Disparity in Medicaid physician payments for vascular surgery.

OBJECTIVE: Medicare reimbursements are standardized nationwide on the basis of resource-dependent inputs of physicians' time, intensity, practice costs, and malpractice costs, whereas Medicaid payments vary and are determined by individual states. Our objectives were to determine Medicaid reimbursement to physicians for common vascular procedures for the seven states in the Northeast that compose the New England Society for Vascular Surgery and to compare Medicaid payments with Medicare. METHODS: Using publicly available data, we obtained Medicaid physician payments in Connecticut, Massachusetts, Maine, New Hampshire, New York, Rhode Island, and Vermont for 10 commonly performed vascular surgery procedures. For comparison, Medicare physician payments for these procedures were adjusted for regional differences using Medicare geographic payment cost indices. Descriptive statistics were calculated by state; Wilcoxon signed rank test was used to compare fees, and one-way analysis of variance was used to compare variance. RESULTS: Medicaid payments varied widely by state. Within individual states (except Vermont), there was no relationship between Medicaid and Medicare payments. Medicaid reimbursement for common vascular procedures ranged from 25% to 91% of Medicare rates and had up to a threefold variation in payment among states for a single procedure. The mean Medicaid payment was 60% of Medicare payment. The greatest state-to-state variance in payment was for open abdominal aortic repair (standard deviation, $227.31); the least was for femoral artery exposure (standard deviation, $31.86). For a Medicaid-based, frequency-weighted analysis of services, New Hampshire exhibited the lowest payments (43% Medicare) and Vermont the highest (80% Medicare). CONCLUSIONS: Among the seven Northeast states considered, with the exception of Vermont, there is no logical relationship between Medicaid and Medicare payments. Because Medicare payments are determined by the Centers for Medicare and Medicaid Services with consideration of resource-based inputs, we conclude that in six of the seven states, Medicaid payments bear no relationship to resource utilization. With Medicaid expansion, access to vascular procedures may be limited by payments insufficient to meet resource needs.

Does the Institution of a Statewide Trauma System Reduce Preventable Mortality and Yield a Positive Return on Investment for Taxpayers?

BACKGROUND: In July 2009, Arkansas began to annually fund $20 million for a statewide trauma system (TS). We studied injury deaths both pre-TS (2009) and post-TS (2013 to 2014), with attention to causes of preventive mortality, societal cost of those preventable mortality deaths, and benefit to tax payers of the lives saved. STUDY DESIGN: A multi-specialty trauma-expert panel met and reviewed records of 672 decedents (290 pre-TS and 382 post-TS) who met standardized inclusion criteria, were judged potentially salvageable, and were selected by a proportional sampling of the roughly 2,500 annual trauma deaths. Deaths were adjudicated into sub-categories of nonpreventable and preventable causes. The value of lives lost was calculated for those lives potentially saved in the post-TS period. RESULTS: Total preventable mortality was reduced from 30% of cases pre-TS to 16% of cases studied post-TS, a reduction of 14%. Extrapolating a 14% reduction of preventable mortality to the post-TS study period, using the same inclusion criteria of the post-TS, we calculate that 79 lives were saved in 2013 to 2014 due to the institution of a TS. Using a minimal standard estimate of $100,000 value for a life-year, a lifetime value of $2,365,000 per person was saved. This equates to an economic impact of the lives saved of almost $186 million annually, representing a 9-fold return on investment from the $20 million of annual state funding invested in the TS. CONCLUSIONS: The implementation of a TS in Arkansas during a 5-year period resulted in a reduction of the preventable death rate to 16% post-TS, and a 9-fold return on investment by the tax payer. Additional life-saving gains can be expected with ongoing financial support and additional system performance-improvement efforts.

Use of a Novel Accounting and Grouping Method for Major Trunk Injury-Analysis of Data from a Statewide Trauma Financial Survey.

Major trunk trauma is common and costly, but comparisons of costs between trauma centers (TCs) are rare. Understanding cost is essential to improve quality, manage trauma service lines, and to facilitate institutional commitment for trauma. We have used results of a statewide trauma financial survey of Levels I to IV TC to develop a useful grouping method for costs and clinical characteristics of major trunk trauma. The trauma financial survey collected billing and clinical data on 75 per cent of the state trauma registry patients for fiscal year 2012. Cost was calculated by separately accounting for embedded costs of trauma response and verification, and then adjusting reasonable costs from the Medicare cost report for each TC. The cost-to-charge ratios were then recalculated and used to determine uniform cost estimates for each patient. From the 13,215 patients submitted for the survey, we selected 1,094 patients with major trunk trauma: lengths of stay ≥ 48 hours and a maximum injury of AIS ≥3 for either thorax or abdominal trauma. These patients were then divided into three Injury Severity Score (ISS) groups of 9 to 15, 16 to 24, or 25+ to stratify patients into similar injury groups for analysis of cost and cost drivers. For abdominal injury, average total cost for patients with ISS 9 to 15 was $17,429. Total cost and cost per day increased with severity of injury, with $51,585 being the total cost for those with ISS 25. Similar trends existed for thoracic injury. Use of the Medicare cost report and cost-to-charge ratios to compute uniform costs with an innovative grouping method applied to data collected across a statewide trauma system provides unique information regarding cost and outcomes, which affects quality improvement, trauma service line management, and decisions on TC participation.

