, Medicare utilization and reimbursement for reconstructive plastic surgery procedures decreased, whereas charges increased. This resulted in decreasing reimbursement relative to charged amounts. These findings raise concerns regarding the economic viability of providing plastic surgery services to an aging population and may impact patients' ability to access affordable plastic surgical care.

Increasing medicare charge-to-payment ratios for dermatologists from 2012 to 2017

Government-backed medical insurance plans have undergone significant changes in the last decade, but more information is needed to understand reimbursement trends, particularly for specialist medical services. The objective of this study was to identify the ratios of submitted dermatology service charges to allowed Medicare payments over the years. Further variables studied include regional or state variations, gender of provider, hierarchical condition category (HCC) risk scores of patient complexity, and number of services. Data were collected from publicly available Medicare Part B Provider Utilization and Payment Data: Physician and Other Supplier 2012-2017 datasets. All data analysis was performed on SAS 9.4 Statistical Software.Total dermatology related medicare charges-to-payment ratios steadily increased over the years (1.77 [in 2012], 1.82 [2013], 1.87 [2014], 1.95 [2015], 2.02 [2016], and 2.06 [2017]). This suggests that for every $2.06 charged in 2017, dermatology providers could expect $1 of actual payment. When further stratified into medical services vs. drug services, this upward trend remained for medical charges but drug service ratios have remained constant. There was also significant geographic variation in total medicare charges-to-payment ratios as states in the Midwest (mean total ratio: 2.48) had higher charges to payment gaps than states in the Northeast (2.26), West (2.16), and South (1.99; p = 0.01).This study identifies trends and variables associated with dermatology medicare payments. Providers may use this information to better understand changing payment structures in their own practices and hopefully these results can be valuable in future policy discussions.

The Price of Otologic Procedures: Variation in Markup by Surgical Procedure and Geography in the United States

OBJECTIVE

To characterize and analyze variation in price markup of seven common otologic surgeries by procedure and geographic region.

STUDY DESIGN

Retrospective Analysis of the Centers for Medicare and Medicaid Services database of 2017 Medicare Provider Utilization and Payment Public File.

SETTING

Inpatient and outpatient centers delivering Medicare-reimbursed services.

PATIENTS

Full sample of patients undergoing procedures with Medicare fee-for-service final action claims during 2017.

INTERVENTIONS

Seven procedures (myringotomy, tympanoplasty, mastoidectomy, tympanomastoidectomy stapedotomy/stapedectomy, cochlear implant, bone-anchored hearing aid).

MAIN OUTCOME MEASURES

Markup ratio (MUR) is defined as the ratio of total charges to Medicare-allowable-costs; Variation in MUR was measured using coefficient of variation (CoV).

RESULTS

Among all providers, the median MUR was 2.4 (interquartile range: 1.9-3.1). MUR varied significantly by procedure, from 2.3 for myringotomy to 8.7 for mastoidectomy (p < 0.01). MUR also varied significantly within procedure, with the least variation found in myringotomy (CoV = 0.46), and the greatest in cochlear implants (CoV = 0.92). Using the national average as baseline, MUR varied 71% between states, ranging from 1.75 to 6.24. Within the same state, significant variation was also noted, varying by 4% (CoV = 0.04) in Montana compared with 138% (CoV = 1.38) in Pennsylvania. MUR was not significantly correlated with patient comorbidity or Centers for Medicare and Medicaid Services risk scores.

CONCLUSIONS

There was significant variation in the price of otologic surgery across geographic regions and procedures. The MUR for otology is lower or comparable to that reported in other surgical fields.

Economic analysis of prenatal fetoscopic vs open-hysterotomy repair of open neural tube defect

OBJECTIVE

Fetal repair of an open neural tube defect (ONTD) by open hysterotomy has been shown to reduce the need for ventriculoperitoneal shunting and improve motor outcomes for infants, but increases the risk of Cesarean section and prematurity. Fetoscopic repair is an alternative approach that may confer similar neurological benefits but allows for vaginal delivery and reduces the incidence of hysterotomy-related complications. We sought to compare the costs of care from fetal surgery until neonatal discharge, as well as the clinical outcomes, associated with each surgical approach.

