Variations in Hospital Billing for Total Joint Arthroplasty Louis S. Stryker MD, Susan M. Odum PhD, Thomas K. Fehring MD PII: DOI: Reference:
S0883-5403(14)00342-8 doi: 10.1016/j.arth.2014.03.052 YARTH 53997
To appear in:
Journal of Arthroplasty
Received date: Revised date: Accepted date:
16 August 2013 26 February 2014 3 March 2014
Please cite this article as: Stryker Louis S., Odum Susan M., Fehring Thomas K., Variations in Hospital Billing for Total Joint Arthroplasty, Journal of Arthroplasty (2014), doi: 10.1016/j.arth.2014.03.052
This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers we are providing this early version of the manuscript. The manuscript will undergo copyediting, typesetting, and review of the resulting proof before it is published in its final form. Please note that during the production process errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain.
ACCEPTED MANUSCRIPT
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Variations in Hospital Billing for Total Joint Arthroplasty
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Louis S. Stryker, M.D. 1 Susan M. Odum, PhD.2 Thomas K. Fehring, M.D.3
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Investigation performed at the OrthoCarolina Hip and Knee Center, Charlotte, NC Department of Orthopedic Surgery University of Texas Health Science Center San Antonio 7703 Floyd Curl Drive, MSC-7774 San Antonio, TX 78229
2
OrthoCarolina Research Institute, Inc. 2001 Vail Avenue, Suite 300 Charlotte, NC, 28207
3
OrthoCarolina Hip and Knee Center 2001 Vail Avenue, Suite 200A Charlotte, NC 28207
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Please address all correspondence to: Louis S. Stryker, M.D. Department of Orthopedic Surgery University of Texas Health Science Center San Antonio 7703 Floyd Curl Drive, MSC-7774 San Antonio, TX 78229 Phone: (281) 507-9496 Fax: (704) 323-3807 Email: [email protected]
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ABSTRACT Although regional variations in Medicare spending are known, it is not clear whether regional variations exist in hospital charges for total joint arthroplasty. Data from Centers for Medicare and Medicaid Services (CMS) on Diagnosis Related Groups 469 and 470 (Major Joint with and without Major Complicating or Comorbid Condition) from 2011 were analyzed for variation by region. Drastic variations in charges between institutions were apparent with significant differences between regions for hospital charges and payments. The median hospital charge nationwide was $71,601 and $46,219 for Diagnosis Related Groups 469 and 470, respectively, with corresponding median payments of $21,231 and $13,743. Weak to no correlation was found between hospital charges and payments despite adjustments for wage index, cost of living, low-income care and teaching institution status.
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Keywords: Regional variations; hospital billing; arthroplasty charges; Centers for Medicare and Medicaid Services (CMS); arthroplasty payments
2
ACCEPTED MANUSCRIPT INTRODUCTION In 2011 United States (US) healthcare costs were $2.7 trillion, representing 17.9% of the
T
gross domestic product(GDP) with Medicare spending that same year totaling $554.3
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billion and accounting for 3.6% of the GDP.1 By 2021, national healthcare expenditures are projected to reach $4.8 trillion, or 19.6% of the GDP, and Medicare spending is
SC
expected to grow an average of 6.7% per year from 2011 to 2021.2 Given these sobering
NU
statistics, healthcare reform has been advocated along with an emphasis on cost control
MA
and quality. 3,4
Orthopedic conditions and procedures, such as total hip and knee replacement, represent
ED
a major contributor to these costs and the projected increases.5 Due to their clinical
PT
success, significant growth in total hip and knee replacement rates over the last 15 years have been noted with further increases projected. 6-10 Despite decreases in physician
CE
reimbursement, attempts to control implant costs, reduced length of stay and other
AC
measures to curb expenditures, charges related to total joint replacement have continued to climb. 11,12
Previously, regional variations in Medicare per capita spending has been shown, with similar variations in total hip and knee replacement rates also reported. 6,13-15 Evaluation of regional differences in hospital charges for total hip and knee replacement, however, have been difficult to assess given a lack of transparency in hospital billing with difficulty in obtaining clear hospital charges, even for consumers. 16
3
ACCEPTED MANUSCRIPT In May 2013, the Centers for Medicare and Medicaid Services (CMS) released data regarding the most common 100 inpatient Medicare Severity-Diagnosis Related Groups
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for more than 3,000 hospitals for the fiscal year 2011. Included were the names and
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locations of the facilities, the number of procedures for each Diagnosis Related Group performed, as well as the mean hospital charge and mean total payment for each
SC
Diagnosis Related Group. Mean hospital charges were determined by each hospital for
NU
items and services provided based on what each institution charges for those services. Total payment amounts include the Diagnosis Related Group amount, bill total per
MA
diem, primary payer payment amount, beneficiary Part A coinsurance amount, beneficiary deductible amount, beneficiary blood deductible amount and Diagnosis
PT
ED
Related Group outlier amount.
