Variation in hospital costs and reimbursement for endovascular aneurysm repair

A Vascular Quality Initiative pilot project

Gary Lemmon, Dan Neal, Randall R. DeMartino, Joseph R. Schneider, Tej Singh, Larry Kraiss, Salvatore Scali, Apostolos Tassiopoulos, Andrew Hoel, Jack L. Cronenwett

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

Objective: Comparing costs between centers is difficult because of the heterogeneity of vascular procedures contained in broad diagnosis-related group (DRG) billing categories. The purpose of this pilot project was to develop a mechanism to merge Vascular Quality Initiative (VQI) clinical data with hospital billing data to allow more accurate cost and reimbursement comparison for endovascular aneurysm repair (EVAR) procedures across centers. Methods: Eighteen VQI centers volunteered to submit UB04 billing data for 782 primary, elective infrarenal EVAR procedures performed by 108 surgeons in 2014. Procedures were categorized as standard or complex (with femoral-femoral bypass or additional arterial treatment) and without or with complications (arterial injury or embolectomy; bowel or leg ischemia; wound infection; reoperation; or cardiac, pulmonary, or renal complications), yielding four clinical groups for comparison. MedAssets, Inc, using cost to charge ratios, calculated total hospital costs and cost categories. Cost variation analyzed across centers was compared with DRG 237 (with major complication or comorbidity) and 238 (without major complication or comorbidity) coding. A multivariable model to predict DRG 237 coding was developed using VQI clinical data. Results: Of the 782 EVAR procedures, 56% were standard and 15% had complications, with wide variation between centers. Mean total costs ranged from $31,100 for standard EVAR without complications to $47,400 for complex EVAR with complications and varied twofold to threefold among centers. Implant costs for standard EVAR without complications varied from $8100 to $28,200 across centers. Average Medicare reimbursement was less than total cost except for standard EVAR without complications. Only 9% of all procedures with complications in the VQI were reported in the higher reimbursed DRG 237 category (center range, 0%-21%). There was significant variation in hospitals' coding of DRG 237 compared with their expected rates. VQI clinical data accurately predict current DRG coding (C statistic, 0.87). Conclusions: VQI data allow a more precise EVAR cost comparison by identifying comparable clinical groups compared with DRG-based calculations. Total costs exceeded Medicare reimbursement, especially for patients with complications, although this varied by center. Implant costs also varied more than expected between centers for comparable cases. Incorporation of VQI data elements documenting EVAR case complexity into billing data may allow centers to better align respective DRG reimbursement to total costs.

Original languageEnglish (US)
JournalJournal of Vascular Surgery
DOIs
StateAccepted/In press - Nov 8 2016

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Hospital Costs
Aneurysm
Blood Vessels
Diagnosis-Related Groups
Costs and Cost Analysis
Medicare
Thigh
Comorbidity
Embolectomy
Wound Infection
Reoperation
Leg
Ischemia

ASJC Scopus subject areas

  • Surgery
  • Cardiology and Cardiovascular Medicine

Cite this

Variation in hospital costs and reimbursement for endovascular aneurysm repair : A Vascular Quality Initiative pilot project. / Lemmon, Gary; Neal, Dan; DeMartino, Randall R.; Schneider, Joseph R.; Singh, Tej; Kraiss, Larry; Scali, Salvatore; Tassiopoulos, Apostolos; Hoel, Andrew; Cronenwett, Jack L.

In: Journal of Vascular Surgery, 08.11.2016.

