A 'nightmare' for surgeons? Medicare is ending global payments for surgeries

Surgeons worry patients will forgo necessary services to save money

The American College of Surgeons (ACS) is speaking out against a new Medicare rule that eliminates 10- and 90-day global payments for surgical procedures starting in 2017, saying doing so would confuse beneficiaries and create an "administrative burden for surgeons."

The change—which was outlined in the 2015 Physician Fee Schedule released on Oct. 31—unbundles global surgeon fees for thousands of procedures and requires physicians to bill separately for the day of the surgery (known as a zero-day global payment) and any encounters after that day, rather than bundled claims based on the current global rate. Specifically, CMS will eliminate 10-day global surgical payments beginning Jan. 1, 2017, and it will do the same for 90-day payments on Jan. 1, 2018.  

According to CMS, the policy was implemented in response to a 2012 report from the Office of Inspector General that showed physicians were providing fewer services than what the global payment was covering. For instance, in one category of 76 sampled surgeries, the bundled payment fee covered 714 evaluation and management services, but just 518 were provided.

In an August letter to CMS, the Medicare Payment Advisory Commission praised the rule, saying the policy would more accurately reflect the services being provided. The letter stated, "Medicare would no longer make duplicative payments when a beneficiary receives post-operative care from a different physician than the one who provided the procedure without a transfer agreement between the two physicians."

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Unbundling payments could harm patient care, ACS says

As a result of the rule change, surgeons warn that patients could receive a dozen or more bills, each requiring a 20% copayment. According to Vinitia Ollapally, ACS's regulatory affairs manager, the new policy will affect about 25 million procedures annually.

ACS Medical Director Frank Opelka calls the policy an "administrative burden" that will be "a nightmare to track." He says sicker patients could end up paying more under the new rule because they require more services. And he says patients with chronic conditions who frequently visit the hospital will see a "shocking increase" in their bills. He argues that the policy is "penny-wise and pound foolish."

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Opelka adds he is "equally concerned" about patients who might not attend post-surgical checkups because they are trying to save money under the policy. "They may have a problem, a hernia, something we need to address, and it's going to be missed because people were trying to save money," he says, adding, "I'm not sure CMS has done the kind of critical analysis to fully appreciate the complexity of this issue."

In addition, Opelka says he worries eliminating the bundled payments will lessen the focus on the patient's recovery and what is being done to improve patient outcomes (Clark, HealthLeaders Media, 11/12).

The Advisory Board's take

Lea Halim, Consultant

The elimination of global surgery codes seems like a big administrative and billing change for physician practices. However, our research suggests that—at least for larger physician groups, and especially those affiliated with hospitals—the impact may not be significant.

The services provided within a 10- or 90-day post-operative periods are often performed by different physicians. The use of global surgery codes make it harder to keep track of which physician performed which service. Medical groups need this information for evaluating physician performance and determining compensation.

As a result, some avoid billing the global codes whenever possible. When they do bill them, these groups engage in burdensome parallel record-keeping, and sometimes parallel billing, in order to make sure that services are accurately attributed. The fact that different payers, as well as Medicare, have different definitions of global periods and services included can create confusion and further discourage provider groups from using the global codes for any payer.

So for groups that invest in monitoring and accurately measuring provider performance, the elimination of these codes may primarily mean a relief from administrative burdens.

A broader perspective from analyst Krista Teske

From a broader policy perspective, eliminating global payments increases the volume of individual fee-for-service payments, which seems to be in a different spirit than other CMS initiatives.

For example, the new Chronic Care Management code aims to minimize emphasis on individual fee for service payments, thus facilitating greater care coordination across settings. This diversion away from more holistic payment bundles seems uncharacteristic of CMS latest initiatives, but it remains to be seen exactly how this ruling may impact patient care and provider collaboration following surgical interventions.

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