Decrease In Reimbursement Research Articles

No Relief Yet From Medicare Physician Pay Cuts

No Relief Yet From Medicare Physician Pay Cuts

Trauma/Critical Care Surgeon: A Specialist Gasping for Air

In the last 10 years, trauma/critical care has become less attractive because of the decreasing surgical caseload, the nocturnal work hours, and the economics of the practice. Nevertheless, during the same period, the number of verified trauma centers has significantly increased. This study assesses the economic drive behind this dichotomy. Over a 1-year period, we collected financial data on 1,907 trauma patients for both Level I trauma centers and trauma/critical care surgeons. Financial data, including payor source, cost, reimbursement, margin, and reimbursement-to-charge and reimbursement-to-direct cost ratios, were calculated. For commercial- and government-insured patients, the reimbursement-to-direct cost ratio was 2-and 35-fold greater, respectively, for the trauma centers than for the trauma/critical care surgeons. For uninsured patients, the addition of local government funds allowed the trauma center to cover direct cost with no margin. In contrast, even with the addition of supplemental salary dollars from the institution, for every dollar in direct cost generated by the trauma/critical care surgeons in caring for uninsured patients, they recovered 55 cents, or a loss of 45 cents per direct cost dollar spent. The economic dichotomy that exists between trauma centers and trauma/critical surgeons is significant. It drives institutional growth and, at the same time, discourages surgeons from entering the subspecialty. As physician reimbursement decreases and the number of uninsured patients increases, this economic dichotomy will amplify. Over the next decade, without a significant adjustment, the subspecialty is in danger of extinction.

Effort Builds for “Fair and Equitable” Reimbursement: Health Care Economics Committee Prepares for AMA’s Coding Review

Effort Builds for “Fair and Equitable” Reimbursement: Health Care Economics Committee Prepares for AMA’s Coding Review

THE VALUE OF YOUR TIME: EVALUATION OF EFFECTS OF CHANGES IN MEDICARE REIMBURSEMENT RATES ON THE PRACTICE OF UROLOGY

Several reforms to Medicare have changed the reimbursement of physicians from payment based on usual, customary or reasonable charges to a resource based relative value scale. We studied the effect of these changes on hourly reimbursement rates for various services provided by urologists. We used a previously published national survey of urologists who provided information regarding physician time and work required before, during and after most frequently performed urological services, including during the global period. For comparison mean operative times during the last year at our private hospital for several common urological procedures were obtained. Medicare reimbursement rates for common urological procedures and evaluation and management (E&M) codes for 1995, 1999 and 2004 were acquired from our department's billing office and used to calculate reimbursement rate per hour. There was a steady increase in reimbursement for outpatient services and a decrease in reimbursement for surgical procedures. For E&M codes the reimbursement rates per hour for 2004 represent a mean 51% increase since 1995. However, surgical procedures have had a mean decrease of 28.5% in reimbursement rates per hour. There was remarkable consistency in rates with 7 of the 9 surgical procedures losing between 25.5% and 32% in reimbursement. In 1995 outpatient E&M services were the least profitable at less than half the hourly rate of operative procedures. In 2004 office cystoscopy and transrectal ultrasound biopsy of the prostate had the highest reimbursement and, with the exception of shock wave lithotripsy, there was a minimal difference in hourly reimbursement rates between common surgical procedures and E&M services. Changes in Medicare reimbursement during the last decade have resulted in significant changes in rates for different urological services. The near equity in reimbursement rates for E&M and surgical services will likely have an increasingly important role in the future practice of urology.

Revenue benefit of measuring transport distance with GPS

One effect of the Balanced Budget Act (BBA) of 1997 is a decrease in reimbursement for air medical providers. Reimbursement for rotor wing (RW) patient transport is based on “loaded miles”—statute miles flown with the patient. One way to optimize reimbursement and regulatory compliance is to accurately record patient loaded miles flown.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (PL 108–73; MMA), signed into law in December 2003, represents the biggest expansion of Medicare in the program’s history. In addition to adding outpatient prescription drug coverage, the bill contains scores of other changes affecting the nation’s 40 million older and disabled Americans and the providers who care for them. Responsibility for implementing the complex law and educating beneficiaries about their new options falls to the Centers for Medicare and Medicaid Services (CMS), which is in the process of issuing regulations and preparing outreach materials for seniors to meet the deadlines mandated by Congress. During last year’s debate on the Medicare bill, the American Geriatrics Society (AGS) actively lobbied for a number of provisions in the legislation, including improvements in the physician fee schedule, and enactment of the Geriatric Care Act (GCA). We are pleased to report that the MMA replaces a scheduled 4.5% decrease in reimbursement fees paid to geriatric health providers with an increase of 1.5% in 2004 and 2005 and incorporates two provisions based on the GCA, which are summarized below. In 2004 AGS is committed to educating its members about how the legislation will affect geriatric providers and their patients while pursuing other elements of its legislative agenda. Below is a summary of some of the major provisions of the MMA. Readers are also encouraged to consult the AGS Web page devoted exclusively to the law, located at http:// www.americangeriatrics.org/policy/medicare_info.shtml.