METHODS

This was a retrospective cohort study of patients who underwent prenatal ONTD repair, using either the open-hysterotomy or the fetoscopic approach, at a single institution between 2012 and 2018. Clinical outcomes were collected by chart review. A cost-consequence analysis was conducted from the hospital perspective, and included all inpatient and ambulatory hospital and physician costs incurred for the care of mothers and their infants, from the time of maternal admission for fetal ONTD repair up to postnatal maternal and infant discharge. Costs were estimated using cost-to-charge ratios for hospital billing and the Medicare physician fee schedule for physician billing.

RESULTS

Seventy-eight patients were included in the analysis, of whom 47 underwent fetoscopic repair and 31 underwent open-hysterotomy repair. In the fetoscopic-repair group, compared with the open-repair group, fewer women underwent Cesarean section (53% vs 100%; P < 0.001) and the median gestational age at birth was significantly higher (38.1 weeks (interquartile range (IQR), 35.2-39.1 weeks) vs 35.7 weeks (IQR, 33.9-37.0 weeks); P < 0.001). No case of uterine dehiscence was observed in the fetoscopic-repair group, compared with an incidence of 16% in the open-repair group. After adjusting for baseline characteristics, there was no significant difference in the total cost of care between the fetoscopic-repair and the open-repair groups (median, $76 978 (IQR, $60 312-$115 386) vs $65 103 (IQR, $57 758-$108 103); P = 0.458).

CONCLUSIONS

Fetoscopic repair of ONTD, when compared with the open-hysterotomy approach, reduces the incidence of Cesarean section and preterm delivery with no significant difference in total costs of care from surgery to infant discharge. This novel approach may represent a cost-effective alternative to improve maternal and neonatal outcomes for this high-risk population. © 2021 International Society of Ultrasound in Obstetrics and Gynecology.

Impact of reduced elective ophthalmic surgical volume on U.S. hospitals during the early coronavirus disease 2019 pandemic

PURPOSE

To estimate the financial impact of coronavirus disease 2019 (COVID-19)-related shutdowns on ophthalmic surgery performed at hospital outpatient departments (HOPDs) in the United States.

SETTING

Nationally representative sample of U.S. hospital payment and cost data.

DESIGN

Retrospective review and economic impact analysis.

METHODS

The Nationwide Ambulatory Surgery Sample (NASS) was used to identify ophthalmic surgical procedures and associated charges, which were performed at HOPDs. The highest volume elective ophthalmic procedures were identified. The total hospital cost and payment amount was calculated for each procedure using the Hospital Outpatient Prospective Payment System (OPPS) maintained by the Centers for Medicare & Medicaid Services. Net facility income (estimated payments less OPPS rates) was determined for each elective surgical procedure category and stratified by hospital teaching status.

RESULTS

In 2017, elective cataract, strabismus, and keratoplasty surgeries were performed 1 230 992 times at HOPDs. The total cost of these elective surgeries was 2350 million U.S. dollars (USD), with a total hospital payment of 3624 to 3786 million USD. This led to an estimated net income of 1278 to 1440 million USD overall to U.S. hospitals in the NASS dataset from elective ophthalmic surgery (approximately 107 to 120 million USD per month), with a larger proportion performed in teaching hospitals.

CONCLUSIONS

The cessation of elective ophthalmic surgeries at HOPDs during COVID-19 resulted in a significant loss of income for hospitals in the United States and teaching experiences for trainees at academic medical centers.

Discovering healthcare provider behavior patterns through the lens of Medicare excess charge

BACKGROUND

The phenomenon of excess charge, where a healthcare service provider bills Medicare beyond the limit allowed for a medical procedure, is quite common in the United States public healthcare system. For example, in 2014, healthcare providers charged an average of 3.27 times (and up to 528 times) the allowable limit for cataract surgery. Previous research contends that such excess charges may be indicative of the actual amount that providers bill to non-Medicare patients and subsequent cost-shifting behavior, where a healthcare provider tries to recoup underpayment by Medicare from privately insured, self-pay, out-of-network, and uninsured patients.

