A new Medicare rule that will eliminate global surgical payments in two phases beginning in 2017 will be “an administrative burden for surgeons” and “a nightmare to track,” says the American College of Surgeons.
A new Medicare rule that unbundles global surgeons’ fees for thousands of procedures not only bucks a national trend toward episode-based pay, it will confuse millions of beneficiaries who will receive a dozen or more bills instead of one, each requiring a 20% co-payment.
That’s the concern of the American College of Surgeons, whose medical director, Frank Opelka, MD, says the policy, announced last month, will be “an administrative burden for surgeons…a nightmare to track,” and ultimately, “penny-wise and pound-foolish.” He emphasizes that a subset of sicker patients will end up paying more under the new rule because they require more services.
“I’m equally concerned about patients who may not get their post-surgical checkups,” he says. “They may have a problem, a hernia, something we need to address, and it’s going to be missed because people were trying to save money.”
Vinita Ollapally, JD, the ACS’s regulatory affairs manager, estimates the new policy will affect some 25 million procedures a year based on statistics for 2013.
The CMS final rule, released with the 2015 Physician Fee Schedule on Oct. 31, eliminates 10-day global surgical payments as of Jan. 1, 2017 and 90-day global surgical payments on Jan. 1, 2018.
Starting on those dates, doctors will send claims and bills to Medicare and their patients for each service delivered before, during, and after surgery, rather than bundled claims or bills based on the current global rate.
The agency says this change is in part a response to a 2012 Office of Inspector General reportthat revealed doctors were providing fewer services than what the global payments were covering.
After looking at actual patient medical records for 300 types of musculoskeletal surgeries performed in 2007, the OIG wrote: “Using our sample results, we estimated that Medicare paid a net $49 million for E&M (evaluation and management) services physicians provided to beneficiaries during the global surgery periods.”
For example, in one category of 76 sampled surgeries, the number of E&M services included in the fee was 714, but the actual number provided was 518. And instead of three post-operative patient visits, physicians may have provided only two.
Additionally, CMS said, the change will “avoid potentially duplicative or unwarranted payments when a beneficiary receives post-operative care from a different practitioner during the global period.”
MedPAC on Board with New Rule
The Medicare Payment Advisory Commission said in a letter to CMS Aug. 28, in response to the proposed rule in September, that it supported the elimination of the global surgical fees because payments would more accurately reflect the actual services provided. “Paying separately for post-operative visits would address many of these problems.”
“Medicare would no longer make duplicative payments when a beneficiary receives post-operative care from a different physician than the one who provided the procedure without a transfer agreement between the two physicians,” the MedPAC letter continued.
CMS says that one remedy to the problem would be to revalue the global fee, but it “[does] not have objective data upon which to assess whether the RVUs (relative value units) for global period surgical services reflect the typical number or level of E/M services that are furnished.” The agency says it will re-evaluate the issue as the new policy rolls out.
But Opelka and the ACS maintain that in the interim harm could come to patients who choose to avoid care, and a lot of inefficiency. Most important, he says, is that while it may result in lower payments to some surgeons and lower costs for many patients who needed fewer services, patients with complex comorbidities, whose time in the hospital may be measured in weeks rather than days, will see “a shocking increase” in their bills.
He adds that for these patients, the cost will “overwhelm the total savings, and Medicare and the patients collectively could end up paying significantly more.”
“I’m not sure CMS has done the kind of critical analysis to fully appreciate the complexity of this issue,” Opelka says. Nor, he says, has the agency adequately examined the RVUs, which are made up of physician work, practice expense, and malpractice expense, that make up various surgery codes that were based on patients being less sick than they are today. There’s a lot more work in adjusting medications, checking wounds, making sure recovery is on track and that pain is managed.
With global payments, “the whole focus was on the recovery, and what was happening to improve the patient’s outcome. Now, you’ve added a layer of economic incentives — or disincentives depending on your perspective—on top of the clinical outcome.”
In its comment letter to CMS Sept. 2, ACS’s executive director David Hoyt, MD, said the OIG report “lacks credibility due to the fact that it is based on limited data…a review of 300 claims for almost 300 procedure codes, which results in a small subset of claims reviewed per procedure.”
Under the new rule, Medicare beneficiaries will receive multiple bills where there currently, under global physician payments is only one. While CMS says the policy change will affect 3,000 surgical global codes, the ACS says the number is more like 4,200.
Chad Rubin, MD, also of the ACS, said that for a typical colectomy, a Medicare patient will receive 11 separate bills for physician services under Medicare Part B, on top of the bills for anesthesiology, and under Part A for the hospital stay.
Opelka says that for the practicing surgeon, “this is a substantive business change. We’re trying to figure out what our response will be, and how we should react….We’re making this more complicated, and that to me is bothersome.”
Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.