Practice management II: update on ancillary services

Delivering medical care services financially is approaching a crisis situation in the United States. One of the major factors causing this to occur is adoption of the “Resource-Based Relative Value Scale” (RBRVS), which was adopted by the Health Care Financing Administration (now CMS) in 1992. This system assigns a fixed worth to each and every aspect of medicine. The RBRVS reimbursements have decreased 39% since 1992 and the cost of living as measured by the consumer price index (CPI) has increased by over 42%. If this net decrease in reimbursement and increase in cost of living is translated to the effect on a physician’s practice, in the past 15 years, total operating costs per physician has increased 103.3% from $155,000 to $315,000. In this same time period, the CPI has increased by 61.2%. 1 Holden S. Economics of medical care. MGMA. 2003; : 1-15 Google Scholar CMS in 2003 reversed the scheduled 4.4% decrease in the conversion factor to 34.592. However, musculoskeletal practices will still experience a 1.6% decrease in reimbursement as a result of the relative value unit (RVU) changes occurring in our specialty, which were effective as of March 1, 2003.

Job Opportunities Inundate the Internet

Job Opportunities Inundate the Internet

Two Careers in One: An Analysis of the Earning Power of Certification in Surgical Critical Care

The core of general surgery supports multiple disciplines, each of which entails similar operative care for different diseases. The purpose of this study was to compare variations of practice patterns of four general surgeons to define the general surgical core that each shared in common, and to determine the effect of subspecialization in surgical critical care on the scope of practice and efficiency of revenue production. The charges and collections of four members of the same surgical faculty were analyzed for the 6 months beginning July 1, 2000. Three members practiced general surgery with additional specialization in surgical oncology, surgical endoscopy, and trauma/critical care. The fourth covered all aspects of general surgery, including in-house trauma call, but not surgical critical care. Data were stratified by Current Procedural Terminology code and categorized as operative, bedside care (which included minor procedures), and evaluation/consultation care. Scope of practice was defined as the proportion of operative cases represented by the 10 most frequently performed procedures. General surgical core was defined as those cases that were preformed by all four surgeons at the same frequency. Efficiency of revenue generation was defined as collection rate for these procedures divided by the established, budgeted collection rate for each practitioner. All results were compared using chi(2) with significance accepted at p < 0.05. Fifteen operative procedures were performed with equal frequency by each surgeon and represented a broad spectrum of surgical disease. These procedures constituted a similar proportion of operative practice for all specialists (mean, 45.2%; 90% confidence limit, 3.5%), yet occupied 70% of the trauma surgeon's 10 most frequent surgical procedures versus 36% for the surgical oncology and surgical endoscopy. Charges generated by the provision of surgical critical care, especially in bedside procedures commonly performed in the intensive care unit, exceeded all of the other three surgeons and equaled the revenue generated by operative care. Although overall revenue-generating efficiency was less for the trauma surgeons (57% of eventual collections vs. 67%, chi(2) p = 0.1), immediate reimbursement for critical care was higher than for any other clinical services. These data demonstrate that subspecialization in surgical critical care provides valid additional earning capacity to surgical practitioners. Reimbursement is at least as good as for traditional operative care, and fees generated can actually exceed revenue from operative care. With impending decreases in global reimbursement, and attempts to unbundle operative fees, this additional capability becomes an important consideration in potential career choice, as well as a major component in the fiscal stability of trauma programs.

