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Study Finds No Pattern of Cost, Quality Difference Across Outpatient Surgery Settings

By CQ Staff

October 27, 2006 -- How accurate are the rates Medicare pays for surgery outside the hospital? With a hospital stay no longer required for so many different types of surgery, patients often can get the same type of procedure in an outpatient department, an ambulatory surgery center, or a doctor's office.

But Medicare pays different rates depending on where the procedure is performed, and with so many more procedures shifting to outpatient settings, Medicare's advisers increasingly worry about the degree to which those payment differences make sense.

To get a better idea of whether there are differences tied to the site of care that should be taken into account in setting payment rates, the Medicare Payment Advisory Commission (MedPAC) hired the RAND Corporation to poke through Medicare claims data.

RAND based its conclusion on an examination of colonoscopies, cataract surgery, and magnetic resonance imaging of the head and neck: "No single setting had consistently higher rates of characteristics that might increase the cost of the procedure."

Thus when taking all three types of surgery into account, no one type of site had consistently more medically complex patients, for example.

RAND also found that "rates of adverse outcomes were very low in all settings," adding that to the extent differences were statistically significant, those differences were small.

"Because the study examined only three procedures, it is difficult to draw general conclusions," MedPAC concluded. "Nevertheless, this study demonstrates that claims data can be used to evaluate differences among sites of care and is thus an important step in addressing whether payment variations among settings are appropriate," it said.

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