Compensation Rates for Otolaryngologic Procedures Under the Medicare Physician Fee Schedule in 2018

Objective/Hypothesis Medicare reimbursement for physician work depends on the estimated time and intensity - which encompasses technical skill, cognitive load, and stress - required to perform services. The Centers for Medicare and Medicaid Services (CMS) quantitatively expresses intensity estimates as compensation rates per unit time. This study aimed to characterize compensation rates under the Medicare Physician Fee Schedule (PFS) for operative procedures commonly performed by otolaryngologists. Study Design This study was a retrospective, cross-sectional analysis. Methods This study was a retrospective, cross-sectional analysis of fiscal year 2018 PFS specifications and publicly available Medicare Part B utilization data for the top 100 highest-volume procedures furnished by otolaryngologists to Medicare beneficiaries in inpatient and ambulatory surgical center (ASC) settings between January 1, 2018, and December 31, 2018. Co-primary outcomes were the estimated 1) total compensation rate ($/min) and 2) intraservice (i.e., "skin-to-skin" time) compensation rate ($/min) for each included procedure. Results The analytic sample included 147 unique procedure types (settings non-mutually exclusive): 82 inpatient procedure types (n = 33,907 procedures) and 95 ASC procedure types (n = 34,765 procedures). In the inpatient setting, median total compensation rate and intraservice compensation rates were $1.50/min (interquartile range [IQR]: $1.19/min-$1.65/min) and $2.27/min (IQR: $1.69/min-$2.68/min), respectively. In the ASC setting, median total compensation rate and intraservice compensation rates were $1.48/min (interquartile range [IQR]: $1.27/min-$1.77/min) and $2.39/min (IQR: $1.82/min-$2.91/min), respectively. At the service line level, volume-weighted total (inpatient: $1.91/min, ASC: $1.90/min) and intraservice (inpatient: $3.84/min, ASC: $3.37/min) compensation rates were highest for rhinologic procedures. Conclusions Compensation rates under the Medicare PFS varied widely for operative procedures commonly performed by otolaryngologists. Level of Evidence N/A Laryngoscope, 2020