Variation in Physician-Specific Episode Payments for Major Cancer Surgery and Implications for the Merit-Based Incentive Program

Abstract

Background: Nearly 1.5 million clinicians in the United States will be affected by Centers for Medicare and Medicaid Services' (CMS) new payment program, the Merit-based Incentive Program (MIPS), where clinicians will be penalized or rewarded based on the health care expenditures of their patients. We therefore examined expenditures for major cancer surgery to understand physician-specific variation in episode payments.

Methods: We used Surveillance, Epidemiology and End Results-Medicare data to identify patients aged 66-99 y who underwent a prostatectomy, nephrectomy, lung, or colorectal resection for cancer from 2008 to 2012. We calculated 90-d episode payments, attributed each episode to a physician, and evaluated physician-level payment variation. Next, we determined which component (index admission, readmission, physician services, postacute care, hospice) drove differences in payments. Finally, we evaluated payments by geographic region, number of comorbidities, and cancer stage.

Results: We identified 39,109 patients who underwent surgery by 1 of 7182 providers. There was wide variation in payments for each procedure (prostatectomy: $7046-$40,687; nephrectomy: $8855-$82,489; lung resection: $11,167-$223,467; colorectal resection: $9711-$199,480). The largest component difference in episode payments varied by condition: physician payments for prostatectomy (29%), postacute care for nephrectomy (38%) and colorectal resections (38%), and index hospital admission for lung resections (43%) but were fairly stable across region, comorbidity number, and cancer stage.

Conclusions: For patients undergoing major cancer surgery, 90-d episode payments vary widely across surgeons. The components driving such variation differ by condition but remain stable across region, number of comorbidities, and cancer stage. These data suggest that programs to reduce specific component payments may have advantages over those targeting individual physicians for decreasing health care expenditures.

Keywords: Cancer surgery; Cost; Merit-based Incentive Program; Payment.