Included in this release of information were data regarding Diagnosis Related Group
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469 (Major Joint Replacement or Reattachment of Lower Extremity with Major
AC
Complicating or Comorbid Condition) and 470 (Major Joint Replacement or Reattachment of Lower Extremity without Major Complicating or Comorbid Condition). CMS represents the largest payer for Diagnosis Related Groups 469 (79.74% Medicare and 3.06% Medicaid) and 470 (55.87% Medicare and 3.15% Medicaid).17
Given this recently available data, the current study seeks to elucidate what, if any, regional variations exist in mean hospital charges and mean payments for total hip and total knee arthroplasty. The study further sought to examine any relationship between institution specific factors that may account for any variations in mean hospital charges.
4
ACCEPTED MANUSCRIPT
MATERIALS AND METHODS
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Data provided by CMS regarding institution specific mean hospital charges, mean
RI P
payments and institution procedure rates for Diagnosis Related Groups 469 and 470 were examined. Data from 932 institutions was available for Diagnosis Related Group
SC
469 and 2,750 institutions for Diagnosis Related Group 470. Institutions were divided
NU
by region as defined by the United States Census Bureau and analysis performed to identify any correlation between mean hospital charges for Diagnosis Related Groups
MA
469 and 470 by geographical region (Figure 1).18 A similar analysis was performed for mean hospital payments and to evaluate for any correlation between mean hospital
ED
charges and mean payments at both national and regional levels. Additional analysis was
PT
performed to evaluate for any correlation between hospital procedure volume and mean
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hospital charges.
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Statistical Analysis
SAS (version 9.2; SAS Institute, Cary North Carolina) statistical software was used to analyze the data. The alpha level of 0.05 was selected for determining statistical significant for all associations. Standard univariate statistics were calculated to provide descriptive statistics. A bivariate analysis was conducted to determine any difference in any relationship. A Pearson correlation test was used to examine the relationships between mean hospital charges and payments in each region. Mann-Whitney tests and Kruskall-Wallis tests were accessed for significant differences of median charges or payments among regions.
5
ACCEPTED MANUSCRIPT
Sources of Funding
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No external sources of funding were received for this study.
RESULTS
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Statistical analysis of Diagnosis Related Groups 469 and 470 revealed wide variations
NU
between mean institution charges for these two procedures (Figures 2 and 3). The median average hospital charge for Diagnosis Related Group 469 was $71,601 (25th -
MA
75th percentile IQR, $53,980 – 98,586) and for Diagnosis Related Group 470 was $46,219 (25th - 75th percentile IQR, $34,842 – 62,482). This wide variation in average
ED
hospital charges was also found within regions (Figures 2 and 3). The highest median
PT
average charges for both Diagnosis Related Group 469 and 470 by region were found in the West, $98,960 and $59,099, respectively. The lowest median average charges for
CE
Diagnosis Related Groups 469 and 470 were found in the Midwest, $63,061 and
AC
$40,769, respectively. Statistically significant variations in hospital charges were identified between all regions (p
S0883-5403(14)00342-8 doi: 10.1016/j.arth.2014.03.052 YARTH 53997
To appear in:
Journal of Arthroplasty
Received date: Revised date: Accepted date:
16 August 2013 26 February 2014 3 March 2014
Please cite this article as: Stryker Louis S., Odum Susan M., Fehring Thomas K., Variations in Hospital Billing for Total Joint Arthroplasty, Journal of Arthroplasty (2014), doi: 10.1016/j.arth.2014.03.052
This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers we are providing this early version of the manuscript. The manuscript will undergo copyediting, typesetting, and review of the resulting proof before it is published in its final form. Please note that during the production process errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain.
