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DRG, costs and reimbursement following Roux-en-Y gastric bypass: an economic appraisal
L D George Angus1, Daniel R Cottam, Piotr J Gorecki
1Nassau University Medical Center, Department of Surgery, East Meadow, NY, USA. langus@numc.edu
Insights
Physician reimbursement for bariatric surgery is significantly lower for publicly insured patients compared to privately insured patients. This disparity creates financial disincentives for surgeons treating public patients, impacting healthcare equity.
Area of Science:
- Bariatric Surgery Outcomes
- Healthcare Economics
- Surgical Reimbursement Models
Background:
- Discrepancies exist in hospital and physician reimbursement when Diagnosis Related Group (DRG) codes are utilized.
- Reimbursement structures differ significantly based on insurance type, specifically per diem Health Maintenance Organization (HMO) versus public insurance.
Purpose of the Study:
- To analyze and compare hospital and surgeon reimbursement rates for Roux-en-Y gastric bypass (RYGBP) procedures based on insurance status (public vs. private).
- To evaluate the financial implications of DRG-based reimbursement for bariatric surgery in a single institution.
Main Methods:
- Retrospective analysis of 133 patients (59 privately-insured, 74 publicly-insured) undergoing RYGBP.
- Comparison of surgeon and hospital reimbursement, complications, length of stay, and blood loss between insurance groups using DRG 288.
- Evaluation of reimbursement rates against inpatient hospital costs for open and laparoscopic RYGBP.
Main Results:
- Physician reimbursement was substantially higher for privately-insured patients ($2356 ± $822) compared to publicly-insured patients ($931 ± $73) (P<0.001).
- Hospital reimbursement also showed significant differences: private ($4435 ± $3106) versus public ($11773 ± $4462) (P<0.001).
- Estimated costs for open RYGBP ($3179) were lower than laparoscopic RYGBP ($4180), while the HMO per diem rate was $1000/day.
Conclusions:
- A financial disincentive exists for surgeons treating publicly-insured patients, while hospitals are incentivized to treat them.
- The converse is true for privately-insured patients, creating a dichotomy in treatment incentives.
- This reimbursement disparity may hinder the development of new bariatric centers and increase pressure on surgeons to perform less costly open procedures.
Background:
There is disagreement regarding hospital and physician reimbursement fees when DRG codes are used. We have found that physicians and hospitals are rewarded differently depending on the type of insurance coverage - per diem HMO (Health Maintenance Organization) vs public.
Methods:
133 patients were retrospectively analyzed in a single institution. There were 59 privately-insured and 74 publicly-insured patients. Using DRG 288, hospital and surgeon reimbursement rates, complications, length of stay, blood loss and basic demographics were evaluated on all patients. Reimbursement rates were then compared to inpatient hospital costs per case for both open and laparoscopic Roux-en-Y gastric bypass (RYGBP). Statistical analysis used Student's t-test and standard deviation.
Results:
The 2 groups were similar in terms of age, sex and BMI. There was a large difference in physician reimbursement when comparing public to private insurance (931 US dollars +/-73 vs 2356 US dollars +/-822, P<0.001). Likewise, there was a large difference in hospital reimbursement (public 11773 US dollars +/- 4462 vs private 4435 US dollars +/- 3106, P<0.001). The estimated costs for open gastric bypass was 3179 US dollars vs 4180 US dollars for the laparoscopic bypass. The HMO per diem rate was 1000 US dollars per day.
Conclusion:
There is a relative disincentive for surgeons to treat publicly-insured patients, while there is an incentive for hospitals to treat those patients. The converse is true for the privately-insured patients. This dichotomy will impede the development of new centers and place greater burden on bariatric surgeons to reduce cost by performing the open RYGBP.