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Medicare Payment For Cognitive VS Procedureal Care

Authors: Christine A. Sinsky, David C. Dugdale

Journal of the American Medical Association Internal Medicine, August 2013

Fewer physicians are choosing primary care fields at a time in which the needs of an aging population are expected to require an increase in the number of primary care doctors. The U.S. health care reimbursement system rewards procedural services while providing disincentives for physicians to spend time on cognitive services- those that involve thinking, reasoning and judgment.

The payment gap was explored by comparing the hourly revenue generated by a physician performing exclusively cognitive services to that of a physician performing a screening colonoscopy or a cataract extraction. Payment for a physician service is determined by the relative value unit (RVU), assigned by the Center for Medicare and Medicaid Services. The RVU is composed of the physician specific work, the expense to the medical practice and the expense for malpractice insurance. The actual dollar amount is determined by a conversion factor and impacted by geographic location.

The component of the RVU for the physician specific work is intended to reflect the value of the work. The work RVU for a 25-minute primary care office visit is 1.50.  The work RVU for a screening colonoscopy is 3.69. For a cataract extraction, it is 4.98.  However, procedures are often managed with bundled payments- including multiple encounters for the same procedure- bringing the work RVU for an uncomplicated cataract extraction to 8.52.

The actual hourly dollar amount is determined by estimating the amount of time the physician spends on the procedure (13.5 minutes for colonoscopy and 14 minutes for cataract extraction) and adding an additional ten minutes for patient and family interaction. Using this model, the hourly revenue for cognitive care in a primary care setting is $87. For procedural care, it is $320 for a screening colonoscopy and $423 for a cataract extraction.

The authors considered many variables in their model, and all resulted in a 3-to 5- fold greater value in physician time providing procedural care as compared to cognitive care. They concluded that this value discrepancy is a major contributor to the decline in the number of physicians choosing primary care careers and an excess of expensive procedural care.