Introduction: The Medicare Physician Fee Schedule (PFS) is the basis for physician reimbursement by public and private payers. The PFS values physician services according to the estimated time and intensity required to perform them; intensity reflects the summation of technical skill, cognitive load, and risk-related stress. The fee schedule uses relative value units (RVUs) as a metric that permits comparison across procedures. Recent debate has focused on whether the methods by which the Centers for Medicare & Medicaid Services (CMS) estimate procedural intensity are valid. We therefore sought to investigate current CMS estimates of intensity (RVUs/min) for surgical procedures performed by pediatric otolaryngologists.
Methods: We performed a retrospective, cross-sectional analysis of fiscal year 2021 PFS valuations for pediatric otolaryngology key indicator procedures specified by the Accreditation Council for Graduate Medical Education. We additionally examined general otolaryngology procedures, including adenotonsillectomy and tympanostomy tube insertion. We utilized the 2021 Medicare PFS conversion factor of $34.89/RVU to convert intensity (wRVUs/min) to a compensation rate ($/min). Primary outcomes were: (1) total compensation rate and (2) intraservice (i.e., incision-to-closure) compensation rate for each studied procedure.
Results: Our study sample included 167 unique procedures. The mean (standard deviation) total compensation rate for all included procedures was $1.35/min ($0.29/min) and the mean intraservice rate was $1.71/min ($0.89/min). Intraservice compensation rates ranged from $-1.50/min (drainage of throat abscess) to $4.75/min (pediatric tracheostomy).
Discussion: Total and intraservice compensation rates under the Medicare PFS vary widely for surgical procedures performed by pediatric otolaryngologists. Further investigation is necessary to examine the validity of assumptions underlying these procedural intensity valuations.
Level of evidence: NA Laryngoscope, 2022.
Keywords: fee schedule; payment rates; pediatric otolaryngology; price variation; transparency; valuation.
© 2022 The Authors. The Laryngoscope published by Wiley Periodicals LLC on behalf of The American Laryngological, Rhinological and Otological Society, Inc.