Cost-quality trade-offs in dialysis care: A national survey of dialysis facility administrators

Dialysis facilities face important trade-offs between cost and quality under constrained capitated reimbursement. How management at dialysis facilities makes decisions affecting cost and quality of care and views opportunities and threats is unknown. We conducted a national survey of dialysis facility administrators. We asked administrators what changes they would make in response to increases or decreases in reimbursement, their views on linking dialysis care payment to quality-of-care measures, and their views on providing patients with treatment options and outcomes information. One hundred fifty-seven of 280 dialysis facility administrators (56%) responded. If dialysis reimbursement were to increase by 20%, the five most common responses were to: improve patient education programs (62% of respondents), improve facility amenities (42%), purchase new equipment (30%), provide more money for staff salaries (28%), and increase number of nursing staff (21%). Conversely, if dialysis reimbursement were to decrease by 20%, the most common responses were to: limit staff salary (45% of respondents), decrease nursing staff (41%), not replace dialysis equipment (43%), increase dialyzer reuse (37%), and return less to investors (36%). Differences in rank order of responses were observed according to professional training of the administrator and profit status of the facility. Administrators uniformly believe that it is very acceptable to provide facility-specific outcomes data to the public, as well as information on modalities of treatment provided by facilities. However, administrators varied in their views regarding whether reimbursement should be based on quality by using a process-of-care measure, such as the average dose of dialysis, or an outcome-of-care measure, such as case-mix-adjusted mortality rates. We conclude that increases in facility reimbursement generally would be used by dialysis facility administrators for the benefit of patients, whereas decreases (or inflation erosion) in payment rates might compromise staffing. US dialysis administrators support sharing treatment options and outcomes information with patients, but appear to be ambivalent with regard to linking reimbursement to adequacy of dialysis or patient outcomes. These results have important implications regarding proposed changes in the US capitated dialysis payment rate and current efforts to empower consumers of dialysis care. © 2002 by the National Kidney Foundation, Inc.

A Decade of Decline: An Analysis of Medicare Reimbursement for Vascular Surgical Procedures

Despite inflation and a robust economy, standard Medicare reimbursements for vascular surgical procedures have progressively declined. The objective of this analysis was to quantitatively and objectively evaluate the decline of vascular surgical reimbursement over the past decade. In this study, data for the analysis of specific vascular surgical procedures was obtained from the National Center for Health Statistics-National Hospital Discharge Survey (NCHS-NHDS) for all vascular procedures as reported by ICD-9-CM codes. The average Medicare reimbursement for each of the specified procedures for 1990 was compared to that of 2001 and the percent change in average reimbursement over this period was calculated. Comparisons between 1990 and 2001 dollar amounts were made after correction for inflation using the consumer price index. This correction factor allows for the calculation of the actual percentage reduction in "real dollars" that is reflected in buying power. We found significant decreases in Medicare reimbursement for each of the vascular procedures included in this analysis. Despite national economic prosperity, there was an average 41% decrease in the buying power per case for vascular surgical procedures over the past decade. We feel that these reductions in reimbursement are overzealous and need to be reexamined.

Development of a Successful PICC Insertion Program

N ationwide, hospital administrators are looking for methods to contain costs as a result of reimbursement decreases. Where N teams exist and budget cuts become necessary at a medical institution, usually the N team is the first to be cut. Valley Lutheran Medical Center (VLMC) is a 237-bed urban hospital that serves a high percentage of Medicare patients. The nursing staff performs all aspects of N therapy, but it is not feasible to train every registered nurse to place peripherally inserted central venous catheters (PICCs). 111erefore, an Ambulatory Treatment Unit (ATV) was established as an outpatient N therapy clinic where nurses were trained to perfOffil PICC insertions. The nurses in this unit already were proficient in peripheral IV catheter insertion and management of central venous catheters, so the addition of PICC insertions was not considered to be a problem for the nursing staff. After the nurses were trained and began performing PICC insertions, the excellent outcomes and low costs associated with nurse placed PICC lines contributed to increased orders for the placement of PICCs by physicians. Case managers also encouraged physicians to order these lines due to the cost savings. During this same period of time, the ATU was discovered as an excellent alternative to homecare and the number of PICCs placed and the patient volume of the ATV increased simultaneously. At the same time, physicians in the radiology department started inserting PICC lines, but VLMC did not have an angiography suite and they preferred not to insert these lines using fluoroscopy equipment. Scheduling conflicts arose if the nurse could not place the PICC and the patient had to be sent to an already overbooked radiology department. A solution to this situation was needed mat would: • Provide early assessment for the appropriate device; • Provide placement at the appropriate point of stay; • Provide cost savings to the hospital; and • Improve or maintain quality of care.

