Inflation-Adjusted Trends in Medicare Reimbursement for Common Dermatologic Procedures, 2007-2021

Analysis of 10-year trends in Medicare Physician Fee Schedule payments in surgery

BACKGROUND

Medicare expenditures have steadily increased over the decades, and yet Medicare Physician Fee Schedule payments for individual services have declined. We examine trends in Medicare Physician Fee Schedule payments for office visits, inpatient visits, and surgical procedures.

METHODS

The Medicare Physician Fee Schedule Look-Up Tool was queried for payment data for office visits, inpatient visits, and surgical procedures between 2013 and 2023. All data were adjusted for inflation using the Consumer Price Index. Trends in payments were calculated for 5 common procedures in each surgical specialty. Trends in aggregate national health expenditures were compared to Medicare Physician Fee Schedule payments for physician services from 2013 to 2021.

RESULTS

The Consumer Price Index increased by 29.3% from 2013 to 2023. Inflation-adjusted per-visit Medicare Physician Fee Schedule payments decreased by 12.2% for outpatient office visits, 19.1% for inpatient visits, and 22.8% for surgical procedures from 2013 to 2023. This varied by surgical specialty: vascular (-25.8%), endocrine (-22.0%), general surgery (-27.0%), thoracic (-19.2%), surgical oncology (-22.1%), breast (-22.4%), urology (-2.2%), neurosurgery (-22.8%), obstetrics/gynecology (-19.9%), and orthopedics (-24.7%). Adjusted for inflation, national health expenditures increased by 33.9% for physician services from 2013 to 2021. In comparison, Medicare Physician Fee Schedule payments over the same time period 2013 to 2021 increased by 1.3% for outpatient office visits but decreased by 10.6% for inpatient visits and 9.8% for surgical procedures.

CONCLUSION

Controlling rising national health expenditures is important and necessary, but 10 years of declining Medicare Physician Fee Schedule payments on a per-procedure basis in surgery would suggest that this strategy alone may not achieve those goals and could ultimately threaten access to quality surgical care. Surgeons must advocate for permanent payment reforms.

A Medicare Physician Fee Schedule Analysis of Reimbursement Trends in Laryngology from 2000 to 2021

OBJECTIVE

The purpose of this study is to characterize Medicare reimbursement trends for laryngology procedures over the last two decades.

METHODS

This analysis used CMS' Physician Fee Schedule (PFS) Look-Up Tool to determine the reimbursement rate of 48 common laryngology procedures, which were divided into four groups based on their practice setting and clinical use: office-based, airway, voice disorders, and dysphagia. The PFS reports the physician service reimbursement for "facilities" and global reimbursement for "non-facilities". The annual reimbursement rate for each procedure was averaged across all localities and adjusted for inflation. The compound annual growth rate (CAGR) of each procedure's reimbursement was determined, and a weighted average of the CAGR for each group of procedures was calculated using each procedure's 2020 Medicare Part B utilization.

RESULTS

Reimbursement for laryngology procedure (CPT) codes has declined over the last two decades. In facilities, the weighted average CAGR for office-based procedures was -2.0%, for airway procedures was -2.2%, for voice disorders procedures was -1.4%, and for dysphagia procedures was -1.7%. In non-facilities, the weighted average CAGR for office-based procedures was -0.9%. The procedures in the other procedure groups did not have a corresponding non-facility reimbursement rate.

CONCLUSION

Like other otolaryngology subspecialties, inflation-adjusted reimbursements for common laryngology procedures have decreased substantially over the past two decades. Because of the large number of physician participants and patient enrollees in the Medicare programs, increased awareness and further research into the implications of these trends on patient care is necessary to ensure quality in the delivery of laryngology care.

LEVEL OF EVIDENCE

NA Laryngoscope, 134:247-256, 2024.

Retrospective analysis shows the cost of Mohs surgery decreases when adjusted for medical inflation

BACKGROUND

Mohs surgery (MS) is the gold standard for treating nonmelanoma skin cancers in cosmetically sensitive areas.

OBJECTIVE

To investigate MS costs over time when adjusting for medical inflation while considering the perspective of patients, payers, and health care systems.

METHODS

A retrospective claim analysis using data from the International Business Machines MarketScan Commercial Claims and Encounters Database from 2007 through 2019 was performed. A query of the database for any instance of a MS-specific Current Procedural Terminology (CPT) code in adults (17311, 17312, 17313, 17314, and 17315) was conducted. Aggregate data per claim regarding coinsurance, total cost, deductible, copay, and insurance payout were provided for each CPT code annually.

RESULTS

The total adjusted cost per claim decreased significantly (P < .001) for 4 of the 5 MS-specific CPT codes between 2007 and 2019: 17311 (-25%), 17312 (-15%), 17313 (-25%), and 17314 (-18%). The patient's adjusted out-of-pocket expense increased significantly (P < .0001) for 4 of the 5 MS-specific CPT codes: 17311 (33%), 17312 (45%), 17313 (34%), and 17314 (43%).

CONCLUSION

Among the 4 most used MS-specific CPT codes (17311, 17312, 17313, and 17314), the total cost per claim decreased and the patient's out-of-pocket expense increased from 2007 to 2019.

