Payment for Services Rendered

Updating Medicare's Valuation of Procedures

Published in: The New England Journal of Medicine, Vol. 382, No. 4 (January 2020), pages 303-306. doi: 10.1056/NEJMp1908706

Posted on RAND.org on January 24, 2020

by Andrew W. Mulcahy, Katie Merrell, Ateev Mehrotra

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For most surgical procedures, Medicare and many other insurers give physicians a single bundled payment that covers both the procedure itself and related postoperative care during "global periods" encompassing the 10 or 90 days after the procedure. Postoperative visits account for roughly 25% of Medicare payments for procedures with bundled postoperative care—which totaled $9.9 billion in 2017. In 2015, the Centers for Medicare and Medicaid Services (CMS) proposed removing postoperative visits from bundled payments for procedures, in response to chart reviews by auditors that suggested that fewer postoperative visits were provided than the agency had assumed when setting Medicare payment rates. This finding may be driven in part by postoperative care being shifted to hospitalists and intensivists who bill separately from the bundled payment.

After lobbying by the surgical community, Congress, in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), explicitly prohibited CMS from moving forward with this plan. Instead, Congress required CMS to collect more data on the number and level of postoperative visits provided and to use these and other data to improve the accuracy of the valuation of procedures. The data have been collected, and armed with this new information, CMS must now decide how to move forward.

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