Corresponding author Santosh J. Agarwal, BPharm, MS Phone: (508)

Transcription

1 The Impact of Minimally Invasive Surgery On Complex DRG Assignments Santosh J. Agarwal, BPharm, MS, Covidien, Mansfield, MA; Gary V. Delhougne, JD, MHA, Covidien, Boulder, CO; Levi Citrin, JD, Numerof & Associates Inc., St. Louis, MO; Jill E. Sackman, DVM, PhD, Numerof & Associates Inc.; and Anthony J. Senagore, MD, MS, MBA, Department of Surgery, Keck School of Medicine of University of Southern California, Los Angeles, CA. ABSTRACT Purpose: Minimally invasive surgery is associated with improved clinical outcomes and reduced costs. We hypothesize that in patients with similar preoperative characteristics, hysterectomy, colectomy, and thoracic resection performed via minimally invasive surgery (MIS) approach would be associated with fewer complex Diagnosis Related Group (cdrg) assignments and subsequently result in reimbursement savings. Methodology: Premier hospital database was used to examine inpatient discharges of open and MIS colectomy, hysterectomy and thoracic resection. Open and MIS groups were matched based on propensity score. Corresponding author Santosh J. Agarwal, BPharm, MS Phone: (508) Funding source: This research project was sponsored by Covidien, a global company that manufactures, distributes, and provides services for a diverse range of medical devices and supplies. Disclosure statement: Santosh Agarwal and Gary Delhougne are employees of, and hold stock in, Covidien, a medical device and supplies manufacturer. Jill Sackman and Levi Citrin report being paid by Covidien to provide editorial services. Anthony Senagore reports no disclosures. Descriptive statistics and regression analysis were used to assess the impact of MIS on cdrg assignment. Potential reimbursement savings to the U.S. health care system, assuming a 10% increase in MIS utilization, was estimated using Medicare s Fiscal Year (FY) 2013 national average reimbursement data and Premier s procedure volume projections. Results: Compared with open surgery, the MIS group had a statistically significantly lower percentage of cdrg assignment (colectomy, 57% vs. 71%; hysterectomy, 15% vs. 19%; thoracic resection, 62% vs. 70%; P<.001 for each). Open surgery, when compared to MIS, increased the odds of cdrg assignment by 67% (odds ratio [OR], 1.67; 95% confidence interval [CI], ). We estimated that a 10% increase in MIS utilization would lead to annual payer reimbursement savings of about $24.4 million (colectomy, $17 million; hysterectomy, $5 million; thoracic resection, $2.4 million). Conclusion: Health care reform laws and economic pressures are causing a shift in focus from volume-based to value-based care. MIS approaches reduce payer expense based on fewer expensive cdrg assignments. Further adoption of MIS may lead to improved outcomes and additional savings. INTRODUCTION Adoption of minimally invasive surgery (MIS) has advanced rapidly in the past 2 decades. Minimally invasive procedures offer patients reduced pain and scarring, shorter hospitalization, and a quicker return to activities of daily living. Studies demonstrate that MIS is frequently associated with reduced rates of complications, mortality, and morbidity (Tiwari 2011, Bilimoria 2008, Delaney 2008, Kiran 2010, Varela 2008, Chalermchockchareonkit 2012, Cheng 2007, Cho 2011, Howington 2012, Murthy 2012, Sawada 2008, Villamizar 2009, Epstein 2013). The data also suggest that MIS is associated with cost benefits, likely due to reduced length of stay (LOS) and fewer complications (Varela 2008, Cho 2011, Swanson 2011, Casali 2009, Alkhamesi 2011, Eisenberg 2010, Jensen 2012, Senagore 2002, Noblett 2007, Vaid 2012, Bosio 2007, Barnett 2010, Bijen 2009, Lenihan 2004). The potential net result of replacing open procedures with MIS is that both the payer and the provider could see improved outcomes and a more favorable cost structure. The comparison of several types of hysterectomy demonstrates the improved outcomes offered by laparoscopy (ACOG 2009, Sarmini 2005). Laparoscopic hysterectomy is associated with less postoperative pain, lower stress levels, and better cosmetic results than abdominal hysterectomy (Olsson 1996). In their 2005 meta-analysis of 27 randomized controlled trials comparing laparoscopic-assisted vaginal hysterectomy (LAVH), total laparoscopic hysterectomy (TLH), and abdominal hysterectomy for benign uterine disease, the Cochrane Collaboration found a significant advantage of laparoscopy over open procedures MARCH 2014 / MANAGED CARE 47

