CLINICAL ARTICLE
Inpatient Versus Outpatient Cleft Lip Repair and Alveolar Bone Grafting A Cost Analysis Mark Graham Albert, MD, Oksana Olegovna Babchenko, BS, Janice Fay Lalikos, MD, and Douglas Miller Rothkopf, MD Background: The lifetime cost of a child with an orofacial cleft is estimated at $101,000, which amounts to $697 million total for those born each year with orofacial clefts. There has been a trend toward outpatient procedures for cleft lip repair (CLR) and alveolar bone grafting (ABG), and studies have shown no disparities in safety or outcome between inpatient and ambulatory treatment. The financial implications of outpatient versus inpatient procedures have not been compared. Methods: Financial data were collected for outpatient (n = 33) and inpatient (n = 2) CLR, as well as outpatient (n = 7) and inpatient (n = 5) ABG during a 5-year period at our institution. We examined hospital charges and reimbursement for these procedures by private insurance plans and Medicaid Managed Care (MMC) plans. Results: The average total reimbursements for inpatient and outpatient CLR were similar at $6848 and $5557, respectively. Average facility reimbursement for CLR was greater for inpatient ($5344) than outpatient ($4291) procedures. Average professional reimbursement was similar between inpatient ($1504) and outpatient ($1266) CLR. For ABG, the average total inpatient reimbursement was $14,573, whereas outpatient was $8877. Average facility reimbursements were greater for inpatient ($12,398) than outpatient ($7183) ABG. Average professional reimbursement was similar between inpatient ($2175) and outpatient ($1693) ABG, with 35% and 31% of charges reimbursed, respectively. A substantial difference existed between reimbursements based on insurance types for both outpatient CLR and outpatient ABG. On average for CLR, commercial payers reimbursed 52% ($7344) of overall charges, whereas Medicaid and MMC reimbursed 9% ($1447). For ABG, commercial payers reimbursed an average of 78% ($11,950) of overall charges, whereas Medicaid and MMC reimbursed 10% ($1192). Conclusions: Fewer patients’ insurance companies are reimbursing for inpatient stays; in many cases, even patients who remain hospitalized up to 48 hours are treated as ‘‘day surgery’’ from a reimbursement perspective. For outpatient surgery, a greater percentage of CLR and ABG charges were successfully recouped compared to inpatient surgery. Awareness of higher payment for inpatient surgery and potential savings through use of the outpatient setting is crucial for hospitals and the US health care system as a whole. Key Words: inpatient, outpatient, cleft, alveolar, cost (Ann Plast Surg 2014;73: S126YS129)
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left lip and palate are among the most common birth defects in the United States, occurring in approximately 1 in 940 and 1 in 1574 live births, respectively.1 The societal impact of these conditions is vast, encompassing financial, psychosocial, and health Received December 18, 2013, and accepted for publication, after revision, December 30, 2013. From the Division of Plastic Surgery, University of Massachusetts, Worcester, MA. Conflicts of interest and sources of funding: none declared. Reprints: Mark Graham Albert, MD, Division of Plastic Surgery, University of Massachusetts, 55 Lake Ave, Worcester, MA 01655. E-mail: MAlbert520@ gmail.com. Copyright * 2014 by Lippincott Williams & Wilkins ISSN: 0148-7043/14/7302-S126 DOI: 10.1097/SAP.0000000000000149
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implications. The lifetime cost of a child with an orofacial cleft was estimated at $101,000 in 1992, which amounts to $697 million total for those born each year with orofacial clefts.2 Lifetime costs for patients with orofacial clefts peak in infancy, ref lecting surgical repair as a driver of expenditure.3 Surgical repair constitutes 85% of medical cost during the first 18 months of life for children with cleft palate4 and 91.4% of medical cost during the first year of life for children with unilateral cleft lip.5 Due to the complexity of cleft care, financial analysis of health care costs associated with orofacial clefts was identified as a research gap by the National Center on Birth Defects and Developmental Disabilities.6 There has been a shift in cleft surgery from nonteaching to teaching hospitals, with an increase of 13.4% of these procedures performed at academic centers from 1997 to 2007.7 Many private physicians are hesitant to accept Medicaid due to poor reimbursement, and thus most of Medicaid patients are now being treated by a small fraction of practitioners at academic centers.8 At Children’s Hospital of Colorado, Medicaid insurance among the cleft population increased from 41% to 63% from 2005 to 2010. Deleyiannis et al examined cleft care’s financial impact on a hospital system by comparing charges, hospital costs, and reimbursement between insurance types over 6 years. They found that, although Medicaid reimbursed less than private insurance for cleft lip repair (CLR), $5525 and $10,274, respectively, Medicaid’s reimbursement was still adequate to cover the direct hospital costs and resulted in small but positive margins.9 Due to improvement in technology, as well as emphasis on cost reduction and efficiency, ambulatory surgery has been more in the United States since the 1980s, with a 300% increase in the ambulatory procedures from 1996 to 2006.10 Cleft lip repair and alveolar bone grafting (ABG), specifically, are also becoming increasingly common as outpatient surgeries. Studies have shown no disparity in safety or outcome between inpatient and ambulatory treatment.11Y14 The economic implications of outpatient versus inpatient surgery for CLR and ABG have not been directly compared to date.
