Misvaluation of Hospital-Based Upper Extremity Surgery Across Payment, Relative Value Units, and Operative Time

Area of Science:

• Health Economics
• Surgical Outcomes Research
• Medical Payment Systems

Background:

• US healthcare institutions utilize work relative value units (wRVUs) for standardized payments and provider incentives.
• Operative time is a key factor influencing payment and wRVU allocation in compensation models.
• Discrepancies in operative time estimates may lead to misvaluation of surgical procedures.

Purpose of the Study:

• To compare estimated operative times between CMS and NSQIP for common hand and upper extremity procedures.
• To assess the impact of these time differences on payment and wRVU misvaluation.
• To identify specific procedures that may be over or undervalued based on operative time.

Main Methods:

• Collected data on wRVUs, surgeon payment, and estimated operative times from CMS for 53 procedures.
• Utilized regression models to compare CMS operative times with actual median operative times from the NSQIP database (2011-2016).
• Determined the relative valuation of procedures based on operative time discrepancies.

Main Results:

• Significant discrepancies observed between CMS and NSQIP operative times (R²=0.49), with CMS times being longer in 60% of cases.
• Payment and wRVUs showed stronger correlations with CMS operative times (R²=0.55 and R²=0.84, respectively) than NSQIP times (R²=0.24 and R²=0.51).
• Trauma procedures, particularly distal radius ORIF, were generally highly valued, while most elective procedures, including tendon surgeries, were undervalued.

Conclusions:

• CMS may misvalue hospital-based hand procedures due to inaccurate operative time estimates.
• Identifying misvalued procedures can help address payment and wRVU imbalances.
• Accurate operative time data is crucial for appropriate incentive structures and care delivery.