2 (Nieboer 2009). Laparoscopic hysterectomy led to fewer wounds or abdominal wall infections, less pain, less pyrexia, a smaller drop in hemoglobin, shorter hospitalization, and a faster return to work; though operative times were longer and urinary tract injuries were more common (Lenihan 2004, Nieboer 2009, Shen 2003, Hidlebaugh 1994, Epstein 2013). Like laparoscopic procedures, video-assisted thoracoscopic procedures (VATS) have also developed rapidly in the past 2 decades. In fact, VATS has been widely adopted for use in simple thoracic operations, such as the treatment of pneumo thorax and pleural effusion (Howington 2012). VATS wedge resection has also been established as a diagnostic tool for lung cancer staging (Sihoe 2004). VATS lobectomy for lung cancer has numerous reported benefits, including earlier chest tube removal, less postoperative pain, shorter hospitalization, less inflammation, and better long-term functional level (Murthy 2012, Sawada 2008, Kaseda 2002, Swanson 2002). Similarly, meta-analyses and large randomized trials have demonstrated the safety and efficacy of laparoscopic colectomy as an alternative to open surgery in patients with conditions ranging from Crohn s disease, diverticulitis, and ulcerative colitis (UC) to colon cancer (Nash 2010, Fullum 2010, Bonjer 2007). The Clinical Outcomes of Surgical Therapy study (COST Study Group 2004) involved 48 centers and 872 patients who under went either open or laparoscopic-assisted colectomy. There was no difference in overall survival (86% for laparoscopic-assisted and 85% for open) at 3 years. The laparoscopic group demonstrated faster recovery with a shorter median hospital stay (5 vs 6 days) and lower use of postoperative narcotics. Throughout the literature, MIS tends to be associated with lower hospital costs, shorter hospitalization, a quicker return to activities of daily living, and a faster return to work compared to open procedures (Varela 2008, Swanson 2011, Casali 2009, Alkhamesi 2011, Eisenberg 2010, Jensen 2012, Senagore 2002, Noblett 2007, Vaid 2012, Bosio 2007, Barnett 2010, Bijen 2009, Hidlebaugh 1994, Epstein 2013, Fullum 2010). Most of the literature concerning MIS-associated cost benefits has focused on provider cost reduction. Few studies consider implications for payers utilizing a prospective payment program (Senagore 2005). In the United States, inpatient procedures are reimbursed based on the Medicare Severity Diagnosis Related Groups (MS-DRG) system, which provides one single reimbursement for the entire inpatient hospitalization, accounting for diagnosis and procedures performed during the hospital stay. MS-DRGs provide higher reimbursement for procedures with complications and/or comorbidities (CC) and major complications and/or comorbidities (MCC). Patients with significant comorbidities prior to the surgery or who experience complications during or after the surgery (prior to discharge) are assigned a complex DRG (cdrg). Reduction in certain postoperative complications, such as surgical site infections, translates into a higher rate of assignment of DRGs without complications and/or comorbidities, provided patients have similar preexisting comorbidities. Payers generally reimburse the provider a set amount according to a predetermined fee schedule. Procedures assigned to a cdrg are reimbursed at a higher rate on average than those assigned to the corresponding noncomplex, or base, DRG. The implications of DRG assignment for the payer are important because cdrgs typically result in a substantially increased expense. We hypothesize that when all preoperative patient and provider characteristics are similar and the only difference is the surgical approach, MIS is associated with a lower rate of postoperative complications compared to open procedures. Postoperative complications are an important predictor of cdrg assignment and, thus, cost for payers. Senagore (2005) evaluated this relationship for colectomy using data from a single institution. We conducted a retrospective cohort study using a large hospital database to demonstrate that among patients with similar preoperative characteristics but different surgical approaches (open vs a nonrobotic laparoscopic or MIS), MIS was associated with fewer cdrg assignments. Procedures such as colectomy, hysterectomy, and thoracic resection were selected because these are high-volume surgeries with a high percentage of open procedures and significant payment differentials between cdrgs and non-cdrgs. METHODS Data Source This study utilized the Premier hospital database, one of the largest administrative and resource utilization databases in the United States, covering approximately 20% of hospital discharges. The database contains more than 42 million discharges from more than 600 hospitals. Contributing hospitals send data on patient demographics; hospital, surgeon, and payer characteristics; and resource utilization, including diagnosis and procedures. Diagnoses and procedures are coded using the International Classification of Diseases, Ninth Revision Clinical Modification (ICD-9-CM) codes. All data undergo a qualityreview process for validation. Patients and Procedures All surgical discharges for adult patients (age 18 years) between the 48 MANAGED CARE / MARCH 2014

