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Patients Find Medicare Reimbursement to Surgeons Too Low

A recent study found that patients think Medicare reimbursement for certain knee surgeries is too low and they would pay more out-of-pocket for the procedures.

October 24, 2016 – Patients may be willing to pay more out-of-pocket expenses for certain medicals services, such as knee surgeries, especially as providers face lower Medicare reimbursement rates, a recent study in Orthopedics contended.

The survey of 231 patients at two sports medicine clinics showed that 65 percent of respondents felt that Medicare reimbursement for a meniscectomy was too low, while 57 percent of respondents agreed that Medicare reimbursement for an ACL reconstruction was too low.

Patients reported that they were willing to pay $2,286 in out-of-pocket expenses for a meniscectomy and $3,517 for an ACL reconstruction, which were four times and 11 times the actual Medicare reimbursement for the respective surgeries.

“Our study demonstrates that patients place a higher value than what is reimbursed for these types of procedures and are willing to pay more out-of-pocket costs,” Kelechi Okoroha, MD, a fourth-year resident in Henry Ford’s Department of Orthopedic Surgery and the study’s lead author, stated in a press release. “When told of the actual reimbursement payments, patients believed the payments should have been at least five times more than the current value.”

Researchers at Henry Ford Hospital found that patients valued provider compensation for certain knee surgeries much higher than actual reimbursement rates. Patients reported that a reasonable fee for meniscectomy was $8,096 and $11,794 for ACL reconstruction.

However, Medicare typically reimbursed surgeons about $576 for meniscectomies and $1,013 for ACL reconstructions, making patient estimates 14 times and 11 times higher than the actual claims reimbursement amounts.

When informed about the actual Medicare reimbursement rates, 36 percent of patients stated that surgeon compensation for meniscectomy was somewhat low and 29 percent said it was very low. On average, patients reported that surgeons should be reimbursed $2,719 for meniscectomies.

Similarly, 30 percent of patients said that reimbursement for ACL reconstruction was somewhat low and 27 percent stated that it was very low. Patients told researchers that surgeons should be reimbursed $4,885 for the knee surgery.

In light of low Medicare reimbursement rates, most patients (90 percent) also stated that surgeons are not overpaid and surgeon compensation should not be cut to lower overall healthcare costs.

While many value-based care models tie payment to patient outcomes to decrease healthcare costs, about 61 percent of patients agreed that outcome-based reimbursement structures were not appropriate for surgeon compensation.

Instead, nearly 80 percent of patients stated that healthcare costs could be lowered by reducing reimbursement to drug and medical device companies. Another 12 percent of respondents said that hospital reimbursement should be decreased and only two percent said that surgeon reimbursement should be reduced.

Some patients actually stated that orthopedic surgeon compensation should be increased. A majority of patients (82 percent) felt that orthopedic sub-specialization was important and three-quarters of respondents agreed that orthopedic surgeons should be paid extra compensation for additional training.

The survey found that patients believed orthopedic surgeons should be reimbursed an additional $1,478 per procedure as compensation for specialty training.

“The current findings suggest that patients believe that the extra financial burden assumed by surgeons to increase clinical skill should result in compensation at a higher level,” the study stated.

Researchers noted that the study’s findings show that patients place a higher value on certain medical services than what is reimbursed to providers. Healthcare stakeholders should account for these patient perceptions when implementing payment reform models, especially if research indicates that patients are willing to pay more out-of-pocket for specific procedures.

Even though the Orthopedics study found that some patients would pay more for knee surgeries, many providers may be skeptical about increasing patient financial responsibilities.

Almost three-quarters of providers reported a boost in patient financial responsibility in 2015, according to an InstaMed report from June. However, a cited McKinsey & Company study found that providers only expect to collect 50 to 70 percent of a patient’s balance after a visit, and 70 percent said that it takes at least a month to collect payments from patients.

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