Current hospital costs and medicare reimbursement for endovascular abdominal aortic aneurysm repair

Abstract

Objective: The purpose of this study was to analyze the current inpatient hospital cost and Medicare reimbursement of endovascular abdominal aortic aneurysm repair (EVAR) at different hospitals.

Methods: The cost of EVAR from October 2000 to October 2001 with two commercially available endografts (Ancure, Guidant Endovascular Solutions, Menlo Park, Calif; and AneuRx, Medtronic AVE, Santa Rosa, Calif) was retrospectively analyzed at seven hospitals. Three university (n = 111) and four community hospitals (n = 110) from different regions of the country participated in the survey. Consecutive cases with complete financial records were included. Hospital finance departments provided their best estimates of hospital costs, including overhead for operating room, endograft, medical supply, bed, radiology, laboratory, and pharmacy services and reimbursement on the basis of hospital-specific Diagnostic Related Groups (DRG) 110 or 111. Detailed hospital charges and International Clinical Diagnosis codes also were reviewed from Universal Billing-92 forms submitted to Medicare. An additional cost analysis was performed by the authors to validate the estimates of the hospital financial departments. Outliers of more than three standard deviations from the mean were excluded.

Results: The mean total hospital cost was $22,999, and mean reimbursement, weighted by case mix, was $20,837, resulting in a net loss of $2162. The majority of EVAR cost was from the device (57%) and other medical supplies (16%). EVAR was reimbursed on the basis of DRG 110 in 78% of cases and of DRG 111 in 22%. Reimbursement varied widely by hospital and location (mean, $20,837; range, $14,818 to $35,343; standard deviation, $5450). With the exclusion of one hospital where reimbursement was not based on the DRG, cases reimbursed with DRG 110 resulted in an average loss of $2200, while the average loss was $9198 with DRG 111. The mean net loss for hospitals reimbursed with the DRG system was $3898.

Conclusion: EVAR reimbursement is presently inadequate to cover hospital expenses. Substantial financial losses occurred at four of the participating centers. University hospitals fared surprisingly better because of higher reimbursement.