OBJECTIVES

The objective of this study is to examine the drivers of a provider's excess charge patterns, especially the extent to which the degree of excess charges may be associated with physician characteristics, Medicare reimbursement policy, or socioeconomic status and demographics of a provider's patient base.

METHODS

Using data from the 2014 Medicare Provider Utilization files, we identify three procedures with the highest variation in Medicare reimbursements to study the excess charge phenomenon. We then employ a two-step cluster analysis within each procedure to identify distinct provider groups.

RESULTS

Each procedure code yielded distinct healthcare provider segments with specific patient demographics and related behavior patterns. Cluster silhouette coefficients indicate that these segments are unique. Three random subsamples from each procedure establish the stability of the clusters.

CONCLUSIONS

For each of the three procedures investigated in this study, a sizeable number of healthcare providers serving poorer, riskier patients are often paid significantly lower than their peers, and subsequently have the highest excess charges. For some providers, excess charges reveal possible cost-shifting to private insurance. Patterns of excess charges also indicate an imbalance of market power, especially in areas with lower provider competition and access to health care, thus leading to urban-rural healthcare disparities. Our results reinforce the call for price transparency and an upper limit to overbilling.

The likely economic impact of fewer elective surgical procedures on US hospitals during the COVID-19 pandemic

BACKGROUND

To help control the coronavirus disease 2019 pandemic, elective procedures have been cancelled in most US hospitals by government order. The purpose of this study is to estimate national hospital reimbursement and net income losses owing to elective surgical procedure cancellation during the coronavirus disease 2019 pandemic.

METHODS

The National Inpatient Sample and the Nationwide Ambulatory Surgery Sample were used to identify all elective surgical procedures performed in the inpatient setting and in hospital-owned outpatient surgery departments throughout the United States. Total cost, reimbursement, and net income was determined for all elective surgical procedures.

RESULTS

The estimated total annual cost of elective inpatient and outpatient surgical procedures in the United States was $147.2 billion, and estimated total hospital reimbursement was $195.4 to $212.2 billion. This resulted in a net income of $48.0 to $64.8 billion per year to the US hospital system. Cancellation of all elective procedures would result in estimated losses of $16.3 to $17.7 billion per month in revenue and $4 to $5.4 billion per month in net income to US hospitals.

CONCLUSION

Cancellation of elective procedures during the coronavirus disease 2019 pandemic has a substantial economic impact on the US hospital system.

Economic implications of decreased elective orthopaedic and musculoskeletal surgery volume during the coronavirus disease 2019 pandemic

PURPOSE

In order to reduce viral spread, elective surgery was cancelled in most US hospitals for an extended period during the COVID-19 pandemic. The purpose of this study was to estimate national hospital reimbursement and net income losses due to elective orthopaedic surgery cancellation during the COVID-19 pandemic.

METHODS

The National Inpatient Sample (NIS) and the Nationwide Ambulatory Surgery Sample (NASS) were used to identify all elective orthopaedic and musculoskeletal (MSK) surgery performed in the inpatient setting and in hospital owned outpatient surgery departments throughout the USA. Total cost, reimbursement, and net income were estimated for all elective orthopaedic surgery and were compared with elective operations from other specialties.

RESULTS

Elective MSK surgery accounted for $65.6-$71.1 billion in reimbursement and $15.6-$21.1 billion in net income per year to the US hospital system, equivalent to $5.5-$5.9 billion in reimbursement and $1.3-$1.8 billion in net income per month. When compared with elective surgery from all other specialties, elective MSK surgery accounted for 39% of hospital reimbursement and 35% of hospital net income. Compared with all hospital encounters for all specialties, elective MSK surgery accounted for 13% of reimbursement and 23% of net income. Estimated hospital losses from cancellation of elective MSK surgery during 8 weeks of the COVID-19 pandemic were $10.9-$11.9 billion in reimbursement and $2.6-3.5 billion in net income.

CONCLUSION

Cancellation of elective MSK surgery for 8 weeks during the COVID-19 pandemic has substantial economic implications on the US hospital system.

