Getting What We Pay For FREE TO VIEW

The advent of airway stenting and related interventional bronchoscopic procedures has undoubtedly improved the lives of our patients, particularly improving the palliative care of patients with advanced lung cancer.¹²³ In this issue of CHEST (see page 579), Ernst and colleagues⁴ review the indications for airway stenting, discuss variations in stent design and materials that bear on the clinical use of these devices, describe the procedural techniques used to place stents, and then review the payments Medicare makes to the interventional pulmonologist and facility for placing an airway stent. The improvement in care resulting from these interventions comes at a financial cost. In the absence of these relatively new advances, disease would simply progress according to its natural history. As is evident from the clinical management algorithms Ernst and colleagues present, these bronchoscopic interventions rarely replace other services; they are additive to the traditional care of patients with central airway obstruction. The net gain in quality and duration of survival achieved for the net increase in costs, the marginal cost-effectiveness, should inform discussion about the value these advances bring relative to other medical interventions. Unfortunately, the evidence necessary to establish the marginal cost-effectiveness of these interventions simply is not yet available.

Ernst and colleagues analyze the work, practice expense, and malpractice relative value units for the components of the interventional pulmonary procedures likely to be performed on a patient with central airway obstruction. Based on the Medicare payment methodology for converting relative value units to a monetary value and applying the Correct Coding Initiative (CCI) edits to determine which individual services are payable at 100%, which are subject to a concurrent procedure discount of 50%, and which are not payable as incidental or mutually exclusive to the primary procedure, the resulting payment for airway stenting is compared to the payment for Evaluation and Management (E&M) services that would require the same amount of time. In what is likely to be a surprise both to those whose practice is dominated by procedures and to those whose practice is dominated by cognitive E&M services, airway stenting procedures pay less per hour than E&M services. Before simply filing this outcome next to Revenge of the Nerds, it is worth reviewing the components of the Medicare payment system that produce this result and considering the health policy implications.

Put forth by Hsiao et al⁵ in the late 1980s as an alternative to the system of payments based on historical charges, and in an effort to more rationally assign monetary values to the broad range of services delivered by physicians, the Resource Based Relative Value Scale (RBRVS) was adopted by Congress in 1989 and implemented in the Medicare Fee Schedule in 1992. RBRVS establishes a value for every current procedural technology (CPT) code based on the following: (1) total work input performed by the physician for each service; (2) practice costs, including malpractice premiums; and (3) the cost of specialty training. This value is then converted to a monetary value by applying a standardized conversion factor. The CCI was established by Medicare in 1996 to promote national correct coding methodologies and to control improper coding leading to inappropriate payments.⁶ The CCI is based on coding conventions defined in the American Medical Association CPT manual, national and local policies and edits, coding guidelines developed by national societies, analysis of standard medical and surgical practices, and a review of current coding practices. The payment for a given service is determined by the total RBRVS value of the component procedures and the application of CCI to determine which procedures are payable. The introduction of new procedures, advances in technology making some procedures simpler and some more difficult to perform, the unique circumstances of individual patients, and other factors conspire to make physician and facility compensation less rational in certain situations. While the entities that maintain these standards should continuously update them to make the resulting payments as rational as possible for all situations, it is with great peril that one tampers with the value assigned to a single procedure, for there are likely dozens or hundreds of procedures and services that other specialists would consider undervalued and equally worthy of revision. Far rarer is advocacy for reducing the relative value of a procedure or service for which technological advances have reduced the work required, despite the fact that, for Medicare, physician payment is a zero-sum game due to the application of the Sustainable Growth Rate provisions of the Social Security Act as amended in 1997 by the Balanced Budget Act, which is intended to control the growth in aggregate Medicare expenditures for physicians’ services. Increasing the payment for one service requires an offsetting decrease in payments for other services.

Perhaps most fundamentally, the work of Ernst and colleagues goes to the question of whether the current payment system simply compensates physicians for the work they perform or if it serves to create financial incentives promoting the delivery of certain services and acting to limit others. The RBRVS appears to have been constructed to achieve the former result, establishing a “reference standard” that has the effect of neutralizing the incentive to perform one service over another as the compensation is identical relative to the input costs required. Unfortunately, theory does not always work in practice and airway stenting may be such an example. If physicians and facilities are not fairly compensated, or perceive that they are not fairly compensated for this service relative to other services, it is entirely likely that airway stenting will become less available to our patients. Like it or not, the health-care system does respond to financial incentives.⁷ While we rely on the fiduciary obligation of the physician to deliver the most appropriate service to each patient based exclusively on the needs of the patient, if the expertise to perform these highly complex and risky procedures is simply not available, the service will not be provided. In the absence of a centrally planned health-care system, we are left with the forces of the marketplace to determine the availability of services.