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Medicare's bundled payments overcompensate for post-surgical care, analysis says

Medicare might be overpaying surgeons because of built-in reimbursements for postoperative care, according to an analysis by RAND Corp., a nonprofit research organization.

Andrew Mulcahy, a senior policy researcher at RAND, was the perspective's lead author. He worked with Katie Merrell of Actuarial Research Corp., as well as Ateev Mehrotra, MD, of RAND and Boston-based Harvard Medical School. Their perspective was published in the New England Journal of Medicine.

Five takeaways:

1. Surgeons only provide a small share of the postoperative care that Medicare payments cover, the researchers said, citing RAND research and sample data that Medicare began collecting in 2017.

The RAND research found that surgeons provided postoperative care after just 4 percent of minor procedures studied, despite receiving Medicare payments for postoperative visits after nearly all minor surgical procedures. About 39 percent of postoperative visits reimbursed by Medicare after major surgical procedures were actually provided, research suggested.

2. Adjusting Medicare payments to more accurately reflect the postoperative care provided by surgeons could have reduced reimbursement for those procedures by about $2.6 billion, or 28 percent, in 2018, authors estimated. Models indicated that lowering payments for surgeon-provided postoperative care would generally increase payments to primary care providers.

3. Medicare and many private payers offer bundled payments that cover surgical procedures and related postoperative care for episodes of up to 90 days. Medicare has allotted about 25 percent of those bundled payments for postoperative care, based on estimates from industry group surveys.

4. Researchers concluded that CMS should examine billing claims, quality-improvement databases and EHRs to more objectively measure how much postoperative care surgeons provide. They asked the agency to use this kind of information — rather than the industry estimates used now — to set bundled reimbursement rates.

5. In 2015, CMS proposed eliminating postoperative visits from bundled payments because chart reviews indicated surgeons provided less postoperative care than the agency had assumed when setting rates. However, Congress passed legislation blocking any payment changes without further research about the postoperative care surgeons do provide.

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