PATIENTS AND METHODS We searched the financial database at our institution during a 5-year period using Current Procedural Terminology (CPT) codes to identify outpatient cases, and diagnosis-related group (DRG) codes to identify inpatient cases. The CPT codes searched to identify CLR patients were 40700, 40701, 40702, 40720, and 40761, and to identify ABG patients was 42210 (Table 1). DRG codes searched to identify CLR and ABG were 89, 131, 132, 133, 134, 137, and 138 (Table 2). During the last 5 years at our institution, a total of 33 outpatient and 2 inpatient CLRs were performed, and 7 outpatient and 5 inpatient ABGs were performed. Financial information was obtained including facility charges, facility payments, professional charges, professional payments, and insurance type. Facility charges include operating room, anesthesia, recovery room, pharmacy, room and board; professional charges include surgeons’ fees. Comparisons were made between inpatient and outpatient insurance reimbursements for CLR and ABG, as well as reimbursements between private insurance and Medicaid Managed Annals of Plastic Surgery
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Inpatient-Outpatient Cleft Lip and ABG Cost
TABLE 1. Outpatient CLR and ABG CPT Codes
TABLE 3. CLR: Insurance Type
40,700 (n = 13)
Outpatient
40,701 (n = 2) 40,702 (n = 2) 40,720 (n = 13) 40,761 (n = 3)
42,210 (n = 2)
Plastic repair of cleft lip/nasal deformity; primary, partial, or complete, unilateral Plastic repair of cleft lip/nasal deformity; primary, bilateral, 1-stage procedure Plastic repair of cleft lip/nasal deformity; primary, bilateral, 1 of 2 stages Plastic repair of cleft lip/nasal deformity; secondary, by recreation of defect and reclosure Plastic repair of cleft lip/nasal deformity with cross lip pedicle flap, including sectioning and inserting of pedicle Palatoplasty for cleft palate, with bone graft to alveolar ridge (includes obtaining graft)
Care (MMC) [MassHealth, Network Health, Boston Medical Center (BMC) HealthNet, and Neighborhood Health Plan] for outpatient CLR and ABG only. Comparison between private and public insurance was not done for inpatient procedures due to small sample size.
RESULTS Cleft Lip Repair Ten of the 33 outpatient CLR patients were covered by MMC, which included Network Health (n = 7), MassHealth (n = 2), and BMC HealthNet (n = 1). Twenty-three outpatient CLR patients had commercial insurance plans, which included Blue Cross (n = 10), Harvard Pilgrim (n = 5), Fallon (n = 5), Tufts (n = 2), and Ultra Benefits PPO (n = 1). Inpatient CLR patients were insured under Fallon (n = 1) and Neighborhood Health Plan (n = 1) (Table 3). The average total reimbursement, across all insurance types, for inpatient and outpatient CLR were $6848 and $5557, respectively. The percentages of our institution’s charges that were reimbursed for inpatient and outpatient procedures were 32% and 38%, respectively. Average facility reimbursement for CLR was greater for inpatient ($5344) than outpatient ($4291) procedures, but a greater percentage of outpatient facility charges (45%) was reimbursed than inpatient facility charges (34%) (Fig. 1). Average professional reimbursement was similar between inpatient ($1504) and outpatient ($1266) CLR, and the percentages of professional charges that were reimbursed for inpatient and outpatient CLR were very similar at 26% and 25%, respectively (Fig. 2).
