Monday, February 16, 2015

Medicare is changing the way it pays surgeons

Starting in 2017, Medicare will end global payments for operations. The current payment scheme combines preoperative, operative, and postoperative care into one fee. When the change occurs, each of those events will have to be billed separately—otherwise known as “unbundling.”

I missed this news when it first appeared late last year and thank one of my blog followers who calls himself Artiger for bringing it to my attention. An Advisory Board piece summarized the situation.

After analyzing a number of claims, Medicare came to the conclusion that it was paying for duplicate services. What a revelation! I could have told them that without a claims analysis.

For many years, certain surgical specialists have been delegating preoperative evaluations for “medical clearance” and postoperative management of everything but the incision to internists and hospitalists. Since the global fee was meant to include pre-and postop care, Medicare was indeed paying twice for the same service.

Representatives of the American College of Surgeons expressed concern that sicker patients would need more in-hospital postoperative visits thereby incurring more bills. [If they receive more care, maybe they should pay more.] They also worried that since postoperative care was covered under the global fee, patients might forgo office visits after surgery because of increased costs.

The unbundling of the global fee may have other unintended consequences. Since preoperative and postoperative care reimbursement will be separated from the fee for the operation itself, surgeons will be paid less for performing surgery.

Most surgeons would rather operate than make rounds and may look to perform more surgery to make up for the loss of income. This could end up costing Medicare more money.

With global payments, there is no incentive for a surgeon to keep a patient in the hospital longer than absolutely necessary. When the payment method changes, the exact opposite will exist. And surgeons who aren’t very busy might schedule more postoperative office visits to make up the difference caused by the reduction in the surgical fee.

This might all become moot anyway because Health and Human Services Secretary Sylvia Matthews Burwell has proposed that 30% of Medicare payments be converted to a non-fee-for-service model by the end of next year rising to 50% by the end of 2018.

According to a news@JAMA article, doctors may be given incentives to join Accountable Care Organizations. Quality indicators such as readmissions and infections currently applied to hospital fees might be imposed on doctors too. More bundled payments for acute care illnesses may be created. [This of course is the exact opposite of the plan to unbundle global surgery fees. I'm getting confused].

One thing I'm sure of is that none of this is making me regret that I retired.


artiger said...

Lots of us have griped about global periods after surgery (yes, I have been guilty of it too), making this a good example of being careful what you wish for. I expect more than one "practice consultant" to start offering "analysis" and other services to find the right blend of procedures and postop visits to maximize revenue (for a healthy fee, of course).

Anonymous said...

Artiger I have already seen this from Covidien.

frankbill said...

The fee for service was not in the patients best interest.

artiger said...

Frank, I'd probably agree, but comprehensive health insurance isn't in the patient's best interest either.

Skeptical Scalpel said...

Fee for service has its problems, but when surgeons are on salary, they may defer needed procedures because "what the hell, I'm getting paid whether I operate or not."

artiger said...

Scalpel, that may be true for some, but when the people paying those surgeons don't see a return on investment, those surgeons usually get paid less (or start looking for new jobs).

frankbill said...

If you are on salary the medical center is being paid the fee for service. Since they want to maximize profit they can pressure you to defer procedures.

Skeptical Scalpel said...

If a hospital pays its surgeons a bonus for productivity, that will be an incentive to do more cases and you will have the same problem as you do with fee for service.

artiger said...

One possible good thing about it...coding should become a little less complicated. We shouldn't need as many modifiers anyway.

Skeptical Scalpel said...

I don't think coding will be less complicated when ICD-10 becomes mandatory.

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