The value of your time: Evaluation of effects of changes in Medicare reimbursement rates on the practice of urology

Purpose: Several reforms to Medicare have changed the reimbursement of physicians from payment based on usual, customary or reasonable charges to a resource based relative value scale. We studied the effect of these changes on hourly reimbursement rates for various services provided by urologists. Materials and Methods: We used a previously published national survey of urologists who provided information regarding physician time and work required before, during and after most frequently performed urological services, including during the global period. For comparison mean operative times during the last year at our private hospital for several common urological procedures were obtained. Medicare reimbursement rates for common urological procedures and evaluation and management (E&M) codes for 1995, 1999 and 2004 were acquired from our department's billing office and used to calculate reimbursement rate per hour. Results: There was a steady increase in reimbursement for outpatient services and a decrease in reimbursement for surgical procedures. For E&M codes the reimbursement rates per hour for 2004 represent a mean 51% increase since 1995. However, surgical procedures have had a mean decrease of 28.5% in reimbursement rates per hour. There was remarkable consistency in rates with 7 of the 9 surgical procedures losing between 25.5% and 32% in reimbursement. In 1995 outpatient E&M services were the least profitable at less than half the hourly rate of operative procedures. In 2004 office cystoscopy and transrectal ultrasound biopsy of the prostate had the highest reimbursement and, with the exception of shock wave lithotripsy, there was a minimal difference in hourly reimbursement rates between common surgical procedures and E&M services. Conclusions: Changes in Medicare reimbursement during the last decade have resulted in significant changes in rates for different urological services. The near equity in reimbursement rates for E&M and surgical services will likely have an increasingly important role in the future practice of urology.