Alveolar Bone Grafting Seven outpatient ABG procedures and 5 inpatient ABG procedures were performed during the last 5 years at our institution. Of 7 outpatient ABG patients, 2 were insured under MMC: Network Health (n = 1) and MassHealth (n = 1). The other 5 outpatients had
MMC (n = 10)
Commercial plans (n = 23)
Inpatient Network Health (n = 7) MassHealth (n = 2) BMC HealthNet (n = 1) Blue Cross (n = 10) Harvard Pilgrim (n = 5) Fallon (n = 5) Tufts (n = 2) Ultra Benefits PPO (n = 1)
MMC (n = 1)
Neighborhood Health Plan (n = 1)
Commercial plan (n = 1)
Fallon (n = 1)
commercial insurance plans: Blue Cross (n =1), Fallon (n = 1), Harvard Pilgrim (n = 1), Capitol District (n = 1), and Tufts (n = 1). Inpatient ABG patients were insured under Blue Cross (n = 1), Fallon (n = 1), Great West (n = 1), and Boston Medical Center HealthNet (n = 2) (Table 4). For ABG, the average total inpatient reimbursement was $14,573, whereas outpatient was $8877. Average facility reimbursements were greater for inpatient ($12,398) than outpatient ($7183) ABG, but outpatient facility charges were reimbursed at a greater percentage (80%) than inpatient facility charges (30%) (Fig. 3). Average professional reimbursement was similar between inpatient ($2175) and outpatient ($1693) ABG, with 35% and 31% of charges reimbursed, respectively (Fig. 4). Inpatient reimbursement was consistently greater than outpatient reimbursement for ABG. Average CLR facility reimbursement was 24.5% greater with inpatient repair (outpatient $4291 vs inpatient $5344), whereas average professional reimbursement was 18.8% greater with inpatient CLR (outpatient $1266 vs inpatient $1504). For ABG, average facility reimbursement was 72.6% greater for inpatient procedures (outpatient $7183 vs inpatient $12,398), whereas average professional reimbursement was 28.5% greater for inpatient (outpatient $1693 vs inpatient $2175).
Insurance Private and public insurance reimbursements were compared for outpatient CLR and ABG procedures. Of 33 outpatient CLR
TABLE 2. Inpatient CLR and ABG DRG Codes 89 (n = 1) 131 (n = 1) 132 (n = 4) 133 (n = 0) 134 (n = 1) 137 (n = 0) 138 (n = 0)
Concussion with complication or comorbidity (CC) Cranial/facial procedures with CC/major complication or comorbidity (MCC) Cranial/facial procedures without CC/MCC Other ear, nose, mouth, and throat OR procedures with CC/MCC Other ear, nose, mouth, and throat OR procedures without CC/MCC Mouth procedures with CC/MCC Mouth procedures without CC/MCC
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FIGURE 1. Cleft lip repair facility reimbursement. www.annalsplasticsurgery.com
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FIGURE 2. Cleft lip repair professional reimbursement.
FIGURE 3. Alveolar bone grafting facility reimbursement.
procedures, 33 were paid for by private insurance and 10 by MMC. On average, for CLR total reimbursement, private insurers paid $7344, which amounted to 52% of charges; MMC insurers paid $1447, which amounted to 9% of charges. Average facility reimbursement for CLR from commercial payers was $5881, which constituted 62% of the facility charges; MMC paid an average of $635, or 6% of the facility charges. Average professional reimbursement from private payers was $1463, or 32% of professional charges; average professional reimbursement from MMC payers was $812, or 13% of professional charges. Similar reimbursement differences between private and public payers existed for outpatient ABG procedures. Of 7 outpatient ABG procedures, 5 were paid for by private insurance and 2 by MMC. On average, for ABG total reimbursement, private insurers paid $11,950, which amounted to 78% of charges; MMC insurers paid $1192, which amounted to 10% of charges. Average facility reimbursement for ABG from commercial payers was $9946, which constituted 107% of the facility charges; MMC paid an average of $276, or 3% of the facility charges. Average professional reimbursement from private payers was $2004, comprising 34% of professional charges; average professional reimbursement from MMC payers was $916, or 21% of professional charges (Table 5).
