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Editorial

Appropriate Payment Will Follow Quality Care

From the General Surgery Coding and Reimbursement Committee, American College of Surgeons, and Coding and Reimbursement Committee, American Society of Breast Surgeons, Assistant Professor of Surgery, College of Medicine, University of Arkansas for Medical Sciences, Little Rock, Arkansas.

Correspondence: Address correspondence to: Charles D. Mabry, MD, FACS, 1801 W. 40th Suite 7B, Pine Bluff, AR 71603; Fax: 870-535-5458; E-mail: cdmabry{at}msn.com

In the article by Lucci et al. ⁽¹⁾, the authors correctly opine that Medicare does not pay according to patient outcomes, but instead pays physicians based upon the work performed by them on a scale relative to other procedures and encounters. They also are correct in noting that morbidity associated with a larger operation (mastectomy) is greater than for a lesser procedure (lumpectomy). To these facts we all will agree. However, the authors then use those two facts to propound that surgeons will somehow not perform the best procedure for the patient, because pay for an operation is not proportional to its benefit. Rarely has there ever been quite a leap of conclusions following from such a superficial gathering of the facts.

Let us more fairly and completely examine the background of surgical reimbursement by Medicare, including the current reimbursement for breast procedures, and then explore the ramifications of wishing for a different payment mechanism. One note of caution to the authors – you should be careful with your wish, as you may actually get it.

The current Medicare fee schedule underwent a paradigm shift in physician payment in the early 1990s. From that point onward, physicians would thereafter be paid by a formula that reimbursed physicians proportional to the work they provided, as opposed to their historical charges for their services. Unfortunately, Dr. Lucci and his co-authors present only one portion of the complete picture of physician reimbursement mechanics. There is a significant amount of research, thought, and deliberation that was invested into the current payment system. The system that we have, although very far from perfect, does take into account the differences in procedures across the specialty spectrum, the differences in procedures within a specialty, the differences in diseases, and then attempts to compensate on the basis of resources expended by the physician.^2–5

The authors neglect to point out that this change from a historical charge-basis to one based upon measured work, was significantly the result of law – not an administrative decision by some faceless bureaucrat. Section 1848(c)(2)(A) of OBRA 1989 authorized the Secretary of Health and Human Services (HHS) to establish the relative values for the Resource Based Relative Value Scale (RBRVS) physician fee schedule. This law was the result of recommendations made by the Physician Payment Review Commission (PPRC) and from consultations with many organizations representing physicians. Hence, elected officials and the rule of law determine in large part how surgeons are paid today. HHS and the Centers for Medicare and Medicaid (CMS) administratively determine the payment amounts based upon Congressional mandate, and as a result – complaints with the current system, etc. should rightly be directed to your Representative or Senator – for they alone can change the existing laws.⁶

Understanding how the RBRVS system is managed will shed some light upon the seeming paradox in payment for the various breast procedures noted in the article. Payment for a procedure is determined by a process that first involves a committee of the American Medical Association called the Relative Value Update Committee (AMA RUC). The RUC has representatives from every major specialty society and meets three times per year to consider the values for new and established procedures. Surgeons performing breast and oncology operations should be reassured that they have been well represented in this whole process by members of the American College of Surgeons (ACS) as well as the American Society of Breast Surgeons, among others.^7,8

This valuation of a procedure is done by a collaborative process with the various specialty societies conducting surveys of the amount of work, stress, intensity of effort, and resources consumed for a given procedure in comparison with other procedures. These societies then recommend values for a given procedure that are relative to the values of other procedures. The RUC then deliberates upon the data from the survey process and recommends a final value for a given procedure for both the work component (Relative Value of Work-RVW) and practice expenses. These recommendations then go to CMS for a final decision and valuation, with these values being published in the Federal Register for public comment and then eventually as a Final Rule.

It may come as a surprise to the authors, but nowhere in this Congressionally mandated reimbursement process does the outcome of the patient enter into the equation. Instead, physicians are paid on the basis of how much work and practice expense they provide while caring for a patient. As a generalization, practice expense is determined by measuring the actual supplies, labor, and time that delivery of a procedure consumes. Work, the other major component, is broken down into small segments for measurement. For surgical procedures with a global period, the amount of time spent intraoperatively multiplied by the intensity of that operation determines the intraoperative work. That number added to the preoperative and postoperative work equals the total work of a surgical procedure. Thus, for two operations with the same preoperative and postoperative work, and with the same intensity of the surgery, they would vary in value only by the differences in intraoperative time. Said another way, as mandated by law, the main drivers for the amount of work (payment) associated with a given procedure are generally: intraoperative time, intensity of that procedure, and the number of postoperative visits (hospital and office) associated with that surgery.

To this point, the intensities of procedures on the breast are all roughly the same, as are the preoperative work amounts. Therefore, the main differences in payment between these three procedures (segmental mastectomy with either axillary lymph node dissection or sentinel lymph node dissection or modified radical mastectomy) lies in the amount of time it takes to do each procedure and the amount of post-operative hospital/clinic visits required. It is not surprising that the modified radical mastectomy takes longer to perform, requires more hospital as well as clinic visits than the other two procedures. Post-operative hospital stays for segmental mastectomy are uncommon, and office follow-up visits are similar for all three procedures. The result of this math is that the surgeon has to expend more time, effort, and resources on patients treated with a mastectomy than the other two operations. It is imminently reasonable to most observers that Medicare therefore pays the surgeon more money as compensation for performing the operation that requires the greater amount of total time and work.

