Economic impact on physicians and hospitals of proposed changes in Medicare reimbursement for coronary interventions

Abstract

Background The federal government is implementing changes in reimbursement for angioplasty and coronary stenting. These include reductions in physician reimbursement and a redesignation of intracoronary stents to a different diagnosis-related group than other methods of intracoronary intervention. Objective The aim of this study was to examine the financial impact on physicians and hospitals of proposed federal reimbursement policies for percutaneous coronary revascularization procedures. Methods We modeled the financial effects of 3 different stenting strategies: strategy I is the most conservative, with stents reserved for addressing lab complications; strategy II stents are used for suboptimal results after attempts at conventional percutaneous transluminal coronary angioplasty (PTCA); strategy III is the most aggressive, with initial stenting of all accessible lesions. We used economic data on PTCA and stent costs from a 1996 dataset and made assumptions about PTCA and stent success rates and restenosis rates based on published data. Results Under current reimbursement policies, physician revenues and profits are approximately equal under all 3 stenting strategies. After the proposed changes, there is a slight financial incentive for physicians to pursue the more aggressive strategy III, but the major financial effect is a substantial overall decline in revenues with any of the 3 strategies. For hospitals, the present situation strongly favors the more conservative strategies, but after the proposed changes the more aggressive stenting strategies will be more profitable, thus realigning physician and hospital incentives. Health care delivery organizations that combine physician and hospital income streams achieve the greatest financial stability. Conclusions Current reimbursement policies for angioplasty and stenting have created misaligned incentives between physicians and hospitals. Proposed changes do not present physicians with large economic incentives to pursue aggressive versus conservative stent strategies but substantially address the current disparity in hospital financial incentives. (Am Heart J 1999;137:258-63.)