small difference in reimbursement for inpatient CLR inpatient versus outpatient CLR, it is likely most economically advantageous to do these procedures on an outpatient basis. For ABG, inpatient reimbursement was substantially greater than outpatient. Here too, insurance reimbursed a greater percentage of charges for outpatient versus inpatient ABG procedures. Given considerably greater reimbursement for inpatient ABG, it is advantageous to proceed with inpatient ABG after obtaining prior authorization. In cases where prior authorization may be denied, an appeal process should be initiated because ABG procedures are protected by InterQual criteria. These sets of criteria provide clinical support to health care practitioners seeking prior authorization for procedures. If issues arise, an InterQual Smart Sheet should be faxed to insurance companies for consideration. As inpatient hospitalizations produce greater hospital charges, fewer insurance companies are reimbursing for inpatient stays. In many cases, even patients who remain hospitalized up to 48 hours are treated as ‘‘day surgery’’ from a reimbursement perspective. This was reflected in the paucity of ‘‘inpatient’’ cases during the last 5 years at our institution. A limitation of our study was that inpatient cases often involved additional procedures in addition to the CLR or ABG of interest in this article. This can be attributed to the fact that longer, more complex cases are frequently performed on an inpatient basis. As a result, we saw an inf lation of our inpatient facility and professional charges. Although inpatient reimbursement was consistently greater than outpatient reimbursement, the greatest difference existed in facility reimbursement; professional reimbursement was less affected. Similarly, although private reimbursement was considerably greater than MMC, the greatest difference existed in reimbursement of
DISCUSSION With growing emphasis on efficiency and financial responsibility in health care, outpatient surgery has become increasingly more common. Both CLR and ABG have followed this trend. We found that inpatient reimbursement was consistently greater than outpatient reimbursement for both CLR and ABG. However, the percentage of charges reimbursed was greater for outpatient procedures. Due to the TABLE 4. ABG: Insurance Type Outpatient MMC (n = 2)
Commercial plans (n = 5)
Inpatient Network Health (n = 1) MassHealth (n = 1) Blue Cross (n = 1) Fallon (n = 1) Harvard Pilgrim (n = 1) Capital District (n = 1) Tufts (n = 1)
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MMC (n = 2)
BMC HealthNet (n = 2)
Commercial Blue Cross (n = 1) Plans (n = 3) Fallon (n = 1) Great West (n = 1)
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FIGURE 4. Alveolar bone grafting professional reimbursement. * 2014 Lippincott Williams & Wilkins
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Inpatient-Outpatient Cleft Lip and ABG Cost
TABLE 5. Inpatient and Outpatient CLR and ABG Charges and Reimbursement Facility Professional Total Facility Facility Reimbursement, Professional Professional Reimbursement, Total Total Reimbursement, Charges Reimbursement % Charges Reimbursement % Charges Reimbursement % Inpatient CLR All insurances $15,794 (n = 2) Outpatient CLR All insurances $9613 (n = 33) Commercial $9521 (n = 23) MMC (n = 10) $9824 Inpatient ABG All insurances $41,770 (n = 5) Outpatient ABG All insurances $8969 (n = 7) Commercial $9334 (n = 5) MMC (n = 2) $8056
$5344
34
$5804
$1504
26
$21,598
$6848
32
$4291
45
$5081
$1266
25
$14,694
$5557
38
$5881
62
$4613
$1463
32
$14,134
$7344
52
$635
6
$6158
$812
13
$15,982
$1447
9
$12,398
30
$6191
$2175
35
$47,961
$14,573
30
$7183
80
$5513
$1693
31
$14,482
$8877
61
$9946
107
$5958
$2004
34
$15,292
$11,950
78
$276
3
$4402
$916
21
$12,458
$1192
10
facility charges, whereas professional reimbursement was less affected. This suggests that institutions, rather than physicians, are most affected by the decision to operate on an inpatient versus outpatient basis. This also applies when considering whether a patient has private versus public insurance. Larger hospitals may better buffer the decrease in facility reimbursement that was seen with MMC, whereas smaller groups of physicians in private networks may not accept MMC due to apprehension about sustainability. With increasing cost consciousness in contemporary health care, awareness of higher payment for inpatient surgery and potential savings through use of the outpatient setting for these common pediatric procedures is crucial for hospitals and the US health care system in the future.
REFERENCES 1. Parker SE, Mai CT, Canfield MA, et al. Updated national birth prevalence estimates for selected birth defects in the United States, 2004Y2006. Birth Defects Res A Clin Mol Teratol. 2010;88:1008Y1016. 2. Waitzman NJ, Romano PS, Scheffler RM, et al. Economic costs of birth defects and cerebral palsyVUnited States, 1992. MMWR Morb Mortal Wkly Rep. 1995;44:694Y699. 3. Boulet SL, Grosse SD, Honein MA, et al. Children with orofacial clefts: healthcare use and costs among a privately insured population. Public Health Rep. 2009;124:447.