Are Surgeons Being Paid Fairly by Medicaid? A National Comparison of Typical Payments for General Surgeons.

BACKGROUND: Both the Medicare (MCR) and Medicaid (MCD) programs turn 50 this year. Medicare has developed a national resource-based payment methodology for physicians' services, with broad input by specialty societies, and MCD payments are set by individual states by various means. STUDY DESIGN: We have conducted the first national comparison of payment methodology of MCD vs MCR for procedures commonly delivered by general surgeons. Using the most recent Centers for Medicare and Medicaid Services' Medicare data for frequency of allowed charges for general surgeons, we selected the most frequently billed procedures and gathered data from the 50 states for MCD and MCR payments. We determined the "Medicaid discount" (MCD payment minus MCR payment) expressed as dollars and percent, as well as dollars paid per relative value of work. RESULTS: We have discovered wide variations in MCD payments among states for the same procedures, demonstrating unexplained "discounts" of MCD payments in relationship to MCR. We found that MCD payments show wide variations across the states, with many states paying far less than MCR for common, essential procedures. CONCLUSIONS: These findings call into question the fairness of MCD reimbursement for general surgery services in the United States. This discount to MCR could act as a disincentive for surgeons to care for some patients, based on the state of residence. These unexplained discounts could have considerable long-term effects for patients dependent on the MCD program. Our study should act as a stimulus for states to examine their payment methodologies to provide more uniform and fairer payments for surgical procedures.

Determining the hospital trauma financial impact in a statewide trauma system.

BACKGROUND: There have been no comprehensive studies across an organized statewide trauma system using a standardized method to determine cost. STUDY DESIGN: Trauma financial impact includes the following costs: verification, response, and patient care cost (PCC). We conducted a survey of participating trauma centers (TCs) for federal fiscal year 2012, including separate accounting for verification and response costs. Patient care cost was merged with their trauma registry data. Seventy-five percent of the 2012 state trauma registry had data submitted. Each TC's reasonable cost from the Medicare Cost Report was adjusted to remove embedded costs for response and verification. Cost-to-charge ratios were used to give uniform PCC across the state. RESULTS: Median (mean ± SD) costs per patient for TC response and verification for Level I and II centers were $1,689 ($1,492 ± $647) and $450 ($636 ± $431) for Level III and IV centers. Patient care cost-median (mean ± SD) costs for patients with a length of stay >2 days rose with increasing Injury Severity Score (ISS): ISS <9: $6,787 ($8,827 ± $8,165), ISS 9 to 15: $10,390 ($14,340 ± $18,395); ISS 16 to 25: $15,698 ($23,615 ± $21,883); and ISS 25+: $29,792 ($41,407 ± $41,621), and with higher level of TC: Level I: $13,712 ($23,241 ± $29,164); Level II: $8,555 ($13,515 ± $15,296); and Levels III and IV: $8,115 ($10,719 ± $11,827). CONCLUSIONS: Patient care cost rose with increasing ISS, length of stay, ICU days, and ventilator days for patients with length of stay >2 days and ISS 9+. Level I centers had the highest mean ISS, length of stay, ICU days, and ventilator days, along with the highest PCC. Lesser trauma accounted for lower charges, payments, and PCC for Level II, III, and IV TCs, and the margin was variable. Verification and response costs per patient were highest for Level I and II TCs.

The use of intraservice work per unit of time (IWPUT) and the building block method (BBM) for the calculation of surgical work.

OBJECTIVE: We will review the contribution to the Medicare Fee Schedule (MFS) by the techniques of intensity of work per unit of time (IWPUT), the building block methodology (BBM), and the work accomplished by the American College of Surgeons General Surgery Coding & Reimbursement Committee (GSCRC) in using IWPUT/BBM to detect undervalued surgical procedures and recommend payment increases. SUMMARY BACKGROUND DATA: The MFS has had a major impact on surgeons' income since its introduction in 1992 by the Centers for Medicare and Medicaid (CMS) and additionally has been adopted for use by many commercial insurers. A major component of MFS is physician work, measured as the relative value of work (RVW), which has 2 components: time and intensity. These components are incorporated by: RVW = time x intensity. METHODS: This work formula can be rearranged to give the IWPUT, which has become a powerful tool to calculate the amount of RVW performed by physicians. Most procedures are valued by the total RVW in the global surgical package, which includes pre-, intra-, and postoperative care for a time after surgery. Summing these perioperative components into RVW is called the building block methodology (BBM). RESULTS: Using these techniques, the GSCRC increased the values for 314 surgery procedures during a recent CMS 5-year review, resulting in an increase to general surgeons of roughly 76 million dollars annually. CONCLUSIONS: The use of IWPUT/BBM has been instrumental to correct payment for undervalued surgical procedures. They are powerful methods to measure RVW across specialties and to solve reimbursement, compensation, and practice management problems facing surgeons.