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Medicine and Public Policy |

Barriers to Office-Based Screening Sigmoidoscopy: Does Reimbursement Cover Costs?

James D. Lewis, MD, MSCE; and David A. Asch, MD, MBA
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From Philadelphia Veterans Affairs Medical Center and the University of Pennsylvania, Philadelphia, Pennsylvania.


Ann Intern Med. 1999;130(6):525-530. doi:10.7326/0003-4819-130-6-199903160-00017
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Screening with flexible sigmoidoscopy may reduce mortality rates from colorectal cancer. Primary care physicians are able to provide this screening procedure, but many have been reluctant to do so, partly because of the impression that reimbursement rates are inadequate to cover physician costs. This study examines the cost of performing flexible sigmoidoscopy in a primary care practice and compares this cost with the new Medicare reimbursement rate for flexible sigmoidoscopy. Fixed and variable costs associated with the performance of office-based flexible sigmoidoscopy were derived from the published literature. The principal assumption in the analyses is that the time required to perform flexible sigmoidoscopy represents an opportunity cost because the physician could use that time to see additional patients during routine office hours. Sensitivity analyses were done across a range of estimates for the cost variables. When Medicare reimbursement rates were used, the physician's total cost for flexible sigmoidoscopy without biopsy was $86.86, which is similar to the Medicare reimbursement rate for screening flexible sigmoidoscopy (code 45330, $87.84). The calculations were most sensitive to estimates of equipment cost, procedure time, number of procedures performed per year, additional malpractice coverage, and revenue generated per hour of outpatient care. The estimated cost per procedure in a screening program that includes the ability to perform biopsy is $152.93, which exceeds Medicare reimbursement rates across the range of all variables included in the sensitivity analyses. Thus, low reimbursement may limit the adoption of screening flexible sigmoidoscopy with or without biopsy in primary care practices.

Figures

Grahic Jump Location
Figure 1.
Relation of the number of screening flexible sigmoidoscopy procedures done to the cost of performing screening flexible sigmoidoscopy in a primary care practice.

The analysis assumes that 1) an average of 20 minutes is needed to perform flexible sigmoidoscopy, 2) office visits are reimbursed according to 1998 Medicare rates, and 3) no additional malpractice premiums are required. The horizontal line represents the current Medicare reimbursement rate for screening flexible sigmoidoscopy ($87.84).

Grahic Jump Location
Grahic Jump Location
Figure 2.
Three-way sensitivity analysis of the relation among hourly revenue from routine outpatient care, annual number of procedures performed, and time required to perform flexible sigmoidoscopy without biopsy.

The curves represent the threshold values at which the physician's cost of performing flexible sigmoidoscopy is equal to the Medicare reimbursement rate for the procedure ($87.84) at different levels of hourly revenue from routine outpatient care. The areas below the curves represent conditions under which Medicare reimbursement exceeds physician costs.

Grahic Jump Location

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