Highest-CMS-Paid Surgeons Bill for Far More Services Than Lowest

Marcia Frellick

March 17, 2016

Surgeons who are paid the most by Centers for Medicare & Medicaid services (CMS) bill for five times the number of services as the lowest-paid surgeons, according to a study published online February 26 in Surgery.

"The reasons for the significant degree of variation we noted are incompletely understood and warrant further investigation, but they do point to a need to consider whether our current incentive structure is ideal in the current care environment," write Jonathan Bergman, MD, MPH, from the Department of Urology and the Department of Family Medicine, David Geffen School of Medicine at the University of California, Los Angeles, and the Veterans Health Affairs-Greater Los Angeles, and colleagues.

The authors note that until now, the wide variation in overall payment between surgeons was well recognized, but it was not clear whether the higher-paid surgeons were treating more patients or billing for more services per beneficiary.

To find out, they analyzed CMS's Medicare Part B Provider Utilization and Payment Data for 2012 and found that the number of services billed went up steadily with level of pay. The services-per-beneficiary ratios for the 20th, 40th, 60th, and 80th percentiles of provider pay (lowest to highest amounts) were 1.6, 2.2, 3.1, and 5, respectively (n = 83,376).

The researchers acknowledge that some of the variation may come from differences in patient population, or from factors related to providers, but say that would not explain the large differences in services per beneficiary between CMS provider income levels.

Charges Outpace Payments Three to One

Medicare charges outpaced payments by three to one, and that ratio did not vary by how much surgeons were paid. The inflated charges may not affect insured people, but because Medicare charges are used as a baseline by most insurance companies for their own charges, this inflation affects both the uninsured and those paying out of pocket.

The study also found that it is not the high-intensity operating room procedures that are driving the inflated costs, but the low-cost procedures in outpatient clinics.

Of the payments to surgeons, 29% were for new and established outpatient visits or eye exams, and 11% were for injection of ranibizumab or aflibercept.

Therefore, reform should likely target office-based procedures and events, the researchers conclude.

Ideas for Future Models

"That high-earning clinicians achieve high reimbursement by ordering disproportionate services when controlled for beneficiaries suggests that consideration should be given to implementation of alternative payment models, with a subsequent move away from fee-for service," the authors write. Such alternatives include accountable care organizations and expanding bundled payments.

A hybrid of current models may help contain costs, Dr Bergman and colleagues explain. They cite the Veterans Administration and the safety net models in which physician pay is separated from service billing. Both models got better results than Medicare's fee-for-service model, they add.

Under the safety net fixed-resource structure, providing additional services to one beneficiary limits the ability to provide for others.

"[I]mplementing interventions to ensure that necessary care is delivered and unnecessary care is not, may help bridge the value gap that leaves the United States healthcare system as an outlier among industrialize countries," the authors conclude.

The authors have disclosed no relevant financial relationships.

Surgery. Published online February 25, 2016. Abstract

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