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4. Abbott MM, Alkire BC, Meara JG. The value proposition: using a cost improvement map to improve value for patients with nonsyndromic, isolated cleft palate. Plast Reconstr Surg. 2011;127:1650. 5. Abbott MM, Meara JG. A microcosting approach for isolated, unilateral cleft lip care in the first year of life. Plast Reconstr Surg. 2011;127:333Y339. 6. Yazdy MM, Honein MA, Rasmussen SA, et al. Priorities for future public health research in orofacial clefts. Cleft Palate Craniofac J. 2007;44:351Y357. 7. Basseri B, Kianmahd BD, Roostaeian J, et al. Current national incidence, trends, and health care resource utilization of cleft lip-cleft palate. Plast Reconstr Surg 2011;127:1255Y1262. 8. Cunningham PJ, May J. Medicaid Patients Increasingly Concentrated Among Physicians. Washington, DC: Center for Studying Health System Change; 2006. 9. Deleyiannis FW, TeBickhorst S, Castro DA. The financial impact of multidisciplinary cleft care: an analysis of hospital revenue to advance program development. Plast Reconstr Surg. 2013;131:615Y622. 10. Cullen KA, Hall MJ, Golosinskiy A. Ambulatory surgery in the United States, 2006. US Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Health Statistics, 2009. 11. Rosen H, Barrios LM, Reinisch JF, et al. Outpatient cleft lip repair. Plast Reconstr Surg. 2003;112:381Y387. 12. Kim TH, Rothkopf DM. Ambulatory surgery for cleft lip repair. Ann Plast Surg. 1999;42:442Y444. 13. Al-Thunyan AM, Aldekhayel SA, Al-Meshal O, et al. Ambulatory cleft lip repair. Plast Reconstr Surg. 2009;124:2048Y2053. 14. Perry CW, Lowenstein A, Rothkopf DM. Ambulatory alveolar bone grafting. Plast Reconstr Surg. 2005;116:736Y739.
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Inpatient Versus Outpatient Cleft Lip Repair and Alveolar Bone Grafting A Cost Analysis Mark Graham Albert, MD, Oksana Olegovna Babchenko, BS, Janice Fay Lalikos, MD, and Douglas Miller Rothkopf, MD Background: The lifetime cost of a child with an orofacial cleft is estimated at $101,000, which amounts to $697 million total for those born each year with orofacial clefts. There has been a trend toward outpatient procedures for cleft lip repair (CLR) and alveolar bone grafting (ABG), and studies have shown no disparities in safety or outcome between inpatient and ambulatory treatment. The financial implications of outpatient versus inpatient procedures have not been compared. Methods: Financial data were collected for outpatient (n = 33) and inpatient (n = 2) CLR, as well as outpatient (n = 7) and inpatient (n = 5) ABG during a 5-year period at our institution. We examined hospital charges and reimbursement for these procedures by private insurance plans and Medicaid Managed Care (MMC) plans. Results: The average total reimbursements for inpatient and outpatient CLR were similar at $6848 and $5557, respectively. Average facility reimbursement for CLR was greater for inpatient ($5344) than outpatient ($4291) procedures. Average professional reimbursement was similar between inpatient ($1504) and outpatient ($1266) CLR. For ABG, the average total inpatient reimbursement was $14,573, whereas outpatient was $8877. Average facility reimbursements were greater for inpatient ($12,398) than outpatient ($7183) ABG. Average professional reimbursement was similar between inpatient ($2175) and outpatient ($1693) ABG, with 35% and 31% of charges reimbursed, respectively. A substantial difference existed between reimbursements based on insurance types for both outpatient CLR and outpatient ABG. On average for CLR, commercial payers reimbursed 52% ($7344) of overall charges, whereas Medicaid and MMC reimbursed 9% ($1447). For ABG, commercial payers reimbursed an average of 78% ($11,950) of overall charges, whereas Medicaid and MMC reimbursed 10% ($1192). Conclusions: Fewer patients’ insurance companies are reimbursing for inpatient stays; in many cases, even patients who remain hospitalized up to 48 hours are treated as ‘‘day surgery’’ from a reimbursement perspective. For outpatient surgery, a greater percentage of CLR and ABG charges were successfully recouped compared to inpatient surgery. Awareness of higher payment for inpatient surgery and potential savings through use of the outpatient setting is crucial for hospitals and the US health care system as a whole. Key Words: inpatient, outpatient, cleft, alveolar, cost (Ann Plast Surg 2014;73: S126YS129)
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left lip and palate are among the most common birth defects in the United States, occurring in approximately 1 in 940 and 1 in 1574 live births, respectively.1 The societal impact of these conditions is vast, encompassing financial, psychosocial, and health Received December 18, 2013, and accepted for publication, after revision, December 30, 2013. From the Division of Plastic Surgery, University of Massachusetts, Worcester, MA. Conflicts of interest and sources of funding: none declared. Reprints: Mark Graham Albert, MD, Division of Plastic Surgery, University of Massachusetts, 55 Lake Ave, Worcester, MA 01655. E-mail: MAlbert520@ gmail.com. Copyright * 2014 by Lippincott Williams & Wilkins ISSN: 0148-7043/14/7302-S126 DOI: 10.1097/SAP.0000000000000149
