The effect of changes in Medicare reimbursement on the practice of office and hospital-based endoscopic surgery for bladder cancer

Background: Procedures performed in the office offer potential cost savings. Recent analyses suggest, however, that a fee-for-service system may incentivize subscale operations and, thus, contribute to excessive spending. The authors of this report sought to characterize changes in the practice of office-based and hospital-based endoscopic bladder surgery after 2005 increases in Medicare reimbursement.

Methods: All office and hospital-based endoscopic surgeries that were performed in a faculty practice from 2002 through 2007 were identified using billing codes for procedures, diagnoses, and procedure locations and then analyzed using the chi-square test and logistic regression. Costs were estimated based on published Medicare reimbursements for office and hospital-based surgeries.

Results: In total, 1341 endoscopic bladder surgeries were performed, including 764 in the office and 577 in the hospital. After 2005, the odds ratio (OR) for office surgery occurring among all cystoscopies and for surgery occurring in the office versus the hospital was 2.01 (95% confidence interval [CI], 1.71-2.37) and 2.29 (95% CI, 1.83-2.87), respectively. Among all treated lesions that were associated with a diagnosis of bladder cancer and nonbladder cancer, the OR for a procedure occurring in the office versus the hospital was 1.36 (95% CI, 1.07-1.73) and 1.99 (95% CI, 1.52-2.60), respectively. The likelihood of repeat surgery on the same lesion increased after 2005 (OR, 2.86; 95% CI, 1.46-5.62), and the likelihood of an office surgery leading to a bladder cancer diagnosis at the next visit declined (OR, 0.29; 95% CI, 0.16-0.51). The overall estimated expenditure increased by 50%.

Conclusions: After 2005, more bladder lesions were identified and treated in the office. In a single group practice, office treatment of bladder cancer did not fully explain this new practice pattern, suggesting a lowered threshold for office intervention.