Medicare hospital outpatient services and costs: implications for prospective payment

Health Care Financing Review, Winter, 1992 by Mark E. Miller, Margaret B. Sulvetta

[TABULAR DATA OMITTED]

Table 3 summarizes the percentage of all claims and charges accounted for by the 40 most frequently provided services. These 40 services account for 46 percent of all charges and 53 percent of all claims. Surgery procedures among these 40 services account for 13 percent of all HOPD charges, with only 3 percent of all claims. Radiology procedures account for the second-greatest proportion of charges (20 percent), with 19 percent of claims.

                   Table 3
     Percentage of all hospital outpatient
  department claims and charges accounted for,
      by the 40 most frequently provided
               procedures: 1987

Category               Claims         Charges
                              Percent
Total                    53             46
Surgery                   3             13
Radiology                19             20
Pathology-laboratory     11              4
Medicine                 20              9

SOURCES: Health Care Financing Administration: Hospital
Outpatient Bill
file and Part B Medicare Annual Data file, both 1987;
data development by
the Urban Institute.

Table 4 examines the 40 highest volume procedures in greater detail. The single most frequently provided Medicare service in the HOPD is mammography (HCPCS 76091), which accounts for 4.93 percent of all claims, 2.28 percent of all charges, and has an average charge of $74.86. The five services with the highest volume are two radiology (mammography and chest X-ray) procedures, two routine visits (established patient, limited and intermediate service) and one emergency department visit (new patient, limited service). These five procedures together account for 17.99 percent of claims and 7.55 percent of charges. The average charges for the 40 high-volume procedures range from a low of $17.76 (HCPCS 85610, prothrombin test) to a high of $1,691.46 (HCPCS 66984, one-stage cataract removal and lens insertion).

The three high-volume surgery procedures (two endoscopic procedures and a cataract procedure) account for few claims (2.46 percent) but a large percentage of all charges (12.76 percent). One cataract surgery procedure (HCPCS 66984) alone accounts for 10.24 percent of all HOPD charges, with 0.98 percent of claims. Thirteen high-volume radiology procedures (computerized axial tomography [CAT] scans, routine chest X-rays, gastrointestinal radiology examinations, mammography, bone imaging, and therapeutic radiation treatments) account for 18.89 percent of all claims and 19.83 percent of all charges. Ten high-volume laboratory-pathology procedures (automated multichannel tests, urinalysis, various blood tests and counts, prothrombin tests, Pap smears, and surgical pathology) account for about 10.62 percent of claims but only 3.74 percent of charges. Fourteen high-volume medicine procedures (routine visits, emergency department visits, and electrocardiograms) account for 19.93 percent of all claims and 9.01 percent of all charges.

We also examined the 40 most frequently provided services within each of the four HCPCS categories. As shown in Table 5, the 40 highest volume surgery procedures account for 8 percent of all HOPD claims and 20 percent of all HOPD charges. Within the surgery category, these 40 surgery procedures account for 72 percent of surgery claims and 75 percent of surgery charges. The 40 highest volume surgery procedures are dominated by cataract-lens procedures, other eye procedures, and endoscopic procedures. Cataract-lens procedures and other eye procedures account for 22 percent of surgery claims and 48 percent of surgery charges. Frequently provided endoscopy procedures account for about 27 percent of surgery claims and 18 percent of surgery charges.