3 years 2009 and 2011 with a primary surgical procedure of either open or laparoscopic colectomy, hysterectomy, or thoracic resection were included in this analysis. Relevant discharges were identified and selected using a combination of ICD-9-CM (Appendix Table 1), Current Procedural Terminology (CPT), and billing codes. The analysis excluded cases with missing data on cost or severity, with patients who were deceased at discharge, and where robotic surgical procedures were used. The primary outcome of interest was complex MS-DRG (cdrg) code assignment (see Appendix Table 1). MS-DRG codes that ended with MCC or CC were classified as cdrg. MS- DRG was coded as a variable in the Premier hospital database. The main independent (predictor) variable was open or laparoscopic surgery. Confounders were identified from variables available in the database and were similar to variables included in previous database studies (Delaney 2008, Swanson 2011). These included patient characteristics (age, gender, race, comorbidities), hospital characteristics (geographic location, teaching, urban, number of beds), payer, procedure characteristics (elective admission, procedure including subtype, procedural approach, principal diagnosis), and surgeon specialty. Comorbidities selected were from the Charlson Comorbidity Index (CCI), which includes 17 conditions. Hypertension and obesity, two conditions not included in the CCI, were considered as relevant comorbidities and were included. Statistics Descriptive analyses using a chisquare test were performed to analyze differences between open/laparoscopy and cdrg assignment rates for the three procedures. To evaluate the impact of surgical approach on cdrg assignment, propensity score matching was conducted. Propensity score matching attempts to predict assignment to a particular group by accounting for a set of variables. We used propensity score matching to build a model of open/mis group assignment controlling for patient, provider, and payer characteristics. The open and MIS groups were then matched 1:1 based on propensity score. The procedure type (hysterectomy, colectomy, thoracic resection) was chosen for exact matching, enabling a 50:50 split of open and laparoscopic procedures. Descriptive characteristics (mean age, CCI, propensity score) were evaluated to assess the impact of matching. Thus, the propensity score matching process helped reduce the inherent systematic differences between the 2 groups. Multivariate logistic regression was performed on the matched population to assess the impact of MIS on cdrg assignment. All the confounding factors used to create the propensity score were included in the multivariate regression to account for differences that may have remained postmatching. All statistical analyses were conducted using SAS 9.2. Finally, we built a model to estimate the reimbursement impact on the U.S. health care system resulting from increased MIS utilization. We used projection weights provided by Premier to obtain national estimates of inpatient discharges. We projected the cost savings using Fiscal Year (FY) 2013 Medicare national average reimbursement rates (Appendix Table 2). A 10% increase in MIS utilization was considered an achievable yet conservative shift, considering regional variations and MIS adoption in general surgical procedures. Reimbursement rates for cdrg were based on the reimbursement rates for the corresponding MS-DRG with Complications and/or Comorbidities (CC). For hysterectomy, we averaged the base reimbursement for the noncdrgs (735, 738, 741, and 743) and the cdrgs (734, 737, 740, and 742). Reimbursement was calculated by factoring in the annual number of projected inpatient procedures in the United States, prevailing and projected share of MIS, split of cdrg for open and MIS cases, and Medicare s average national reimbursement rates for FY RESULTS During the study period, there were 