Medicare Pay Drops Sharply for General Surgical Procedures

Originally published by our sister publication General Surgery News

BOSTON—A new study has confirmed a suspicion that many surgeons have had for several years: Medicare reimbursement in general surgery continues to slide and shows marked geographic variation.

The analysis found that between 2012 and 2022, the top 27 grossing procedures in general surgery showed an average reimbursement reduction of more than 11%, with the biggest declines occurring in Illinois, Michigan and Mississippi.

“Over the last five years, a series of studies related to Medicare reimbursement have been performed, with each focusing on trends among individual specialties,” said Colton Shepherd, BS, a medical student at Texas Tech University Health Sciences Center, in Lubbock. “In this case, we chose general surgery with an eye toward assessing how reimbursement has changed in various different regions across the country.”

The researchers queried a data set of the Centers for Medicare & Medicaid Services to find the top 27 grossing general surgery Current Procedural Terminology (CPT) codes. Next, they analyzed the Physician Fee Schedule for geographic changes in reimbursement. CPT codes were weighted according to revenue, and inflation-adjusted annual and total percentage changes were identified for each state and territory in the United States.

In a presentation at the 2023 Clinical Congress of the American College of Surgeons, Mr. Shepherd reported that the average decrease in reimbursement for all states and territories was 11.3%, while the median decrease was 11.6%. The states that experienced the largest declines in average reimbursement were Illinois (16.6%), Michigan (14.1%) and Mississippi (13.8%).

Conversely, Puerto Rico (3.0%), Washington (7.8%) and Oregon (8.7%) showed the smallest decreases in that period. But every state and territory experienced a total reimbursement reduction.

In terms of procedure changes, the biggest reimbursement decreases were seen in endovenous radiofrequency ablation (42.1%), laparoscopic large bowel polyp removal (37.6%) and laparoscopic cholecystectomy (28.9%) between 2012 and 2022. Other commonly performed procedures were also affected, as reimbursement for laparoscopic hernia repair and debridement of devitalized tissue fell by 18.1% and 1.9%, respectively.

“These findings were not particularly surprising for us, and essentially confirmed that while the reimbursement trend over the 11-year period was different for each state, they all show a general decline,” Mr. Shepherd told General Surgery News.

As the researchers discussed, the findings have significant implications for surgeons in terms of reimbursement from Medicare and from other payors.

“Medicare is the largest insurance provider in the United States, so physicians generate quite a bit of revenue based on procedures they’re doing for patients who are insured by Medicare,” Mr. Shepherd explained. “But there have also been studies that have shown that the private-sector insurance companies tend to follow the reimbursement trends of Medicare. So, the concerning thing is if Medicare’s reimbursement rates are declining, then it’s likely that some of the private-sector insurance companies will also reduce reimbursement, which really impacts physicians.”

This phenomenon, he added, may ultimately have a chilling effect on patient care.

“We see that kind of trend already, where some physicians will limit the number of Medicaid patients they see just because the reimbursement is so low,” Mr. Shepherd said. “Hopefully we can use these data to advocate for changing reimbursement rates and make legislators more aware of the trend.”