Medicare payment for many health care procedures covers not just the procedure itself but also most post-operative care during a fixed "global period." This report describes how CMS could use the new claims-based data on the number of post-operative visits to adjust valuation for procedures with 10- and 90-day global periods. These results may inform further policy development around revaluation for global procedures.

Using Claims-Based Estimates of Post-Operative Visits to Revalue Procedures with 10- and 90-Day Global Periods

Andrew W. Mulcahy, Harry H. Liu, Teague Ruder, Susan L. Lovejoy, Katie Merrell, Ateev Mehrotra

ResearchPublished Feb 5, 2021

This report was initially published in 2019; this update was published in 2021 and includes clarification on RAND's definition of clean procedures.

Medicare payment for many health care procedures covers not just the procedure itself but also most post-operative care over a fixed period of time (the "global period"). The Centers for Medicare & Medicaid Services (CMS) sets payment rates assuming that a certain number and type of post-operative visits specific to each procedure typically occur.

This report describes how CMS might use new claims-based data on the number of post-operative visits to adjust valuation for procedures with 10- and 90-day global periods. There are links between the number of bundled post-operative visits and the components of valuation addressed in this report: work, practice expense (PE), and malpractice relative value units (RVUs). There is some ambiguity regarding how a reduction in post-operative visits translates into changes in work RVUs. In contrast, a reduction in post-operative visits has clear implications on physician time and direct PE. Changes in physician work, physician time, and direct PE will in turn affect the allocation of pools of PE and malpractice RVUs to individual services.

The idiosyncrasies of the resource-based relative value scale system used to determine payment for Medicare services result in some ambiguity about how procedures should be revalued to reflect reductions in post-operative visits. These results may inform further policy development around revaluation for global procedures.

Key Findings

  • Depending on which statistic describing the number of observed visits we used (e.g., mean, median), the resulting updated work RVUs were between 18 percent and 30 percent lower for procedures with 90-day global periods, and between 38 percent and 40 percent lower for procedures with 10-day global periods compared with current work RVU levels.
  • The net reduction in work RVUs was 2.7 percent across all Physician Fee Schedule services or $2.6 billion at the 2019 conversion factor.
  • Adjusting direct practice expense inputs alone resulted in relatively modest reductions in PE and total RVUs for most proceduralist specialties and increases for other specialties such as cardiology.
  • Revaluation reduced total RVUs by from 5.1 percent (vascular surgery) to 20.6 percent (cardiac surgery) among proceduralist specialties and resulted in small increases for some other specialties (e.g., cardiology, neurology, and the specialties contributing to our primary care category).
  • These changes in valuation resulted in slightly moderated reductions in payments for surgical specialties due to a higher conversion factor.
  • Payments to primary care practitioners and some other specialties that perform procedures rarely increased — by roughly 3 percent.

Recommendations

  • Procedures can be revalued to reflect the actual number of post-operative visits provided using the "reverse building block" approach.
  • Different approaches to measuring the "typical" number of visits, including the median, mean, and mode of observed visits, should be considered.
  • The implications of revaluation should be examined separately for work RVUs, PE RVUs after reducing practice expense inputs only, and in terms of total RVUs.
  • It is important to summarize the implications of revaluation of surgical procedures for surgical specialties as well as primary care and other nonsurgical specialties due to the budget neutrality of Medicare payments for physician services.

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Citation

RAND Style Manual
Mulcahy, Andrew W., Harry H. Liu, Teague Ruder, Susan L. Lovejoy, Katie Merrell, and Ateev Mehrotra, Using Claims-Based Estimates of Post-Operative Visits to Revalue Procedures with 10- and 90-Day Global Periods, RAND Corporation, RR-3035-1-CMS, 2021. As of September 10, 2024: https://www.rand.org/pubs/research_reports/RR3035-1.html
Chicago Manual of Style
Mulcahy, Andrew W., Harry H. Liu, Teague Ruder, Susan L. Lovejoy, Katie Merrell, and Ateev Mehrotra, Using Claims-Based Estimates of Post-Operative Visits to Revalue Procedures with 10- and 90-Day Global Periods. Santa Monica, CA: RAND Corporation, 2021. https://www.rand.org/pubs/research_reports/RR3035-1.html.
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This research was funded by Medicare & Medicaid Services (CMS) and conducted by the Payment, Cost, and Coverage Program within RAND Health Care.

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