Financial impact of tertiary care in an academic medical center.

To analyze the financial impact of three complex vascular surgical procedures to both an academic hospital and a department of surgery and to examine the potential impact of decreased reimbursements. The cost of providing tertiary care has been implicated as one potential cause of the financial difficulties affecting academic medical centers. Patients undergoing revascularization for chronic mesenteric ischemia, elective thoracoabdominal aortic aneurysm repair, and treatment of infected aortic grafts at the University of Florida were compared with those undergoing elective infrarenal aortic reconstruction and carotid endarterectomy. Hospital costs and profit summaries were obtained from the Clinical Resource Management Office. Departmental costs and profit summary were estimated based on the procedural relative value units (RVUs), the average clinical cost per RVU ($33.12), surgeon charges, and the collection rate for the vascular surgery division (30.2%) obtained from the Faculty Group Practice. Surgeon work effort was analyzed using the procedural work RVUs and the estimated total care time. The analyses were performed for all payors and the subset of Medicare patients, and the potential impact of a 15% reduction in hospital and physician reimbursement was analyzed. Net hospital income was positive for all but one of the tertiary care procedures, but net losses were sustained by the hospital for the mesenteric ischemia and infected aortic graft groups among the Medicare patients. In contrast, the estimated reimbursement to the department of surgery for all payors was insufficient to offset the clinical cost of providing the RVUs for all procedures, and the estimated losses were greater for the Medicare patients alone. The surgeon work effort was dramatically higher for the tertiary care procedures, whereas the reimbursement per work effort was lower. A 15% reduction in reimbursement would result in an estimated net loss to the hospital for each of the tertiary care procedures and would exacerbate the estimated losses to the department. Caring for complex surgical problems is currently profitable to an academic hospital but is associated with marginal losses for a department of surgery. Economic forces resulting from further decreases in hospital and physician reimbursement may limit access to academic medical centers and surgeons for patients with complex surgical problems and may compromise the overall academic mission.

Physician work effort and reimbursement for ruptured abdominal aortic aneurysms

Two major flaws have been previously identified in the resource-based relative value scale (RBRVS): (1) inaccurate estimation of physician work effort; and (2) RBRVS compression, which results in undervaluation of major surgical procedures. The impact of RBRVS for physicians treating patients with ruptured abdominal aortic aneurysms (RAAAs) has not been previously reported and is important owing to the severity of the illness, the potential to quantitate actual work effort, and the high percentage of these patients covered by Medicare. All patients were studied who underwent surgery for RAAAs during a 5-year period encompassing the implementation of RBRVS. Analysis included all physician services including vascular surgeons, anesthesiologists, and all other medical specialists. Total work effort was quantitated for each specialty in minutes/patient. The financial data were obtained by reviewing all professional bills and reimbursements. Cost of service was calculated to include physician compensation, practice overhead costs, and malpractice expenses. In all, 84 patients underwent repair of a RAAA with a mortality rate of 42%. Medicare was the primary insurance for 87% of patients. The cost of service exceeded the reimbursement by 50% for vascular surgeons, resulting in an average loss of $1,593/patient. Actual operative time represented only 24% of total surgical work effort. Early death and a length of stay (LOS) < or = 1 day for 24 patients resulted in a reimbursement rate of $5.98/minute for surgeons. This gain was significantly offset by 30 patients with a LOS > or = 14 days, resulting in a reimbursement rate of $1.94/minute for vascular surgeons. Over the 5-year period there was a trend of decreasing reimbursement for vascular surgeons (P <0.005) but not other physicians. Vascular surgeons incurred a 28% decrease in reimbursement over the study period. Physician reimbursement under RBRVS for the treatment of patients with RAAAs is inadequate to cover the costs of providing this care. Reimbursement trends and potential changes to the practice component of the RBRVS will further aggravate the losses involved in caring for these very ill patients. Vascular surgeons must continue to provide input to the Health Care Financing Administration to help correct inequities built into RBRVS.

Assessment and selection considerations: ESRD patient and family education materials and media.

Education has long been an integral component of the care of end-stage renal disease patients and their families. The health care environment of the 1990s led to increase in the numbers and acuity of patients and a decrease in professional staff and reimbursement. A basic understanding of the patient education process, assessment of educational materials, adult learning principles, and empowerment is essential for the health care professional responsible for assessing and selecting patient education materials and media. This article provides an overview of the education process, assessment of materials and media (content, scope and depth, readability, clarity and design features), and selection of materials and media based on learner needs and characteristics. The features of four types of materials and media that affect selection and purchasing decisions for the individual patient or for an agency or group of patients are also presented. Special considerations about developing in-house materials are addressed throughout the article.