Research output: Contribution to journalArticle

Lemmon, Gary ; Neal, Dan ; DeMartino, Randall R. ; Schneider, Joseph R. ; Singh, Tej ; Kraiss, Larry ; Scali, Salvatore ; Tassiopoulos, Apostolos ; Hoel, Andrew ; Cronenwett, Jack L. / Variation in hospital costs and reimbursement for endovascular aneurysm repair : A Vascular Quality Initiative pilot project. In: Journal of Vascular Surgery. 2016.
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abstract = "Objective: Comparing costs between centers is difficult because of the heterogeneity of vascular procedures contained in broad diagnosis-related group (DRG) billing categories. The purpose of this pilot project was to develop a mechanism to merge Vascular Quality Initiative (VQI) clinical data with hospital billing data to allow more accurate cost and reimbursement comparison for endovascular aneurysm repair (EVAR) procedures across centers. Methods: Eighteen VQI centers volunteered to submit UB04 billing data for 782 primary, elective infrarenal EVAR procedures performed by 108 surgeons in 2014. Procedures were categorized as standard or complex (with femoral-femoral bypass or additional arterial treatment) and without or with complications (arterial injury or embolectomy; bowel or leg ischemia; wound infection; reoperation; or cardiac, pulmonary, or renal complications), yielding four clinical groups for comparison. MedAssets, Inc, using cost to charge ratios, calculated total hospital costs and cost categories. Cost variation analyzed across centers was compared with DRG 237 (with major complication or comorbidity) and 238 (without major complication or comorbidity) coding. A multivariable model to predict DRG 237 coding was developed using VQI clinical data. Results: Of the 782 EVAR procedures, 56{\%} were standard and 15{\%} had complications, with wide variation between centers. Mean total costs ranged from $31,100 for standard EVAR without complications to $47,400 for complex EVAR with complications and varied twofold to threefold among centers. Implant costs for standard EVAR without complications varied from $8100 to $28,200 across centers. Average Medicare reimbursement was less than total cost except for standard EVAR without complications. Only 9{\%} of all procedures with complications in the VQI were reported in the higher reimbursed DRG 237 category (center range, 0{\%}-21{\%}). There was significant variation in hospitals' coding of DRG 237 compared with their expected rates. VQI clinical data accurately predict current DRG coding (C statistic, 0.87). Conclusions: VQI data allow a more precise EVAR cost comparison by identifying comparable clinical groups compared with DRG-based calculations. Total costs exceeded Medicare reimbursement, especially for patients with complications, although this varied by center. Implant costs also varied more than expected between centers for comparable cases. Incorporation of VQI data elements documenting EVAR case complexity into billing data may allow centers to better align respective DRG reimbursement to total costs.",
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AU - Lemmon, Gary

AU - Neal, Dan

AU - DeMartino, Randall R.

AU - Schneider, Joseph R.

AU - Singh, Tej

AU - Kraiss, Larry

AU - Scali, Salvatore

AU - Tassiopoulos, Apostolos

AU - Hoel, Andrew

AU - Cronenwett, Jack L.

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N2 - Objective: Comparing costs between centers is difficult because of the heterogeneity of vascular procedures contained in broad diagnosis-related group (DRG) billing categories. The purpose of this pilot project was to develop a mechanism to merge Vascular Quality Initiative (VQI) clinical data with hospital billing data to allow more accurate cost and reimbursement comparison for endovascular aneurysm repair (EVAR) procedures across centers. Methods: Eighteen VQI centers volunteered to submit UB04 billing data for 782 primary, elective infrarenal EVAR procedures performed by 108 surgeons in 2014. Procedures were categorized as standard or complex (with femoral-femoral bypass or additional arterial treatment) and without or with complications (arterial injury or embolectomy; bowel or leg ischemia; wound infection; reoperation; or cardiac, pulmonary, or renal complications), yielding four clinical groups for comparison. MedAssets, Inc, using cost to charge ratios, calculated total hospital costs and cost categories. Cost variation analyzed across centers was compared with DRG 237 (with major complication or comorbidity) and 238 (without major complication or comorbidity) coding. A multivariable model to predict DRG 237 coding was developed using VQI clinical data. Results: Of the 782 EVAR procedures, 56% were standard and 15% had complications, with wide variation between centers. Mean total costs ranged from $31,100 for standard EVAR without complications to $47,400 for complex EVAR with complications and varied twofold to threefold among centers. Implant costs for standard EVAR without complications varied from $8100 to $28,200 across centers. Average Medicare reimbursement was less than total cost except for standard EVAR without complications. Only 9% of all procedures with complications in the VQI were reported in the higher reimbursed DRG 237 category (center range, 0%-21%). There was significant variation in hospitals' coding of DRG 237 compared with their expected rates. VQI clinical data accurately predict current DRG coding (C statistic, 0.87). Conclusions: VQI data allow a more precise EVAR cost comparison by identifying comparable clinical groups compared with DRG-based calculations. Total costs exceeded Medicare reimbursement, especially for patients with complications, although this varied by center. Implant costs also varied more than expected between centers for comparable cases. Incorporation of VQI data elements documenting EVAR case complexity into billing data may allow centers to better align respective DRG reimbursement to total costs.

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