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implications. The lifetime cost of a child with an orofacial cleft was estimated at $101,000 in 1992, which amounts to $697 million total for those born each year with orofacial clefts.2 Lifetime costs for patients with orofacial clefts peak in infancy, ref lecting surgical repair as a driver of expenditure.3 Surgical repair constitutes 85% of medical cost during the first 18 months of life for children with cleft palate4 and 91.4% of medical cost during the first year of life for children with unilateral cleft lip.5 Due to the complexity of cleft care, financial analysis of health care costs associated with orofacial clefts was identified as a research gap by the National Center on Birth Defects and Developmental Disabilities.6 There has been a shift in cleft surgery from nonteaching to teaching hospitals, with an increase of 13.4% of these procedures performed at academic centers from 1997 to 2007.7 Many private physicians are hesitant to accept Medicaid due to poor reimbursement, and thus most of Medicaid patients are now being treated by a small fraction of practitioners at academic centers.8 At Children’s Hospital of Colorado, Medicaid insurance among the cleft population increased from 41% to 63% from 2005 to 2010. Deleyiannis et al examined cleft care’s financial impact on a hospital system by comparing charges, hospital costs, and reimbursement between insurance types over 6 years. They found that, although Medicaid reimbursed less than private insurance for cleft lip repair (CLR), $5525 and $10,274, respectively, Medicaid’s reimbursement was still adequate to cover the direct hospital costs and resulted in small but positive margins.9 Due to improvement in technology, as well as emphasis on cost reduction and efficiency, ambulatory surgery has been more in the United States since the 1980s, with a 300% increase in the ambulatory procedures from 1996 to 2006.10 Cleft lip repair and alveolar bone grafting (ABG), specifically, are also becoming increasingly common as outpatient surgeries. Studies have shown no disparity in safety or outcome between inpatient and ambulatory treatment.11Y14 The economic implications of outpatient versus inpatient surgery for CLR and ABG have not been directly compared to date.
PATIENTS AND METHODS We searched the financial database at our institution during a 5-year period using Current Procedural Terminology (CPT) codes to identify outpatient cases, and diagnosis-related group (DRG) codes to identify inpatient cases. The CPT codes searched to identify CLR patients were 40700, 40701, 40702, 40720, and 40761, and to identify ABG patients was 42210 (Table 1). DRG codes searched to identify CLR and ABG were 89, 131, 132, 133, 134, 137, and 138 (Table 2). During the last 5 years at our institution, a total of 33 outpatient and 2 inpatient CLRs were performed, and 7 outpatient and 5 inpatient ABGs were performed. Financial information was obtained including facility charges, facility payments, professional charges, professional payments, and insurance type. Facility charges include operating room, anesthesia, recovery room, pharmacy, room and board; professional charges include surgeons’ fees. Comparisons were made between inpatient and outpatient insurance reimbursements for CLR and ABG, as well as reimbursements between private insurance and Medicaid Managed Annals of Plastic Surgery
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Inpatient-Outpatient Cleft Lip and ABG Cost
TABLE 1. Outpatient CLR and ABG CPT Codes
TABLE 3. CLR: Insurance Type
40,700 (n = 13)
Outpatient
40,701 (n = 2) 40,702 (n = 2) 40,720 (n = 13) 40,761 (n = 3)
42,210 (n = 2)
Plastic repair of cleft lip/nasal deformity; primary, partial, or complete, unilateral Plastic repair of cleft lip/nasal deformity; primary, bilateral, 1-stage procedure Plastic repair of cleft lip/nasal deformity; primary, bilateral, 1 of 2 stages Plastic repair of cleft lip/nasal deformity; secondary, by recreation of defect and reclosure Plastic repair of cleft lip/nasal deformity with cross lip pedicle flap, including sectioning and inserting of pedicle Palatoplasty for cleft palate, with bone graft to alveolar ridge (includes obtaining graft)
Care (MMC) [MassHealth, Network Health, Boston Medical Center (BMC) HealthNet, and Neighborhood Health Plan] for outpatient CLR and ABG only. Comparison between private and public insurance was not done for inpatient procedures due to small sample size.
