Traditional fee-for-service Medicare payment systems and fragmented patient care: the backdrop for non-operating room procedures and anesthesia services.

Achieving fundamental reform of the health care system to improve patient outcomes will take decades of effort and a major shift in financial, medical, and political behaviors that have built up since the beginning of health insurance in the United States. To the extent that the present payment systems contribute to the high cost, poor quality, and lack of accountability that characterizes today's health care delivery system, there is hope that reforms are within reach.

Cost of radiotherapy versus NSAID administration for prevention of heterotopic ossification after total hip arthroplasty.

PURPOSE: Heterotopic ossification (HO), or abnormal bone formation, is a common sequela of total hip arthroplasty. This abnormal bone can impair joint function and must be surgically removed to restore mobility. HO can be prevented by postoperative nonsteroidal anti-inflammatory drug (NSAID) use or radiotherapy (RT). NSAIDs are associated with multiple toxicities, including gastrointestinal bleeding. Although RT has been shown to be more efficacious than NSAIDs at preventing HO, its cost-effectiveness has been questioned. METHODS AND MATERIALS: We performed an analysis of the cost of postoperative RT to the hip compared with NSAID administration, taking into account the costs of surgery for HO formation, treatment-induced morbidity, and productivity loss from missed work. The costs of RT, surgical revision, and treatment of gastrointestinal bleeding were estimated using the 2007 Medicare Fee Schedule and inpatient diagnosis-related group codes. The cost of lost wages was estimated using the 2006 median salary data from the U.S. Census Bureau. RESULTS: The cost of administering RT was estimated at $899 vs. $20 for NSAID use. After accounting for the additional costs associated with revision total hip arthroplasty and gastrointestinal bleeding, the corresponding estimated costs were $1,208 vs. $930. CONCLUSION: If the costs associated with treatment failure and treatment-induced morbidity are considered, the cost of NSAIDs approaches that of RT. Other NSAID morbidities and quality-of-life differences that are difficult to quantify add to the cost of NSAIDs. These considerations have led us to recommend RT as the preferred modality for use in prophylaxis against HO after total hip arthroplasty, even when the cost is considered.

ASCs: we can't drive 65. Physicians group says CMS' new ASC compensation rate, two-thirds of what hospitals make, would be a 'death blow'.

Under the CMS' new payment system, ambulatory surgery centers will be reimbursed at only 65% of what hospitals receive for Medicare patients. While ASCs say this could cause them to turn away Medicare patients, Paul Briggs, left, of not-for-profit Presbyterian Healthcare Services, Albuquerque, says the rule will level the playing field between hospitals and ASCs.

Current procedural terminology, Resource-based Relative Value Scale, and the Center for Medicare and Medicaid Services: overview.

Coding and payment methodology for physician professional services has been standardized through the introduction of the Current Procedural Terminology, which is maintained by the American Medical Association. The codes contained within this dataset are used by health care professionals to describe their services to payers. Inherent in the development of the procedural codes, the Resource Based Relative Value Scale Update Committee recommends physician work relative value units and practice expense and professional liability inputs to the Center for Medicare and Medicaid Services. This article provides an overview of the processes in place that permit regular updates in physician payment continually to be updated.

Economic burden of revision hip and knee arthroplasty in Medicare enrollees.

UNLABELLED: The economic burden to Medicare due to revision arthroplasty procedures has not yet been studied systematically. The economic burden of revisions was calculated as annual reimbursements for revision arthroplasties relative to the sum total reimbursements of primary and revision arthroplasties. We evaluated this revision burden for total hip and knee arthroplasties through investigation of trends in charges and reimbursements in the Medicare population (Parts A and B claims from 1997-2003), while taking into account age and gender effects. Mean annual economic revision burdens were 18.8% (range, 17.4-20.2%) and 8.2% (range, 7.5-9.2%) for total hip arthroplasties and total knee arthroplasties, respectively. Procedural charges increased while reimbursements decreased over the study period, with higher charges observed for revisions than primary arthroplasties. Reimbursements per procedure were 62% to 68% less than associated charges for primary and revision total hip and knee arthroplasties. The effect of age and gender on reimbursements varied by procedure type. Unless some limiting mechanism is implemented to reduce the incidence of revision surgeries, the diverging trends in reimbursements and charges for total hip and knee arthroplasties indicate that the economic impact to the Medicare population and healthcare system will continue to increase. LEVEL OF EVIDENCE: Prognostic study, level II-1 (retrospective study). See Guidelines for Authors for a complete description of levels of evidence.

A cost comparison of medical management and transurethral needle ablation for treatment of benign prostatic hyperplasia during a 5-year period.