ACCEPTED MANUSCRIPT
RI P
T
Variations in Hospital Billing for Total Joint Arthroplasty
SC
Louis S. Stryker, M.D. 1 Susan M. Odum, PhD.2 Thomas K. Fehring, M.D.3
NU
Investigation performed at the OrthoCarolina Hip and Knee Center, Charlotte, NC Department of Orthopedic Surgery University of Texas Health Science Center San Antonio 7703 Floyd Curl Drive, MSC-7774 San Antonio, TX 78229
2
OrthoCarolina Research Institute, Inc. 2001 Vail Avenue, Suite 300 Charlotte, NC, 28207
3
OrthoCarolina Hip and Knee Center 2001 Vail Avenue, Suite 200A Charlotte, NC 28207
CE
PT
ED
MA
1
AC
Please address all correspondence to: Louis S. Stryker, M.D. Department of Orthopedic Surgery University of Texas Health Science Center San Antonio 7703 Floyd Curl Drive, MSC-7774 San Antonio, TX 78229 Phone: (281) 507-9496 Fax: (704) 323-3807 Email: [email protected]
1
ACCEPTED MANUSCRIPT
NU
SC
RI P
T
ABSTRACT Although regional variations in Medicare spending are known, it is not clear whether regional variations exist in hospital charges for total joint arthroplasty. Data from Centers for Medicare and Medicaid Services (CMS) on Diagnosis Related Groups 469 and 470 (Major Joint with and without Major Complicating or Comorbid Condition) from 2011 were analyzed for variation by region. Drastic variations in charges between institutions were apparent with significant differences between regions for hospital charges and payments. The median hospital charge nationwide was $71,601 and $46,219 for Diagnosis Related Groups 469 and 470, respectively, with corresponding median payments of $21,231 and $13,743. Weak to no correlation was found between hospital charges and payments despite adjustments for wage index, cost of living, low-income care and teaching institution status.
AC
CE
PT
ED
MA
Keywords: Regional variations; hospital billing; arthroplasty charges; Centers for Medicare and Medicaid Services (CMS); arthroplasty payments
2
ACCEPTED MANUSCRIPT INTRODUCTION In 2011 United States (US) healthcare costs were $2.7 trillion, representing 17.9% of the
T
gross domestic product(GDP) with Medicare spending that same year totaling $554.3
RI P
billion and accounting for 3.6% of the GDP.1 By 2021, national healthcare expenditures are projected to reach $4.8 trillion, or 19.6% of the GDP, and Medicare spending is
SC
expected to grow an average of 6.7% per year from 2011 to 2021.2 Given these sobering
NU
statistics, healthcare reform has been advocated along with an emphasis on cost control
MA
and quality. 3,4
Orthopedic conditions and procedures, such as total hip and knee replacement, represent
ED
a major contributor to these costs and the projected increases.5 Due to their clinical
PT
success, significant growth in total hip and knee replacement rates over the last 15 years have been noted with further increases projected. 6-10 Despite decreases in physician
CE
reimbursement, attempts to control implant costs, reduced length of stay and other
AC
measures to curb expenditures, charges related to total joint replacement have continued to climb. 11,12
Previously, regional variations in Medicare per capita spending has been shown, with similar variations in total hip and knee replacement rates also reported. 6,13-15 Evaluation of regional differences in hospital charges for total hip and knee replacement, however, have been difficult to assess given a lack of transparency in hospital billing with difficulty in obtaining clear hospital charges, even for consumers. 16
3
ACCEPTED MANUSCRIPT In May 2013, the Centers for Medicare and Medicaid Services (CMS) released data regarding the most common 100 inpatient Medicare Severity-Diagnosis Related Groups
T
for more than 3,000 hospitals for the fiscal year 2011. Included were the names and
RI P
locations of the facilities, the number of procedures for each Diagnosis Related Group performed, as well as the mean hospital charge and mean total payment for each
SC
Diagnosis Related Group. Mean hospital charges were determined by each hospital for
NU
items and services provided based on what each institution charges for those services. Total payment amounts include the Diagnosis Related Group amount, bill total per
MA
diem, primary payer payment amount, beneficiary Part A coinsurance amount, beneficiary deductible amount, beneficiary blood deductible amount and Diagnosis
PT
ED
Related Group outlier amount.