Ambulatory surgery marketing to primary care physicians.

The leaders of health care organizations across the country are facing significant pressure to improve the quality of their services, reduce operating costs, and adjust to decreases in reimbursement. Survival of a surgery center is achieved when physicians work together to decrease their vulnerability to outside forces and increase their ability to reach desired objectives. Improved communication, operational efficiency, and cost effectiveness are the strategic imperatives. As competition for patient referrals increases among providers, in the midst of a national trend, a surgery center marketing program must be well organized and carefully designed to meet the needs of all its customers. A surgery center that can strategically place itself as a critical link between the surgical specialist and the gatekeeper will survive and prosper in the current health care world.

Problems Associated With Medicare: The authors reply

We appreciate Dr. Noel's interest in our commentary; however, we disagree with his assertion that Medicare has become a mandatory welfare program—because no means test exists for Medicare coverage. Clearly, the decrease in reimbursement for patients receiving Medicare is related to the increasing cost of Medicare to taxpayers. In addition, one of the major causes of the inflation of medical-care costs in the United States is cost shifting from patients who receive Medicare benefits to other payers. If Medicare were an actual welfare program, a means test would be available to determine eligibility for benefits. A means test would have the positive effect of providing a benefit to patients who are actually in need while helping to decrease government outlays and eliminating the cost shifting necessitated by the ban on balance billing. Dr. Noel is correct in his comment that patients who are indeed capable of paying the entire physician's fee are essentially subsidized by all other payers. Federal and other state requirements to accept mandatory assignment must be recognized for what they contribute to the inflation of health-care costs—an unnecessary supplement for persons completely capable of fulfilling their obligations. We recognize the political sensitivities faced by elected representatives in Washington. Nonetheless, until Congress recognizes that the limitation of resources will necessitate fundamental changes in the administration of the Medicare program, including a means test and more reasonable deductible and copayment levels, achieving control of spiraling medical costs will be impossible. Problems Associated With MedicareMayo Clinic ProceedingsVol. 67Issue 9PreviewIn the April 1992 issue of the Mayo Clinic Proceedings (pages 385 to 388), Drs. Gracey and Wood discuss the resource-based relative value scale in the commentary entitled “Physician Payment Reform: A Survival Manual for Physicians.” They failed, however, to indicate what is probably the most important aspect of the enabling legislation, the Omnibus Budget Reconciliation Act of 1989. With the passage of this law, Congress changed Medicare from a funding mechanism for insurance to a mandatory welfare program for elderly persons. Full-Text PDF

The cost:benefit ratio of acute intervention for myocardial infarction: Results of a prospective, matched pair analysis

Parallel to the increased acceptance of intervention for acute myocardial infarction, there has been a decrease in financial resources and reimbursement. To ascertain the relative cost to benefit of intervention, we evaluated 78 matched pairs of acute myocardial infarction patients from a prospective data base of 507 consecutive patients presenting with infarction from May 1986 to July 1987. The pairs were matched for age (mean 61 years), sex (68% male), and infarct location (43% anterior). Intervention (thrombolytics and/or percutaneous transluminal coronary angioplasty [PTCA]) was only applied to patients at less than 6 hours from symptom onset. Nonintervention patients were subsequently considered for angiography and revascularization (PTCA, coronary artery bypass grafting [CABG]) based on clinical criteria. Clinical outcome was evaluated by in-hospital mortality and uncomplicated status (free of angina, heart failure, or arrhythmias) at 72 hours. Intervention was associated with decreased mortality (5.3% versus 13%, p = 0.16) and increased uncomplicated course (43% versus 19%, p < 0.001) as compared with patients not receiving intervention. Hospital procedures for the intervention and nonintervention group were as follows: diagnostic cardiac catheterization (99% versus 51%); PTCA (60% versus 0%); and CABG (14% versus 19%), respectively. The mean cumulative hospital and professional charges were $31,684 for the intervention group and $29,022 for the nonintervention group ( p = 0.50). In conclusion, despite the potential marked incremental expense of technology associated with intervention for acute myocardial infarction, this analysis demonstrates that benefit in clinical outcome can be derived without substantially increased costs.