292,443 hospital discharges with colectomy, hysterectomy, or thoracic resection surgery as the primary inpatient procedure. We excluded certain discharges (n=25,435) for the following reasons: involvement of patients under age 18 (n=1,324), patients being deceased in the hospital (n=3,103), lack of information on costs or severity (n=3), and the use of robot-assisted surgery (n=22,005). The three procedures accounted for 266,008 discharges (Table 1); among them, 37% of the colectomies, 23% of the hysterectomies, and 58% of the thoracic resections were performed using MIS. Raw cdrg assignment rates are presented in Table 1. For all three procedures, the MIS cohort had a lower percentage of discharges assigned to a cdrg. Logistic regression on the overall cohort before propensity matching highlighted that, after accounting for confounders, open surgery increased the odds of cdrg assignment by 74% (odds ratio [OR], 1.74; 95% confidence interval [CI], ) compared with MIS. The factors used for matching and their odds ratios predicting the use of MIS surgery are presented in Appendix Table 3. Pre- and post-matching descriptive characteristics are given in Table 2. After adjusting for all confounders, the MIS cohort had a statistically significantly lower percentage MARCH 2014 / MANAGED CARE 49

4 TABLE 1 Description of discharges with open and MIS procedures (before matching) Open cases Procedure Discharges (n) MIS (%) with cdrg (%) of cdrg assignment. Across the three procedures, 48% of the open procedures were assigned to cdrg, compared with 39% of laparoscopic procedures (P<.001). Further, as presented in Table 3, colectomy MIS discharges were assigned to a cdrg less often than open (57% vs. 71%, respectively; relative reduction [RR], 20%), hysterectomy MIS discharges were assigned to a cdrg less often than open (15% vs. 19%; RR, 23%), and thoracic resection MIS discharges were assigned to a cdrg less often (62% vs. 70%; RR, 11%) than open. In the post-matching logistic regression model, again accounting for confounders, open surgery was associated with a 67% (OR, 1.67; 95% CI, ) increased cdrg assignment rate compared to MIS. The model we employed to estimate the reduction in payer reimbursement across the United States, assuming a 10% increase in MIS, is presented in Table 4. It should be acknowledged that not all patients are ideal candidates for undergoing MIS. Patient factors such as comorbidities, physician skills, and MIS cases with cdrg (%) Colectomy 94, Hysterectomy 142, Thoracic resection 29, hospital infrastructure could influence the access to MIS. The model was limited to hospital reimbursement for inpatient care, and does not include reimbursement associated with follow-up visits. In total, based on the Premier-provided projection weights, there were an estimated 224,592 colectomy, 279,748 hysterectomy, and 63,768 thoracic resection discharges, across the U.S. annually. Our model presents a conservative estimate of projected savings as the cdrg reimbursement was based on reimbursement for CC DRGs and a TABLE 2 Pre- and post-matching descriptive characteristics Pre-matching Post-matching Open MIS P value Open MIS P value n 181,901 84,107 67,532 67,532 Age, mean < Charlson Comorbidity Index, mean Propensity score, mean < <.001 TABLE 3 Post-matching cdrg assignment rates by procedure Open cases Procedure Discharges (n) with cdrg (%) MIS cases with cdrg (%) P value Colectomy 57, <.001 Hysterectomy 59, <.001 Thoracic 18, <.001 TABLE 4 Estimated reduction in reimbursement from a 10% increase in MIS utilization Estimated 2011 discharges 10% increase in MIS discharges MIS (%) Total reimbursement MIS (%) Total reimbursement Projected savings Colectomy 37 $2,921,587, $2,904,575,293 $17,012,076 Hysterectomy 23 $2,070,305, $2,065,321,210 $4,984,762 Thoracic 58 $858,915, $856,479,211 $2,435,800 Total $5,850,808,353 $5,826,375,714 $24,432, MANAGED CARE / MARCH 2014