Variation in Physician Charges and Medicare Payments for Hand Surgery

Purpose To assess national and state-level variation in physician charges (full amounts requested before payments are negotiated) and Medicare payments for common hand procedures. Materials and Methods Using the Medicare Provider Utilization and Payment Data Public Use File for 2012, we evaluated national and state variations in physician charges and Medicare payments for carpal tunnel release, trigger finger release, trigger finger injection, closed treatment of distal radius fracture, and interposition arthroplasty, intercarpal or carpometacarpal joints. We assessed variation, using the coefficient of variation. We also determined the correlation between charges and payments, as well as the association of patient volume with charges and payments. Results There was wide state-level variation in physician charges for carpal tunnel release (11-fold), trigger finger release (9.6-fold), and trigger finger injection (5.5-fold). On a national level, physician charges varied substantially for carpal tunnel release, trigger finger release, trigger finger injection, closed treatment of distal radius fracture, and interposition arthroplasty, intercarpal or carpometacarpal joints. Medicare payments varied to a lesser extent. The correlations between physician charges and Medicare reimbursements were not strong. Weak to no correlations were noted between patient volume and both charges and payments. Conclusion Physician charges for hand surgery vary substantially across states and nationally, and they do not correlate well with Medicare payments and surgeon volume. As the health care market transitions toward more restrictive physician networks and high-deductible plans, protecting uninsured and out-of-network patients from unexpected, high medical bills should be a policy priority. Type of Study/Level of Evidence Economic/Decision Analysis, Level III study.

Hospital Charges for Urologic Surgery Episodes of Care Are Rising Despite Declining Costs

OBJECTIVE

To investigate the temporal relationship of hospital charges relative to recorded costs for surgical episodes of care.

PATIENTS AND METHODS

This retrospective cohort study selected individuals who underwent any of 8 index urologic surgical procedures at 392 unique institutions from January 1, 2005, through December 31, 2015. For each surgical encounter, cost and charge data reported by hospitals were extracted and adjusted to 2016 US dollars. Trend analysis and multivariable logistic regression modeling were used to assess outcomes. The primary outcome was trend in median charge and cost. Secondary outcomes consisted of hospital characteristics associated with membership in the highest quartile of institutional charge-to-cost ratio.

RESULTS

Cohort-level median cost per encounter trended down from $6824 in 2005 to $5586 in 2015 (P for trend<.001), and charges increased from $20,210 to $25,773 during the same period (P for trend<.001). Hospitals in the highest quartile of institutional charge-to-cost ratio were more likely to be safety net, nonteaching, urban, lower surgical volume, smaller, and located outside the Midwest (P<.001 for each characteristic).

CONCLUSION

The pricing trends shown herein could indicate some success in cost-containment for surgical episodes of care, although higher hospital charges may be increasingly used to bolster reimbursement from third-party payers and to compensate for escalating costs in other areas.

Conceptual Considerations for Payment Bundling in Breast Reconstruction

Rising health care costs and quality demands have driven both the Centers for Medicare and Medicaid Services and the private sector to seek innovations in health system design by placing institutions at financial risk. Novel care models, such as bundled reimbursement, aim to boost value though quality improvement and cost reduction. The Center for Medicare and Medicaid Innovation is leading the charge in this area with multiple pilots and mandates, including Comprehensive Care for Joint Replacement. Other high-cost and high-volume procedures could be considered for bundling in the future, including breast reconstruction. In this article, conceptual considerations surrounding bundling of breast reconstruction are discussed.

Physician Specialty and Radiologist Characteristics Associated with Higher Medicare Patient Complexity

RATIONALE AND OBJECTIVES

Meaningfully measuring physician outcomes and resource utilization requires appropriate patient risk adjustment. We aimed to assess Medicare patient complexity by physician specialty and to further identify radiologist characteristics associated with higher patient complexity.

MATERIALS AND METHODS

The average beneficiary Hierarchical Condition Category (HCC) risk scores (Medicare's preferred measure of clinical complexity) were identified for all physicians using 2014 Medicare claims data. HCC scores were compared among physician specialties and further stratified for radiologists based on a range of characteristics. Univariable and multivariable analyses were performed.