Included in this release of information were data regarding Diagnosis Related Group
CE
469 (Major Joint Replacement or Reattachment of Lower Extremity with Major
AC
Complicating or Comorbid Condition) and 470 (Major Joint Replacement or Reattachment of Lower Extremity without Major Complicating or Comorbid Condition). CMS represents the largest payer for Diagnosis Related Groups 469 (79.74% Medicare and 3.06% Medicaid) and 470 (55.87% Medicare and 3.15% Medicaid).17
Given this recently available data, the current study seeks to elucidate what, if any, regional variations exist in mean hospital charges and mean payments for total hip and total knee arthroplasty. The study further sought to examine any relationship between institution specific factors that may account for any variations in mean hospital charges.
4
ACCEPTED MANUSCRIPT
MATERIALS AND METHODS
T
Data provided by CMS regarding institution specific mean hospital charges, mean
RI P
payments and institution procedure rates for Diagnosis Related Groups 469 and 470 were examined. Data from 932 institutions was available for Diagnosis Related Group
SC
469 and 2,750 institutions for Diagnosis Related Group 470. Institutions were divided
NU
by region as defined by the United States Census Bureau and analysis performed to identify any correlation between mean hospital charges for Diagnosis Related Groups
MA
469 and 470 by geographical region (Figure 1).18 A similar analysis was performed for mean hospital payments and to evaluate for any correlation between mean hospital
ED
charges and mean payments at both national and regional levels. Additional analysis was
PT
performed to evaluate for any correlation between hospital procedure volume and mean
CE
hospital charges.
AC
Statistical Analysis
SAS (version 9.2; SAS Institute, Cary North Carolina) statistical software was used to analyze the data. The alpha level of 0.05 was selected for determining statistical significant for all associations. Standard univariate statistics were calculated to provide descriptive statistics. A bivariate analysis was conducted to determine any difference in any relationship. A Pearson correlation test was used to examine the relationships between mean hospital charges and payments in each region. Mann-Whitney tests and Kruskall-Wallis tests were accessed for significant differences of median charges or payments among regions.
5
ACCEPTED MANUSCRIPT
Sources of Funding
RI P
T
No external sources of funding were received for this study.
RESULTS
SC
Statistical analysis of Diagnosis Related Groups 469 and 470 revealed wide variations
NU
between mean institution charges for these two procedures (Figures 2 and 3). The median average hospital charge for Diagnosis Related Group 469 was $71,601 (25th -
MA
75th percentile IQR, $53,980 – 98,586) and for Diagnosis Related Group 470 was $46,219 (25th - 75th percentile IQR, $34,842 – 62,482). This wide variation in average
ED
hospital charges was also found within regions (Figures 2 and 3). The highest median
PT
average charges for both Diagnosis Related Group 469 and 470 by region were found in the West, $98,960 and $59,099, respectively. The lowest median average charges for
CE
Diagnosis Related Groups 469 and 470 were found in the Midwest, $63,061 and
AC
$40,769, respectively. Statistically significant variations in hospital charges were identified between all regions (p