5 10% increase in MIS share, which can be easily achieved given the regional variation and adoption of MIS in similar general surgeries. Our model projects $24.4 million in annual savings from reduction in payer reimbursement for colectomy ($17 million), hysterectomy ($5 million), and thoracic resection ($2.4 million). DISCUSSION Our results considerably extend previous single-procedure, singleinstitution research (Senagore 2005) showing the association between MIS and lower cdrg assignment by analyzing data from a large national claims database and multiple procedures. To our knowledge, this is the first such national study performed. We risk-adjusted the data by propensity-matching the open and MIS cases based on patient characteristics including comorbidities, hospital characteristics, procedural characteristics, payer, and surgeon specialty. After accounting for a majority of confounders, we found an association between MIS and a lower rate of cdrg assignment for all three procedures analyzed. Although there might be other clinical reasons for why the MIS cohort was associated with fewer cdrg assignments, having accounted for the most common preoperative patient related clinical factors, we believe the difference in the rate of postoperative complications as a result of the surgical approach remains the principal reason for cdrg assignment. The Center for Medicare and Medicaid Services (CMS) acute Inpatient Prospective Payment System (IPPS) is used to pay for inpatient stays under Medicare Part A. Each discharge is assigned a DRG, which has an associated payment weight based on average resources used. The more complex and resource-intensive the DRG, the higher the weight assigned. To determine reimbursement for a given discharge, Medicare uses a formula that multiplies the DRG s relative weight by the base payment rate (in 2013, this was $5,774.25). Medicare further adjusts the reimbursement amount based on a number of largely nonclinical factors, including hospital location, teaching status, and percentage of low-income patients. Appendix Table 2 presents the 2013 Medicare base reimbursement for the DRGs in this study. There is a significant difference in reimbursement between non-cdrg and cdrg discharges. In 2013, the base Medicare reimbursement for non-cdrg colectomy discharges was $9,447.25, while cdrg reimbursement was $14, to $30, Hysterectomy and thoracic resection show similar differences. With hundreds of thousands of procedures performed each year, reducing the number of cdrg assignments based on postoperative complications can result in significant cost savings from a payer perspective. Our results suggest that MIS can help reduce overall U.S. health care system reimbursement costs. Our model conservatively estimates nearly $24.4 million in annual savings for a 10% increase in MIS utilization. MIS is also associated with fewer readmissions and faster recovery time, which could further add to the savings. Administrative claims databases, such as Premier, allow for the study of large populations, but there are limitations. Patients were not randomized, so there is potential for selection bias. Although we attempted to control for clinical severity, surgeons may have used additional clinical data available to select their approach. Also, based on data available, we could not identify and eliminate the MIS procedures that were converted to open procedures. There might be coding errors, documentation errors, and incomplete records. However, these errors should be distributed equally between the MIS and open groups. Factors such as surgeon training or other surgeon preferences could not be accounted for and might affect results. Despite these limitations, this study presents the first nationallevel payer view of the potential association between MIS utilization and cdrg assignment. Collectively, this study, along with others demonstrating MIS s superior outcomes, supports greater adoption of MIS for colectomy, hysterectomy, and thoracic procedures. Further research, including a prospective cohort study, are required to definitively determine if MIS is the reason for the lower rate of cdrg assignment. CONCLUSION The U.S. health care industry is in the midst of a fundamental transformation, stemming largely from rising costs and inconsistent quality of care. Health care reform laws and economic pressures are causing a shift in focus from volume-based to value-based care. Payers and providers continue to explore innovations that improve clinical outcomes and reduce costs, and MIS is one such innovation. MIS approaches in colectomy, hysterectomy, and thoracic resection have demonstrated significant clinical benefits, including a reduction in both hospital cost per case and payer reimbursement expense based on fewer cdrg assignments. Further adoption of MIS may lead to improved outcomes and additional savings. REFERENCES Alkhamesi NA, Martin J, Schlachta CM. Cost-efficiency of laparoscopic versus open colon surgery in a tertiary care center. Surg Endosc. 2011;25: ACOG (American College of Obstetricians and Gynecologists). ACOG MARCH 2014 / MANAGED CARE 51

