Medicare payments for outpatient urological surgery by location of care

The cost implications associated with offloading outpatient surgery from hospitals to ambulatory surgery centers and the physician office remain poorly defined. Therefore, we determined whether payments for outpatient surgery vary by location of care.

Using national Medicare claims from 1998 to 2006, we identified elderly patients who underwent 1 of 22 common outpatient urological procedures. For each procedure we measured all relevant payments (in United States dollars) made during the 30-day claims window that encompassed the procedure date. We then categorized payment types (hospital, physician and outpatient facility). Finally, we used multivariable regression to compare price standardized payments across hospitals, ambulatory surgery centers and the physician office.

Average total payments for outpatient surgery episodes varied widely from $200 for urethral dilation in the physician office to $5,688 for hospital based shock wave lithotripsy. For all but 2 procedure groups, ambulatory surgery centers and physician offices were associated with lower overall episode payments than hospitals. For instance, average total payments for urodynamic procedures performed at ambulatory surgery centers were less than a third of those done at hospitals (p <0.001). Compared to hospitals, office based prostate biopsies were nearly 75% less costly (p <0.001). Outpatient facility payments were the biggest driver of these differences.

These data support policies that encourage the provision of outpatient surgery in less resource intensive settings.