Trends of Medicare Reimbursement Rates for Common Plastic Surgery Procedures

Abstract

stablished in 1966 under the Social Security Administration, Medicare is the primary health insurance for many Americans older than 65 years. 1 In 2018, Medicare represented more than 61.5 million individuals, and its budget was approximately $750 billion. 2 Medicare reimburses physicians based on a national fee schedule. 1 To establish this fee schedule, each medical procedure or service is represented by a CPT code and linked to an International Classification of Diseases, Tenth Revision, diagnosis. This represents the relative resources required to provide a particular service and forms the basis for physician and hospital reimbursement. 3 These relative value units are updated annually by the Centers for Medicare and Medicaid Services and effectively set the standard by which hospitals and/or physicians are reimbursed. Relative value units consider expenses related to physician work, practice expenses, and malpractice insurance. The final fee schedule for each procedure/service is then determined by applying the conversion factor to the relative value units. The conversion factor is a number selected by Centers for Medicare and Medicaid Services every year based on complex formulas that take into consideration the Medicare charges the year prior, the number of Medicare enrollees, the overall status of the U.S. economy, and any expected regulations that may affect Medicare services. The goal of the conversion factor is to limit potential increases in the Medicare budget higher than 20 percent from the last year's budget. 4 Growth in the aging population, steadily rising health care costs, and increased demand for health care services combined with fluctuations in the national political and financial landscape lead to financial unpredictability in the health

Ambulatory Surgery Centers Significantly Decrease Total Health Care Expenditures in Primary Anterior Cruciate Ligament Reconstruction

“…Numerous investigations demonstrated that real surgeon reimbursement has been declining over time. 6,9,10,14,18,22,27,35 LaPrade et al 14 found that surgeon reimbursement for outpatient arthroscopic meniscectomy decreased 15.5% from 2005 to 2014, while the current study demonstrated a 1.2% decline per year in surgeon reimbursement. Taken together, these findings suggest that cost-optimization strategies may be more efficacious when they are not provider-focused.…”

“…3 The reason for the transition from HMO to PPO plans is unclear; however, PPO plans may lead to higher patient satisfaction or perceived quality of care, and thus, more patients are willing to shoulder a higher economic burden to improve their access to health care providers of their choosing, but the literature is mixed on the quality of care between insurance plan types. 35 It is known that PPO plans offer more flexibility and convenience to the patient than HMO plans. 7 Patients with PPO plans can see providers both in-network and out-of-network without a referral from their primary care physicians.…”

“…3 The reason for the transition from HMO to PPO plans is unclear; however, PPO plans may lead to higher patient satisfaction or perceived quality of care, and thus, more patients are willing to shoulder a higher economic burden to improve their access to health care providers of their choosing, but the literature is mixed on the quality of care between insurance plan types. 35…”

Discussion: Trends of Medicare Reimbursement Rates for Common Plastic Surgery Procedures

“…I also must stress my appreciation for the reviewers' recommendation and editor's decision to include this submission in Plastic and Reconstructive Surgery. [1][2][3][4][5] The authors assessed the Physician Fee Schedule of the Centers for Medicare and Medicaid Services website, evaluating rates of work-, facility-, or malpractice-related relative value units and total monetary units, and calculated relative differences for 26 common plastic surgery procedures between 2010 to 2020, calculating relative differences and comparing the observed changes over that period with the rate of inflation. Their analysis led to the conclusion that the average relative difference over that 10-year period was a decrease of 14.31 percent, with a 1.55 percent decrease in relative value units.…”

A Comparative Analysis of the Common Injections Performed by Plastic Surgeons: 2012 and 2019

“…The data reported in this study are inconsistent with several previous evaluations of monetary trends in plastic surgery. 11,[17][18][19] The current landscape of literature suggests that adjusted Medicare reimbursement is downtrending for various reconstructive procedures, with changes not keeping pace with the rate of inflation. These prior studies coincide with general findings that Medicare payment rates are lagging far behind general inflation and physician practice expenses.…”