6 recommends vaginal hysterectomy as approach of choice. Healthcanal. female-reproductive/3734-acog- Recommends-Vaginal-Hysterectomy- Approach-Choice.html. Published Oct. 25, Accessed Feb. 28, Barnett JC, Judd JP, Wu JM, et al. Cost comparison among robotic, laparoscopic, and open hysterectomy for endometrial cancer. Obstet Gynecol. 2010;116: Bijen CB, Vermeulen KM, Mourits MJ, de Bock GH. Costs and effects of abdominal versus laparoscopic hysterectomy: systematic review of controlled trials. PLoS One. 2009;4:e7340. Bilimoria KY, Bentrem DJ, Merkow RP, et al. Laparoscopic-assisted vs open colectomy for cancer: comparison of short-term outcomes from 121 hospitals. J Gastrointest Surg. 2008;12: Bonjer HJ, Hop WC, Nelson H, et al. Laparoscopically assisted vs open colectomy for colon cancer: a meta-analysis. Arch Surg. 2007;142: Bosio RM, Smith BM, Aybar PS, Senagore AJ. Implementation of laparoscopic colectomy with fast-track care in an academic medical center: benefits of a fully ascended learning curve and specialty expertise. Am J Surg. 2007;193: Casali G, Walker WS. Video-assisted thoracic surgery lobectomy: can we afford it? Eur J Cardiothorac Surg. 2009;35: Chalermchockchareonkit A, Tekasakul P, Chaisilwattana P, et al. Laparoscopic hysterectomy versus abdominal hysterectomy for severe pelvic endometriosis. Int J Gynaecol Obstet. 2012;116: Cheng D, Downey RJ, Kernstine K, et al. Video-assisted thoracic surgery in lung cancer resection: a meta-analysis and systematic review of controlled trials. Innovations (Phila). 2007;2: Cho S, Do YW, Lee EB. Comparison of costs for video-assisted thoracic surgery lobectomy and open lobectomy for non-small cell lung cancer. Surg Endosc. 2011;25: COST (Clinical Outcomes of Surgical Therapy) Study Group. A comparison of laparoscopically assisted and open colectomy for colon cancer. N Engl J Med. 2004;350: Delaney CP, Chang E, Senagore AJ, Broder M. Clinical outcomes and resource utilization associated with laparoscopic and open colectomy using a large national database. Ann Surg. 2008;247: Eisenberg DP, Wey J, Bao PQ, et al. Shortand long-term costs of laparoscopic colectomy are significantly less than open colectomy. Surg Endosc. 2010;24: Epstein AJ, Groeneveld PW, Harhay MO, et al. Impact of minimally invasive surgery on medical spending and employee absenteeism. JAMA Surg. 2013;148: Fullum TM, Ladapo JA, Borah BJ, Gunnarsson CL. Comparison of the clinical and economic outcomes between open and minimally invasive appendectomy and colectomy: evidence from a large commercial payer database. Surg Endosc. 2010;24: Hidlebaugh D, O Mara P, Conboy E. Clinical and financial analyses of laparoscopically assisted vaginal hysterectomy versus abdominal hysterectomy. J Am Assoc Gynecol Laparosc. 1994;1(4 Pt 1): Howington JA, Gunnarsson C, Maddaus MA, et al. In-hospital clinical and economic consequences of pulmonary wedge resections for cancer using video-assisted thoracoscopic techniques vs traditional open resections: a retrospective database analysis. Chest. 2012;141: Jensen CC, Prasad LM, Abcarian H. Costeffectiveness of laparoscopic vs open resection for colon and rectal cancer. Dis Colon Rectum. 2012;55: Kaseda S, Aoki T. Video-assisted thoracic surgical lobectomy in conjunction with lymphadenectomy for lung cancer. Nihon Geka Gakkai Zasshi. 2002;103: Kiran RP, El-Gazzaz GH, Vogel JD, Remzi FH. Laparoscopic approach significantly reduces surgical site infections after colorectal surgery: data from national surgical quality improvement program. J Am Coll Surg. 2010;211: Lenihan JP Jr, Kovanda C, Cammarano C. Comparison of laparoscopic-assisted vaginal hysterectomy with traditional hysterectomy for cost-effectiveness to employers. Am J Obstet Gynecol. 2004;190: Murthy S. Video-assisted thoracoscopic surgery for the treatment of lung cancer. Cleve Clin J Med. 2012;79(Electronic Suppl 1):eS23 es25. Nash GM, Bleier J, Milsom JW, et al. Minimally invasive surgery is safe and effective for urgent and emergent colectomy. Colorectal Dis. 2010;12: Nieboer TE, Johnson N, Barlow D, et al. Surgical approach to hysterectomy for benign gynecological disease. Cochrane Database Syst Rev. 2009;(3). Noblett SE, Horgan AF. A prospective case-matched comparison of clinical and financial outcomes of open versus laparoscopic colorectal resection. Surg Endosc. 2007;21: Olsson JH, Ellstrom M, Hahlin M. A randomized prospective trial comparing laparoscopic and abdominal hysterectomy. Br J Obstet Gynaecol. 1996;103: Sarmini OR, Lefholz K, Froeschke HP. A comparison of laparoscopic supracervical hysterectomy and total abdominal hysterectomy outcomes. J Minimally Invasive Gynecol. 2005;12: Sawada S, Komori E, Yamashita M. