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Department of Surgery

Department of Surgery

NEWS | July 17, 2014

Medicare reimbursement for surgical procedures poorly reflects reality

(SACRAMENTO, Calif.)

The current system used to determine Medicare payments for surgeries — called relative value units, or RVUs — poorly correlates with the actual work involved in procedures, new research from UC Davis has found.

Robert Canter Robert Canter

The authors of the study, which will be published in the August issue of the Journal of Surgical Research, call for a more objective system for determining the value of work done by surgeons.

“RVUs are incredibly important to a hospital’s bottom line and for ranking the worth of physicians, but our study showed that they don’t reliably account for the complexity of surgical procedures,” said Robert Canter, senior author of the study and associate professor of surgery with UC Davis Health System. “We need a more data-driven system to accurately and realistically determine values.”

RVUs are assigned by Medicare to determine payments for physicians’ services. They are intended to reflect physician work (time, skill, training and intensity), along with practice expense (staff time, supplies and equipment). The approach has been criticized, according to Canter, because the process of assigning RVUs is highly subjective and predisposed to budgetary constraints and external influences.

The researchers set out to determine if RVUs for general surgical procedures correlate with indicators of surgical complexity, including operative time, duration of hospital stay, problems following surgery, morbidity and death rates. They used 2010 data for more than 14,000 patients in the American College of Surgeons National Surgical Quality Improvement Program database, which tracks pre-operative to 30-day post-operative quality measures and outcomes for procedures performed in hospitals throughout the country.

The team analyzed laparoscopic (minimally invasive) and open gastrointestinal surgeries, as well as hernia repairs, simple mastectomies and thyroidectomies. To avoid confounding the results with extraneous factors, the study only included cases during which a single procedure was performed and excluded patients with multiple medical problems.

Their analysis revealed wide variability between RVUs and indicators of surgical work. Overall, RVUs poorly correlated with hospital length of stay and operative time, and they only moderately correlated with morbidity and adverse events such as infection, shock, heart attack, coma or renal failure. RVUs were good predictors of operative time, length of hospital stay and adverse events, although only for more complex cases.

According to Canter, the discrepancies between RVUs and real-world indicators of surgical work are concerning because RVUs have become widespread measures of physician productivity and worth, often tallied and presented during evaluations and used as a basis for promotion and salary considerations. It is possible that the system promotes physicians gravitating toward performing less-complex, high-RVU procedures and shying away from difficult, low-RVU procedures. He suggests a more objective approach based on what actually happens in operating rooms at the patient level.

“RVUs for doctors are like a ball player’s batting average,” said Canter. “When the valuing system doesn’t reflect reality, it could lead to physician dissatisfaction and threaten optimum patient care.”

The study, titled “Relative Value Units Poorly Correlate with Measures of Surgical Effort and Complexity,” is available online at the journal’s website www.journalofsurgicalresearch.com and on ScienceDirect at http://www.sciencedirect.com/science/journal/00224804.

Other UC Davis authors were Richard Bold and Vijay Khatri. Authors Dhruvil Shah, Anthony Yang and Steve Martinez were all at UC Davis when the research was conducted.

Canter is funded by a UC Davis Paul Calabresi K12 Clinical Oncology Career Development Award.

UC Davis Health System improves lives by providing excellent patient care, conducting groundbreaking research, fostering innovative, interprofessional education and creating dynamic, productive community partnerships. It encompasses one of the country's best medical schools, a 619-bed acute-care teaching hospital, a 1,000-member physician practice group and the Betty Irene Moore School of Nursing. Together, they make UC Davis a hub of innovation that is transforming health for all. For information, visit www.healthsystem.ucdavis.edu.