RESULTS

Of 549,194 physicians across 54 specialties, the mean HCC risk score was 1.62 ± 0.75. Of the 54 specialties, interventional radiology ranked 4th (2.60 ± 1.29), nuclear medicine ranked 16th (1.87 ± 0.45), and diagnostic radiology ranked 21st (1.75 ± 0.61). Among 31,175 radiologists, risk scores were higher (P < 0.001) for those with teaching (2.03 ± 0.74) vs nonteaching affiliations (1.72 ± 0.61), practice size ≥100 (1.94 ± 0.70) vs ≤9 (1.59 ± 0.79) members, urban (1.79 ± 0.69) vs rural (1.67 ± 0.59) practices, and subspecialized (1.85 ± 0.81) vs generalized (1.68 ± 0.42) practice patterns. Among noninterventional radiology subspecialties, patient complexity was highest for cardiothoracic (2.09 ± 0.57) and lowest for breast (1.08 ± 0.32) imagers. At multivariable analysis, a teaching affiliation was the strongest independent predictor of patient complexity for both interventional (β = +0.23, P = 0.005) and noninterventional radiologists (β = +0.21, P < 0.001).

CONCLUSIONS

Radiologists on average serve more clinically complex Medicare patients than most physicians nationally. However, patient complexity varies considerably among radiologists and is particularly high for those with teaching affiliations and interventional radiologists. With patient complexity increasingly recognized as a central predictor of clinical outcomes and resource utilization, ongoing insights into complexity measures may assist radiologists navigating emerging risk-based payment models.

Variation in Emergency Department vs Internal Medicine Excess Charges in the United States

IMPORTANCE

Uninsured and insured but out-of-network emergency department (ED) patients are often billed hospital chargemaster prices, which exceed amounts typically paid by insurers.

OBJECTIVE

To examine the variation in excess charges for services provided by emergency medicine and internal medicine physicians.

DESIGN, SETTING, AND PARTICIPANTS

Retrospective analysis was conducted of professional fee payment claims made by the Centers for Medicare & Medicaid Services for all services provided to Medicare Part B fee-for-service beneficiaries in calendar year 2013. Data analysis was conducted from January 1 to July 31, 2016.

MAIN OUTCOMES AND MEASURES

Markup ratios for ED and internal medicine professional services, defined as the charges submitted by the hospital divided by the Medicare allowable amount.

RESULTS

Our analysis included 12 337 emergency medicine physicians from 2707 hospitals and 57 607 internal medicine physicians from 3669 hospitals in all 50 states. Services provided by emergency medicine physicians had an overall markup ratio of 4.4 (340% excess charges), which was greater than the markup ratio of 2.1 (110% excess charges) for all services performed by internal medicine physicians. Markup ratios for all ED services ranged by hospital from 1.0 to 12.6 (median, 4.2; interquartile range [IQR], 3.3-5.8); markup ratios for all internal medicine services ranged by hospital from 1.0 to 14.1 (median, 2.0; IQR, 1.7-2.5). The median markup ratio by hospital for ED evaluation and management procedure codes varied between 4.0 and 5.0. Among the most common ED services, laceration repair had the highest median markup ratio (7.0); emergency medicine physician review of a head computed tomographic scan had the greatest interhospital variation (range, 1.6-27.7). Across hospitals, markups in the ED were often substantially higher than those in the internal medicine department for the same services. Higher ED markup ratios were associated with hospital for-profit ownership (median, 5.7; IQR, 4.0-7.1), a greater percentage of uninsured patients seen (median, 5.0; IQR, 3.5-6.7 for ≥20% uninsured), and location (median, 5.3; IQR, 3.8-6.8 for the southeastern United States).

CONCLUSIONS AND RELEVANCE

Across hospitals, there is wide variation in excess charges on ED services, which are often priced higher than internal medicine services. Our results inform policy efforts to protect uninsured and out-of-network patients from highly variable pricing.