In contradistinction to the author’s statement, "The current Medicare reimbursement system has no formal mechanism for consistently recognizing and adjusting payment considerations. . ." the current system, in truth, has had a robust review process for existing and new procedure codes since its inception. By law, CMS (and by extension the RUC) reviews all procedures every five years to ensure that no distortions occur between procedures due to changing patient characteristics, technological advances, disease presentations, etc.^9,10 The current breast procedures mentioned in their article have undergone thorough scrutiny in at least one, and in some cases, two five-year reviews.^11,12 No significant changes in these breast procedure values have been made or judged to be warranted by any of the specialty societies or the RUC.^13,14

Two final considerations to mull over: 1) do the authors really want to get their wish for payment tied primarily to outcomes?; and 2) where is the evidence to support this notion that surgeons will elect an operation on the basis of a small difference in reimbursement for these three procedures?

Assuming that the authors got their wish, and Medicare decided to reimburse on the basis of outcomes, then how would we measure what is a "good" or a "bad" outcome for all of the procedures in the Medicare Fee Schedule? If the authors clamor for an increase in their payment for "good outcomes," then do they also accept and agree with the notion of a reduction in their payment for "bad outcomes"? Many tried and true surgical procedures would have at best equivocal outcomes for the measures they themselves tout (numbness, pain, return to work). As was mentioned above, the methodology that the Federal government must use for physician reimbursement is required to fit all providers. Therefore, under this methodology, for instance, what would be the outcome measures for purely diagnostic procedures that have no outcomes? Most importantly, what would the reimbursement amount be under their method, for the surgeons who spend long hours caring for patients with terminal illnesses or injuries that have morbid or mortal outcomes?

Most importantly, the authors present absolutely no whiff of data to demonstrate any shift or change in surgical procedures performed based upon financial considerations. This is not surprising, as even the author’s own math shows the difference in payment for performing a mastectomy versus a segmental mastectomy and sentinel lymph node dissection is less than $300. In this day of well-educated patients, informed consent, peer review, and tumor database analysis, do the author’s really believe that a well-trained and motivated surgeon would perform a worse operation for a few ounces of silver? I certainly don’t. However, if money were the prime motive, then the surgeon weighing their options would be better served monetarily by performing the operation that took the least amount of their time, thus allowing them freedom to see more new patients in their office. Most patients sent to a surgeon regarding possible surgery would qualify for an upper level consult (CPT 99244). The average payment by Medicare for CPT 99244 pays roughly $160. Thus, taking the average difference in physician time consumed between mastectomy versus segmental mastectomy and sentinel lymph node dissection, the surgeon would be free to perform two or three more of these consults simply by doing the segmental resection rather than the more time and resource-consuming mastectomy.¹⁵

Of course, the vast majority of surgeons will ultimately choose the operation that is best for the patient, regardless of the potential payment – taking into account all of the factors, including tumor size, location, morbidity, cure rate, operative technique, etc. This technique has always resulted in the best possible outcome, both for the patient as well as the surgeon. The authors would be well advised to follow those dictums which we have come to trust and rely upon – appropriate payment will surely follow quality care.

Received for publication July 30, 2004. Accepted for publication August 23, 2004.

REFERENCES

1. Lucci A, Shoher, A, Sherman, MO, et al. Assessment of the Current Medicare Reimbursement system for Breast Cancer Operations. J Clin Oncol 2004; 11: 1037–1044.
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3. Health Care Financing Administration: Model Fee Schedule for Physicians’ Services. Notice. Federal Register 1990; 55: 36178.[Medline]
4. Health Care Financing Administration: Fee Schedule for Physicians’ Services. Proposed Rule. Federal Register 1991; 56: 25792.
5. Health Care Financing Administration: Medicare Program; Fee Schedule for Physicians’ Services. Final Rule. Federal Register 1991; 56: 59502.[Medline]
6. Health Care Financing Administration: Medicare Program; Fee Schedule for Physicians’ Services for Calendar Year 1993. Final Rule. Federal Register 1992; 57: 55914.[Medline]
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8. Mabry CD, On the Cutting Edge of Reimbursement Strategies: The American College of Surgeons Develops New Techniques. Bull Am College Surg 2000; 85: 13–21.
9. Health Care Financing Administration: Medicare Program; Five-Year Review of Work Relative Value Units Under the Physician Fee Schedule. Notice. Federal Register Vol. 61: p. 19991. May 3, 1996.
10. Health Care Financing Administration: Medicare Program; Revisions to Payment Policies and Five-Year Review of and Adjustments to the Relative Value Units Under the Physician Fee Schedule for Calendar Year 1997. Final Rule with Comment Period. Federal Register 1996; 61: 59717.[Medline]
11. McCall NT, JCromwell, MGriggs, et al.: Five Year Review of Work Relative Value Units. Final Report, HCFA Prime Contract No. 500-97-0443, Task Order No. 2004, June 14, 1999.
12. Health Care Financing Administration: Medicare Program; Five-Year Review of Work Relative Value Units Under the Physician Fee Schedule. Notice. Federal Register 2001; 66: 31027.
13. Health Care Financing Administration: Medicare Program; Revisions to Payment Policies and Five-Year Review of and Adjustments to the Relative Value Units Under the Physician Fee Schedule for Calendar Year 2002. Final Rule. Federal Register 2001; 66: 55245.[Medline]
14. Mabry, C.D., The Five-Year Review, E&M services, and ACS leadership. Bull Am College Surg 1998; 83: 41–45.
15. Mabry CD, Trauma Services: Coding for optimal practice management. Bull Am College Surg 2003; 88: 13–24).

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