PURPOSE: We performed an analysis comparing the cost of medical management with TUNA therapy for a 5-year period. MATERIALS AND METHODS: Published costs for tamsulosin, finasteride, transurethral needle ablation (TUNA, Medtronic, Inc., Minneapolis, Minnesota) and transurethral resection of the prostate were used to construct a cost analysis model comparing medication with TUNA. The model analyzed monotherapy with an alpha-blocker (tamsulosin) and a 5alpha-reductase inhibitor (finasteride), combination therapy using both medications, and a mixed scenario using monotherapy and combination therapy. Published data were used to estimate the rate of surgical intervention in patients initially treated with medications or TUNA. RESULTS: Tamsulosin monotherapy was less expensive than TUNA for 5 years ($3,485 for tamsulosin vs $4,811 for TUNA year 5). Finasteride monotherapy reaches a break-even point with TUNA during year 5 ($4,867 for finasteride vs $4,811 for TUNA). Combination therapy reaches a break-even point with TUNA after approximately 2 years 7 months of treatment ($4,515 for combination therapy vs $4,572 for TUNA) and the mixed scenario breaks even with TUNA at approximately year 4 ($4,696 for medical management vs $4,645 for TUNA). CONCLUSIONS: The TUNA procedure compares favorably to combination medical therapy for the treatment of benign prostatic hyperplasia on a cost basis. alpha-Blocker monotherapy is less costly than TUNA while 5alpha-reductase inhibitor monotherapy is approximately equivalent to TUNA for 5 years. The TUNA procedure is less expensive than combination medical management for 5 years, with a break-even point at approximately 2 years 7 months.

Should an academic radiation oncologist be allowed to "opt out" of medicare?

Federal law permits physicians to "opt out" of Medicare. When a radiation oncologist chooses this option, he or she may neither bill nor collect from Medicare, but may legally attempt to charge and collect what he or she considers the value of services provided to Medicare-eligible patients. Many academic faculty practice plans permit members to opt out. Even if it is permissible for a radiation oncologist to opt out of Medicare, is it appropriate? The question raises significant ethical and economic issues as one attempts to balance the good of the individual faculty member against the good of the clinical faculty as a whole. In this commentary, the authors offer the principal arguments in favor of and against permitting a faculty radiation oncologist to opt out. They conclude by recommending broad faculty oversight over such decisions.

Reimbursement risks with radiologist extenders: there is no free lunch!

There is great allure in the concept of using qualified health care providers to assist radiologists and radiation oncologists, increasing efficiency and possibly even improving patient care delivery. However, physician services are most commonly reimbursed under a system that is resource based, and the physician work and practice expense components of reimbursement for existing procedure codes are periodically reexamined to ensure their appropriate rank in this "relative value system." Also, as new codes are developed, demonstrable physician work and practice expenses will determine the relative values for the new procedures. In both cases, the type of individual who actually performs different portions of a procedure will determine the reimbursement level. In addition, the total reimbursement must be appropriately apportioned between the physician involved and the facility where the service is delivered. This article examines some of the potential impacts on procedure coding and radiologist and radiation oncologist reimbursement schedules if physician extenders perform work previously performed by physicians. It also examines possible shifts in reimbursement from physician to facility if an extender is employed by a facility.

Medicare payment changes and physicians' incomes.

An effort to control the physician portion of Medicare expenditures and to narrow the income gap between primary care and procedure-based physicians was effected through t he enactment of the Medicare Fee Schedule (MFS). To determine whether academic and private sector physicians' incomes had demonstrated changes consistent with payment changes, we collected income information from surveys of private sector physicians and academic physicians in six specialties: (1) family practice; (2) general internal medicine; (3) psychiatry; (4) general surgery; (5) radiology; and (6) anesthesiology. With the exception of general internal medicine, the anticipated changes in Medicare revenue were not closely associated with income changes in either the academic or private sector group. Academic physicians were underpaid, relative to their private sector counterparts, but modestly less so at the end of the period examined. Our findings suggest that using changes in payment schedules to change incomes in order to influence the attractiveness of different specialties, even with a very large payer, may be ineffective. Should academic incomes remain uncompetitive with private sector incomes, it may be increasingly difficult to persuade physicians to enter academic careers.

Positron emission tomography scanning: a primer.

PET is one of the most exciting advancements in medicine in many years. Its ability to image physiology rather than anatomy, combined with the wide range of organic "probes" or molecules that can be utilized, offer remarkable possibilities for medical imaging in the coming years.

Results of continual devaluation of cardiothoracic surgical codes by the HCFA between 1984 and 1999.

BACKGROUND: The devaluation of surgical procedural services by Medicare began in 1989 as a result of the federal government's adoption of the Resource Based Relative Value Scale, a method of redistribution of payments to physicians from surgical to primary care services. This method gave to the Health Care Financing Administration (HCFA) effective and complete control of Medicare payments to physicians for the first time. The resultant decrease in the nominal dollar value is well understood, but the effect of changes in inflation frequently is not calculated into the reported loss. METHODS: A method of determining the true extent of this devaluation using the nominal dollar decrease plus the effect of inflation was presented in 1995. RESULTS: Since then, repeated devaluation by the HCFA and other third parties plus continual inflation has further eroded the remuneration for cardiothoracic surgical services. Three different sets of data are used to determine the devaluation of five cardiothoracic operations. One set shows the change between 1988 and 1998; one the change between 1988 and 1999; and one the change between 1984 and 1999. CONCLUSIONS: Depending on the geographic location, it appears that the remuneration for pulmonary procedures between 1988 and 1999 decreased 35% to 60%. Similarly, depending on the years reviewed (between 1984 and 1999) and the geographic location, the fee for cardiac procedures decreased 46% to 69%.