Practice Arrangement and Medicare Physician Payment in Otolaryngology

Objective Medicare Part B physician payment indicates a cost to Medicare beneficiaries for a physician service and connotes physician clinical productivity. The objective of this study was to determine whether there was an association between practice arrangement and Medicare physician payment. Study Design Cross-sectional study. Setting Medicare provider utilization and payment data. Subjects and Methods Otolaryngologists from 1 metropolitan area were included as part of a pilot study. A generalized linear model was used to determine the effect of practice-specific variables including patient volumes on physician payment. Results Of 67 otolaryngologists included, 23 (34%) provided services through an independent practice, while others were employed by 1 of 3 local academic centers. Median payment was $58,895 per physician for the year, although some physicians received substantially higher payments. Reimbursements to faculty at 1 academic department were higher than to those at other institutions or to independent practitioners. After adjustments were made for patient volumes, physician subspecialty, and gender, payments to each faculty at Hospital C were 2 times higher than to those at Hospital A (relative ratio [RR] 2.03; 95% CI, 1.27-3.27; P = .003); 2 times higher than to faculty at Hospital B (RR 2.04; 95% CI, 1.4-2.7; P = .0001); and 1.6 times higher than to independent practitioners (RR 1.6; 95% CI, 1.04-2.7; P = .03). Payments to physicians in the other groups were not significantly different. Differences in reimbursement corresponded to an emphasis on procedures over office visits but not Medicare case mix adjustments for patient discharges from associated institutions. Conclusions Variation in the cost of academic otolaryngology care may be subject in part to institutional factors.