Study Reveals How Much Procedures Outpay Office Visits

August 14, 2013

In terms of physician work per hour, Medicare spends almost 4 times as much for a screening colonoscopy and almost 5 times as much for cataract extraction as it does for a complicated office visit, according to a new study published online August 12 in JAMA Internal Medicine.

These findings illustrate the need to assign a higher relative value to cognitive-oriented care that occurs in exam rooms, write coauthors Christine Sinsky, MD, from the Department of Internal Medicine, Medical Associates Clinic PC, Dubuque, Iowa, and David Dugdale, MD, from the Division of General Internal Medicine, Department of Medicine, University of Washington, Seattle. Otherwise, procedure-oriented care will continue to burgeon at the expense of primary care — and the nation's well-being.

"We believe the strong financial incentives described compromise access to primary care and ultimately contribute to the lower quality and higher costs experienced in the United States compared with other developed countries," Dr. Sinsky and Dr. Dugdale write.

The pay advantage enjoyed by proceduralists is a hot topic. Last month, an article in the Washington Post reported that the Centers for Medicare & Medicaid Services (CMS) inflates the pay of proceduralists by using unreliable estimates of physician work time from a committee of the American Medical Association (AMA). According to CMS, physicians spend about 75 minutes on a screening colonoscopy, including same-day care before and after the procedure, but the Washington Post reported that the actual time is about 30 minutes.

Dr. Sinsky told Medscape Medical News her study was conceived far in advance of the Washington Post's story. "Our article provides more analytic and scientific information than what was presented in the Washington Post," said Dr. Sinsky.

Deep Dive Into RVUs

The study by Dr. Sinsky and Dr. Dugdale dives deep into the relative value unit (RVU) system behind the Medicare fee schedule for physicians. CMS assigns an RVU, which is essentially a numerical weight, to every service on the fee schedule. To arrive at a reimbursement for a service, CMS multiplies its RVU by a dollar figure — known as the conversion factor — and another factor reflecting geographic variation in physician practice costs.

An RVU is its own complex world. It consists of 3 component RVUs: one for the physician's practice overhead, another for the physician's malpractice insurance premium, and a third for physician-specific work, measured by stress, skill, effort, and time. CMS bases its physician work RVUs largely on the recommendations of the AMA/Specialty Society Relative Value Scale Update Committee, more commonly referred to as RUC. The 31-member committee, in turn, obtains its information on work RVU components, such as time, from surveys conducted by various medical societies. RUC critics say primary care physicians are underrepresented on the committee.

The study in JAMA Internal Medicine focuses on the physician work RVU when it comes to procedures vs evaluation and management (E/M) services, the bread and butter of primary care. The study confines itself to screening colonoscopies, billed to Medicare with the code G0121; cataract extraction (66984); and a level 4 office visit with an established patient (99214).

Similar to the Washington Post article, the study by Dr. Sinsky and Dr. Dugdale finds fault with CMS time estimates for physician work that are based on RUC surveys. CMS assumes a physician spends 30 minutes on a screening colonoscopy, not counting pre- and postoperative care that day. However, a study published in the New England Journal of Medicine in 2006 came up with a figure of 13.5 minutes for the test, Dr. Sinsky and Dr. Dugdale note.

CMS also assumes physician work before and after a colonoscopy will eat up another 45 minutes. Dr. Sinsky and Dr. Dugdale shrink that figure to 10 minutes. They arrive at a total physician work time of 23.5 minutes (13.5 minutes for the procedure plus 10 minutes before and after), which is significantly shorter than the 30-minute estimate reported in the Washington Post.

To calculate the hourly pay for a colonoscopy based just on the physician work element, the authors multiplied the work RVU, which is 3.69, by the number of procedures a physician could perform in 1 hour, which is 2.55 (60 minutes divided by 23.5 minutes). The result is then multiplied by $34.02, the Medicare conversion factor for 2014, to yield an hourly rate of $320.

In contrast, doing the same math for a 99214 office visit yields an hourly rate of just $87 in terms of the physician work RVU. The colonoscopy rate is 368% higher.

In calculating the hourly rate for the 99214 office visit, Dr. Sinsky and Dr. Dugdale factored in 35 minutes as the physician work time, 25 of them for the face-to-face visit. That is the same face-to-face time assumed by CMS. Dr. Sinsky told Medscape Medical News the CMS figure reflects clinical reality. The other 10 minutes cover physician work before and after the visit. CMS assumes 15 minutes' worth. Dr. Sinsky said she went with 10 minutes for the sake of consistency because the calculations for colonoscopy as well as cataract extraction also hinge on 10 minutes of before-and-after care.

The authors' comparison of a 99214 office visit to a cataract extraction is even more complicated because the Medicare reimbursement for the latter includes 4 office visits and one half of a discharge service coded 99238. Dr. Sinsky and Dr. Dugdale stripped out all of these E/M services to focus on the procedure plus same-day care immediately before and after. They calculated that Medicare's hourly rate for the procedure's work RVU is $423, which is 486% greater than the equivalent figure for a 99214 office visit.

Pay Disparity Deters Physicians From Choosing Primary Care

The gap between what Medicare pays for procedures vs what it pays for E/M services, the authors write, encourages specialists such as ophthalmologists and gastroenterologists to avoid providing cognitive-oriented care in favor of more procedures. In addition, the payment differential discourages physicians from choosing a career in primary care.

To make matters worse, the authors note, most private health plans tend to copy Medicare's policies. As a result, the tilt toward procedure-oriented care becomes even more pronounced.

Dr. Sinsky is hopeful about Congress eliminating the disparities.

"I think policy-makers in general are recognizing the need to pay for value and recognizing some of the counterproductive incentives built into RVUs," Dr. Sinsky told Medscape Medical News.

The authors have disclosed no relevant financial relationships.

JAMA Intern Med. Published online August 12, 2013. Abstract

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