Opportunity Cost of Vitreoretinal Surgeries

Abstract

Purpose: To compare physician reimbursements for vitreoretinal surgeries with office-based patient care. Methods: A theoretical model was performed comparing physician work reimbursements for the 10 most common vitreoretinal surgeries with office-based work relative value units (wRVUs) that could have been generated during the same global time period. The reference physician was modeled at 40 patients per 8-hour workday. A lower volume physician and higher volume physician were modeled at 30 patients/day and 50 patients/day, respectively. The reimbursement rates and allocated times for surgery were based on the 2021 values set by Medicare, and the average wRVU per office visit was based on 2021 real-world data from the Vestrum Retinal Healthcare Database. Results: In the reference case, performing any of the 10 most common vitreoretinal surgeries was associated with an opportunity cost with a weighted mean of 49% (range, 40%-68%) relative to lost office productivity. The Centers for Medicare & Medicaid Services (CMS) allocated a weighted mean intraservice time of 73 minutes; however, the reference physician would have to complete the surgery with a weighted average of 5 minutes (range, -31-12 minutes) for surgical wRVUs to equal office-based reimbursements. Performing these 10 surgeries was associated with a 25% opportunity cost even for the lower volume physician and 61% for the higher volume physician. Probability sensitivity analysis with a range of conditions identified opportunity costs from surgery in over 99% of simulated scenarios. Conclusions: Medicare reimbursements for the physician work component of vitreoretinal surgeries represented a significant opportunity cost for the physician relative to office-based patient care of equivalent time, especially for busier physicians. The model did not explore practice overhead and professional liability insurance, which are factored separately by CMS and may influence the opportunity cost depending on utilization. The average threshold surgery times for surgical reimbursements to equal office-based reimbursements may be difficult to achieve.

Keywords: Centers for Medicare & Medicaid Services; clinic; opportunity cost; reimbursement; vitreoretinal surgery.

Figure 1.

Comparison of vitreoretinal surgery reimbursement with potential office-based reimbursements. The weighted average of surgical reimbursements in wRVUs was less than potential wRVUs that could have been generated in the office during the equivalent time in the 90-day global period by the reference physician as well as a lower volume physician and higher volume physician. For each CPT code, the Medicare reimbursements were less than the potential office-based reimbursements that could have been generated in the global period. Abbreviations: CMS, Centers for Medicare & Medicaid Services; CPT, Current Procedural Terminology; wRVUs, work relative value units; pts/d, patients per day.

Figure 2.

Opportunity cost of surgery. There was a significant opportunity cost (expressed as percentage of potential office-based productivity) for the physician performing the (A) weighted average of the 10 most common vitreoretinal surgeries and (B) for each individual surgery by CPT code for all modeled physicians. Abbreviations: CPT, Current Procedural Terminology; pts/d, patients per day.

Figure 3.

Threshold surgical times. Medicare-allocated intraservice times were greater than (A) the modeled weighted average threshold times for surgical reimbursements to equal clinic reimbursements for the 10 most common surgeries and (B) for each individual CPT code. Abbreviations: CMS, Centers for Medicare & Medicaid Services; CPT, Current Procedural Terminology; pts/d, patients per day.

Figure 4.

Average wRVU and clinic reimbursements. (A) The relationship between the number of patients per day and the potential clinic wRVU that could have been generated depending on the physician’s productivity per clinical visit. (B) The opportunity cost of surgery relative to clinic reimbursements. (C) The threshold surgery (ie, intraservice) times to neutralize the opportunity cost between surgical and clinical productivity. Abbreviation: wRVU, work relative value unit.