Reimbursement Trends in Pediatric Otolaryngology From 2000 to 2020: A CMS Physician Fee Schedule Analysis

OBJECTIVE

The aim of this study was to evaluate the financial trends in Medicare reimbursement rates for the most billed procedures at a single institution from 2000 to 2020 within pediatric otolaryngology.

STUDY DESIGN

Retrospective data analysis.

SETTING

United States.

METHODS

The most billed surgical and in-office procedures in pediatric otolaryngology at our institution were identified in the Physician Fee Schedule Look-up Tool from the Centers for Medicare and Medicaid Services to extract reimbursement data for each CPT code (Current Procedural Terminology). Monetary data were adjusted for inflation to 2020 US dollars per the changes to the consumer price index. Mean annual and total percentage changes in reimbursement were calculated by the adjusted values for all included procedures (N = 25).

RESULTS

From 2000 to 2020, without adjusting for inflation, reimbursement for the most billed procedures increased by 10.9%, while the allocated relative value unit per procedure increased by 15.4%. However, when adjusted for inflation, reimbursement for these procedures decreased by 27.5% over the study period.

CONCLUSIONS

The study findings identify a downward trend in reimbursement for the most billed procedures in pediatric otolaryngology at our institution. Given the low predominance of pediatric otolaryngology codes within Medicare reimbursement, these codes are rarely reviewed for accurate revaluation. It is imperative that our professional society remain active and engaged within this process to ensure quality delivery of care to our patients.

Inflation-Adjusted Medicare Reimbursement for Hip Arthroscopy Fell by 21.1% on Average Between 2011 and 2022

Purpose

To examine Medicare reimbursement for hip arthroscopy from 2011 to 2022.

Methods

The seven most common procedures performed with hip arthroscopy by a single surgeon were gathered. The Physician Fee Schedule Look-Up Tool was utilized to access financial data of the associated Current Procedural Terminology (CPT) codes. The reimbursement data for each CPT were gathered from the Physician Fee Schedule Look-Up Tool. With the consumer price index database and inflation calculator, reimbursement values were adjusted for inflation to 2022 U.S. dollars.

Results

Following an adjustment for inflation, it was found that reimbursement rate for hip arthroscopy procedures on average was 21.1% lower between 2011 and 2022. The average reimbursement per CPT code for the included codes was $899.21 in 2022 compared to inflation adjusted $1,141.45 in 2011, a difference of $242.24.

Conclusions

From 2011 to 2022, the average inflation-adjusted Medicare reimbursement has steadily declined for the most common hip arthroscopy procedures. As Medicare is one of the largest insurance payers, these results have substantial financial and clinical implications for orthopaedic surgeons, policy makers, and patients.

Level of Evidence

Level IV, economic analysis.

Trends in Debt Valuations of Private Equity-Backed Dermatology Groups Before and During the COVID-19 Pandemic

Importance

Private equity (PE) firms have invested in and consolidated dermatology practices. Private equity firms typically operate by conducting leveraged buyouts, which occur when target companies are acquired with capital from PE firms and a combination of debt, which may include debt instruments held in business development corporations (BDCs).

Objective

To investigate the valuations of dermatology PE-backed group (DPEG) debt instruments in BDCs' portfolios both before and during the COVID-19 pandemic.

Design, Setting, and Participants

This cross-sectional study, conducted from August 1, 2016, to August 31, 2021, examined public financial statements filed by BDCs lending to DPEGs. The public filings of BDCs were searched from inception of the DPEG's debt instrument in a BDC's portfolio, and the amortized cost and fair value of each debt instrument were tabulated.

Main Outcomes and Measures

The premium or discount at which each debt instrument was valued at a given time was calculated by dividing the difference between the fair value and the amortized cost by the amortized cost. Different testing methods were conducted for normal or nonnormal data to test differences in debt valuations across all DPEGs between 2 consecutive or nonconsecutive quarters.

Results

The search of the public filings found 10 BDCs containing data on 9 unique DPEGs. Overall, there were 15 trackable DPEG debt instruments because multiple BDCs can hold debt instruments for a given DPEG. Data were available from August 2016 through August 2021. During the study time frame, the amortized cost of the loans for an individual DPEG ranged from a low of $1.7 million to a high of $100 million. The valuation of debt instruments was stable for many DPEGs until some were discounted starting in May 2018, with a significant decrease from May 2019 to August 2019 (-1.4%; 95% CI, not applicable; P = .04), prior to the COVID-19 pandemic. Another significant decrease occurred during the pandemic from February to June 2020 (-9.0%; 95% CI, -13.6% to -4.4%; P = .002). US Dermatology Partners decreased to the lowest valuation (Golub BDC, -39.7%; TCG BDC Inc, -48.8%; TCG BDC II, -48.8%) of the DPEGs examined in November 2020 even after receiving a $10 million forgivable Small Business Administration Paycheck Protection Program loan in May 2020. After pharmaceutical companies announced effective COVID-19 vaccine candidates in November 2020, there was a modest and significant improvement in debt valuations (2.3%; 95% CI, 0.2%-0.4%; P = .03); however, they remained discounted. Only PhyNet Dermatology's debt instruments improved to a premium valuation by August 2021.

Conclusions and Relevance

Debt valuations of some DPEGs found in this cross-sectional study suggest a lower probability that their loans will be repaid in full. This could be a signal that some DPEGs are not performing well financially.