Medicare reimbursement changes for ambulatory surgery centers and remuneration to urological physician-owners

Abstract

Purpose: To decrease the cost of surgical care Medicare has introduced a new facility fee schedule for ambulatory surgical centers. This prospective payment system increases reimbursement for many urological procedures, while decreasing reimbursement for others. All stakeholders, including physicians, the Medicare program and hospitals, will be affected by these changes.

Materials and methods: Using the Agency for Healthcare Research and Quality State Ambulatory Surgery Databases we identified Medicare patients in Florida who underwent urological procedures in ambulatory surgical centers from 1998 to 2005. Three facility groupings were created, including urology dominant, multispecialty and other specialty dominant. The impact of reimbursement changes at the procedure and facility levels was assessed using 2005 data. Projections of ambulatory surgical center use and reimbursement in 2008 were then generated using all available data.

Results: In 2008 we project total payments by Medicare to increase by $4,233,080 (26%, range 22% to 32%) under the new reimbursement system compared to the old system. At the facility level reimbursement to multispecialty facilities should increase substantially (49%), while urology specialty facilities will receive less benefit (10% increase). Compared to multispecialty facilities, at urology specialty facilities a higher proportion of cases is performed for which reimbursement is set to decrease.

Conclusions: Under the new payment scheme for ambulatory surgical centers winners and losers emerge. Facilities with diversified procedure mixes will find increased revenue, while those with less diversification will find slower growth to their revenue streams. In contrast to the desire of the Medicare program to decrease surgical costs, the new program may increase the payments made for urological surgery.

Figure 1

Procedure mix by Type of ASC. Urology-dominant facilities performed a significantly higher percentage of cases where the facility fee declines in the new payment scheme (73%) compared to multi-specialty (37%) and other-specialty dominant (36%) ASC (chi-square p < 0.01 for between group comparisons to urologydominant ASCs).

Figure 2

ASC Utilization for the Urologic Procedures in Florida from 1998 to 2005, with Projection to 2008. The vertical line at year 2006 represents the start of the forecast, and the dashed lines represent the upper and lower confidence intervals for each forecasted rate. Overall utilization of ambulatory surgical procedures increased over the eight years of the study from 689 cases per 100,000 to 1027 cases per 100,000 (a 49% increase), with forecasted growth to 1041 procedures per 100,000 by 2008. We forecast a slight increase in the use of those procedures that will have higher reimbursement (from 434 to 476 cases per 100,000 population between years 2005 and 2008), and a small decline in use of procedures with lower reimbursement (from 593 to 565 cases per 100,000 population between years 2005 and 2008).