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 on January 24, 2020

by Andrew W. Mulcahy, Katie Merrell, Ateev Mehrotra

Read More

Access further information on this document at The New England Journal of Medicine

This article was published outside of RAND. The full text of the article can be found at the link above.

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.

Research conducted by

This report is part of the RAND Corporation External publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.