RESULTS Cleft Lip Repair Ten of the 33 outpatient CLR patients were covered by MMC, which included Network Health (n = 7), MassHealth (n = 2), and BMC HealthNet (n = 1). Twenty-three outpatient CLR patients had commercial insurance plans, which included Blue Cross (n = 10), Harvard Pilgrim (n = 5), Fallon (n = 5), Tufts (n = 2), and Ultra Benefits PPO (n = 1). Inpatient CLR patients were insured under Fallon (n = 1) and Neighborhood Health Plan (n = 1) (Table 3). The average total reimbursement, across all insurance types, for inpatient and outpatient CLR were $6848 and $5557, respectively. The percentages of our institution’s charges that were reimbursed for inpatient and outpatient procedures were 32% and 38%, respectively. Average facility reimbursement for CLR was greater for inpatient ($5344) than outpatient ($4291) procedures, but a greater percentage of outpatient facility charges (45%) was reimbursed than inpatient facility charges (34%) (Fig. 1). Average professional reimbursement was similar between inpatient ($1504) and outpatient ($1266) CLR, and the percentages of professional charges that were reimbursed for inpatient and outpatient CLR were very similar at 26% and 25%, respectively (Fig. 2).
Alveolar Bone Grafting Seven outpatient ABG procedures and 5 inpatient ABG procedures were performed during the last 5 years at our institution. Of 7 outpatient ABG patients, 2 were insured under MMC: Network Health (n = 1) and MassHealth (n = 1). The other 5 outpatients had
MMC (n = 10)
Commercial plans (n = 23)
Inpatient Network Health (n = 7) MassHealth (n = 2) BMC HealthNet (n = 1) Blue Cross (n = 10) Harvard Pilgrim (n = 5) Fallon (n = 5) Tufts (n = 2) Ultra Benefits PPO (n = 1)
MMC (n = 1)
Neighborhood Health Plan (n = 1)
Commercial plan (n = 1)
Fallon (n = 1)
commercial insurance plans: Blue Cross (n =1), Fallon (n = 1), Harvard Pilgrim (n = 1), Capitol District (n = 1), and Tufts (n = 1). Inpatient ABG patients were insured under Blue Cross (n = 1), Fallon (n = 1), Great West (n = 1), and Boston Medical Center HealthNet (n = 2) (Table 4). For ABG, the average total inpatient reimbursement was $14,573, whereas outpatient was $8877. Average facility reimbursements were greater for inpatient ($12,398) than outpatient ($7183) ABG, but outpatient facility charges were reimbursed at a greater percentage (80%) than inpatient facility charges (30%) (Fig. 3). Average professional reimbursement was similar between inpatient ($2175) and outpatient ($1693) ABG, with 35% and 31% of charges reimbursed, respectively (Fig. 4). Inpatient reimbursement was consistently greater than outpatient reimbursement for ABG. Average CLR facility reimbursement was 24.5% greater with inpatient repair (outpatient $4291 vs inpatient $5344), whereas average professional reimbursement was 18.8% greater with inpatient CLR (outpatient $1266 vs inpatient $1504). For ABG, average facility reimbursement was 72.6% greater for inpatient procedures (outpatient $7183 vs inpatient $12,398), whereas average professional reimbursement was 28.5% greater for inpatient (outpatient $1693 vs inpatient $2175).
Insurance Private and public insurance reimbursements were compared for outpatient CLR and ABG procedures. Of 33 outpatient CLR
TABLE 2. Inpatient CLR and ABG DRG Codes 89 (n = 1) 131 (n = 1) 132 (n = 4) 133 (n = 0) 134 (n = 1) 137 (n = 0) 138 (n = 0)
Concussion with complication or comorbidity (CC) Cranial/facial procedures with CC/major complication or comorbidity (MCC) Cranial/facial procedures without CC/MCC Other ear, nose, mouth, and throat OR procedures with CC/MCC Other ear, nose, mouth, and throat OR procedures without CC/MCC Mouth procedures with CC/MCC Mouth procedures without CC/MCC
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FIGURE 1. Cleft lip repair facility reimbursement. www.annalsplasticsurgery.com
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FIGURE 2. Cleft lip repair professional reimbursement.
FIGURE 3. Alveolar bone grafting facility reimbursement.
procedures, 33 were paid for by private insurance and 10 by MMC. On average, for CLR total reimbursement, private insurers paid $7344, which amounted to 52% of charges; MMC insurers paid $1447, which amounted to 9% of charges. Average facility reimbursement for CLR from commercial payers was $5881, which constituted 62% of the facility charges; MMC paid an average of $635, or 6% of the facility charges. Average professional reimbursement from private payers was $1463, or 32% of professional charges; average professional reimbursement from MMC payers was $812, or 13% of professional charges. Similar reimbursement differences between private and public payers existed for outpatient ABG procedures. Of 7 outpatient ABG procedures, 5 were paid for by private insurance and 2 by MMC. On average, for ABG total reimbursement, private insurers paid $11,950, which amounted to 78% of charges; MMC insurers paid $1192, which amounted to 10% of charges. Average facility reimbursement for ABG from commercial payers was $9946, which constituted 107% of the facility charges; MMC paid an average of $276, or 3% of the facility charges. Average professional reimbursement from private payers was $2004, comprising 34% of professional charges; average professional reimbursement from MMC payers was $916, or 21% of professional charges (Table 5).
