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

Many US health care institutions have adopted compensation models based on work relative value units (wRVUs) to standardize payments and incentivize providers. Among other factors, a major determinant of payment and wRVU assignments is operative time. Our objective was to determine whether differences in estimated operative times between the Centers for Medicare & Medicaid Services (CMS) and the National Surgical Quality Improvement Program (NSQIP) contribute to payment and wRVU misvaluation for the most common hospital-based hand and upper extremity procedures.

Data on wRVUs, surgeon payment, and estimated operative times were collected from CMS for 53 procedures. We used regression models to compare relationships between these variables, in addition to actual median operative times as reported in the NSQIP database, from 2011 to 2016. We then determined the relative valuation of each procedure based on operative time.

There was a wide discrepancy between CMS and NSQIP operative times (R²=0.49), with 60% of CMS times being longer than NSQIP times. Payment correlated more strongly with CMS operative times (R²=0.55) than with NSQIP operative times (R²=0.24). Similarly, wRVUs more strongly correlated with CMS operative times (R²=0.84) than with NSQIP operative times (R2=0.51). In general, for trauma-related procedures, any distal radius open reduction internal fixation (ORIF) had the highest valuation while any ORIF proximal to the distal radius had lower valuation in analysis of both databases. While 61% of trauma procedures were highly valued, 70% of elective procedures had a low valuation, including nearly all elective tendon procedures. Notable compensation differences were found between trapeziectomy versus ligament reconstruction and tendon interposition, epicondyle debridement with tendon repair versus denervation, proximal row carpectomy versus four corner fusion, and distal radius open versus percutaneous fixation.

CMS may misvalue payment and wRVU rates of hospital-based hand procedures due to inaccurate operative time estimates. By identifying which procedures are misvalued in terms of payment and wRVU per operative time, providers and payors may be able to address these imbalances and maximize appropriate care delivery incentives.Level of Evidence: III.