Changes in Commercial Payments Following Ventral Hernia Billing Reform

Area of Science:

• Health economics
• Surgical reimbursement policy
• Healthcare policy analysis

Background:

• In January 2023, the US Centers for Medicare & Medicaid Services (CMS) enacted significant reimbursement policy reforms for abdominal wall hernia repairs, notably removing postoperative global periods.
• These reforms have potential implications for healthcare spending, with similar policy changes proposed for other common surgical procedures.
• The precise impact of this policy reform on overall healthcare expenditures remained unclear prior to this study.

Purpose of the Study:

• To assess the association between the 2023 CMS reimbursement policy reform for ventral hernia repair and subsequent changes in episode-level spending.
• To quantify the impact of the policy change on professional and facility reimbursements, as well as patient out-of-pocket costs.

Main Methods:

• A retrospective cohort study utilizing US national insurance claims data from Merative MarketScan (January 2022 - October 2023).
• Analysis included commercially insured adult patients undergoing ventral or inguinal hernia repair, with inguinal hernia repair serving as a control group.
• A difference-in-differences approach was employed to evaluate changes in spending attributed to the January 2023 policy reform.

Main Results:

• Per-episode spending for ventral hernia repair decreased by $492 (7% relative reduction) compared to inguinal hernia repair post-policy reform.
• Professional reimbursements saw a significant decrease of $198 (20% relative reduction), while facility reimbursements showed a relative decrease of 4.6% ($260).
• Patient out-of-pocket costs decreased by $83 (10% relative reduction), and there was no significant increase in component separation procedures.

Conclusions:

• The January 2023 CMS reimbursement policy reform for ventral hernia repair was associated with a decrease in total episode spending, primarily driven by reductions in professional fees.
• The findings suggest that policy reforms impacting surgical reimbursement can influence healthcare spending and patient financial responsibility.
• Given ongoing CMS reimbursement adjustments for various surgical procedures, the effects on surgeon practices and patient costs warrant continued monitoring and consideration.