small difference in reimbursement for inpatient CLR inpatient versus outpatient CLR, it is likely most economically advantageous to do these procedures on an outpatient basis. For ABG, inpatient reimbursement was substantially greater than outpatient. Here too, insurance reimbursed a greater percentage of charges for outpatient versus inpatient ABG procedures. Given considerably greater reimbursement for inpatient ABG, it is advantageous to proceed with inpatient ABG after obtaining prior authorization. In cases where prior authorization may be denied, an appeal process should be initiated because ABG procedures are protected by InterQual criteria. These sets of criteria provide clinical support to health care practitioners seeking prior authorization for procedures. If issues arise, an InterQual Smart Sheet should be faxed to insurance companies for consideration. As inpatient hospitalizations produce greater hospital charges, fewer insurance companies are reimbursing for inpatient stays. In many cases, even patients who remain hospitalized up to 48 hours are treated as ‘‘day surgery’’ from a reimbursement perspective. This was reflected in the paucity of ‘‘inpatient’’ cases during the last 5 years at our institution. A limitation of our study was that inpatient cases often involved additional procedures in addition to the CLR or ABG of interest in this article. This can be attributed to the fact that longer, more complex cases are frequently performed on an inpatient basis. As a result, we saw an inf lation of our inpatient facility and professional charges. Although inpatient reimbursement was consistently greater than outpatient reimbursement, the greatest difference existed in facility reimbursement; professional reimbursement was less affected. Similarly, although private reimbursement was considerably greater than MMC, the greatest difference existed in reimbursement of
DISCUSSION With growing emphasis on efficiency and financial responsibility in health care, outpatient surgery has become increasingly more common. Both CLR and ABG have followed this trend. We found that inpatient reimbursement was consistently greater than outpatient reimbursement for both CLR and ABG. However, the percentage of charges reimbursed was greater for outpatient procedures. Due to the TABLE 4. ABG: Insurance Type Outpatient MMC (n = 2)
Commercial plans (n = 5)
Inpatient Network Health (n = 1) MassHealth (n = 1) Blue Cross (n = 1) Fallon (n = 1) Harvard Pilgrim (n = 1) Capital District (n = 1) Tufts (n = 1)
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MMC (n = 2)
BMC HealthNet (n = 2)
Commercial Blue Cross (n = 1) Plans (n = 3) Fallon (n = 1) Great West (n = 1)
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FIGURE 4. Alveolar bone grafting professional reimbursement. * 2014 Lippincott Williams & Wilkins
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Annals of Plastic Surgery
& Volume 73, Supplement 2, December 2014
Inpatient-Outpatient Cleft Lip and ABG Cost
TABLE 5. Inpatient and Outpatient CLR and ABG Charges and Reimbursement Facility Professional Total Facility Facility Reimbursement, Professional Professional Reimbursement, Total Total Reimbursement, Charges Reimbursement % Charges Reimbursement % Charges Reimbursement % Inpatient CLR All insurances $15,794 (n = 2) Outpatient CLR All insurances $9613 (n = 33) Commercial $9521 (n = 23) MMC (n = 10) $9824 Inpatient ABG All insurances $41,770 (n = 5) Outpatient ABG All insurances $8969 (n = 7) Commercial $9334 (n = 5) MMC (n = 2) $8056
$5344
34
$5804
$1504
26
$21,598
$6848
32
$4291
45
$5081
$1266
25
$14,694
$5557
38
$5881
62
$4613
$1463
32
$14,134
$7344
52
$635
6
$6158
$812
13
$15,982
$1447
9
$12,398
30
$6191
$2175
35
$47,961
$14,573
30
$7183
80
$5513
$1693
31
$14,482
$8877
61
$9946
107
$5958
$2004
34
$15,292
$11,950
78
$276
3
$4402
$916
21
$12,458
$1192
10
facility charges, whereas professional reimbursement was less affected. This suggests that institutions, rather than physicians, are most affected by the decision to operate on an inpatient versus outpatient basis. This also applies when considering whether a patient has private versus public insurance. Larger hospitals may better buffer the decrease in facility reimbursement that was seen with MMC, whereas smaller groups of physicians in private networks may not accept MMC due to apprehension about sustainability. With increasing cost consciousness in contemporary health care, awareness of higher payment for inpatient surgery and potential savings through use of the outpatient setting for these common pediatric procedures is crucial for hospitals and the US health care system in the future.
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