CMS Reimbursement Policies Resulted in Overuse of Office-Based Cystoscopic Procedures

After the Centers for Medicare & Medicaid Services (CMS) significantly increased physician fees for office-based minor cystoscopic procedures in 2005, there was a spike in this type of procedure. In addition, there was the unintended consequence of a 76% increase in redundant minor cystoscopic procedures, defined as >1 procedure per patient in a single quarter or consecutive quarters, according to a new analysis (O’Neil B, et al. J Natl Cancer Inst. 2015;108:djv331).

Excluding Surgical Procedures

The 2005 policy change was designed to reduce costs by moving bladder cancer–related procedures from hospitals and ambulatory surgery centers to physicians’ offices. However, there were not any concomitant shared-risk agreements, which led to the jump in spending, according to lead investigator Brock O’Neil, MD, Instructor in Urologic Surgery, Vanderbilt University Medical Center, Nashville, and colleagues. The researchers also noted that few payment models involve shared risk on the part of specialty physicians.

“The exclusion of surgical subspecialists from playing a meaningful role in these models is not specific to urology. Currently, minimal effort and discussion has taken place about what role subspecialists should play in these payment models, although this is beginning to change with bundled payments for specialty care and, more specifically, in joint replacement,” Dr O’Neil told Urology Practice Management.

He and his team sampled 5% of the fee-for-service Medicare Part A and Part B beneficiaries aged ≥66 years between 2001 and 2013. The analysis focused on 19,666 patients who underwent a minor cystoscopic procedure in an office-based or facility-based setting. The researchers did not include cystourethroscopy (procedure code 52000). The team used another 16,881 patients who underwent transurethral resection of bladder cancer in any setting as a comparison group.

Overall, a 644% increase was seen in office-based minor cystoscopic procedures immediately between the change to the Medicare fee schedule and the third quarter of 2007. That percentage subsequently declined after CMS revised its minor cystoscopic procedure payment downward, but it remained at 316% above baseline.

There were no changes in the rates of facility-based minor cystoscopic procedures or transurethral resection of bladder cancer during those periods; however, there was a significant 17% drop in diagnostic yield after the new policy went into effect.

Furthermore, the rate of redundant procedures among patients having initial minor cystoscopic procedures increased 76% after the reimbursement change, but there was no change in the rates of redundant procedures among patients undergoing initial transurethral resection of bladder cancer.

Unbalanced Financial Incentives

The investigators concluded that the results show an unbalanced effect of financial incentives, and that shared-savings or bundled payments may result in urologists performing the “right” procedure in the “right” setting.

“While there will always be resistance to change, it is my feeling that subspecialty and cancer care will continue to move toward alternative payment models, and it would benefit providers to be involved in the discussion about how to best align financial incentives,” commented Dr O’Neil. “Failure to do so will undoubtedly result in decisions being made for us as opposed to with us.”

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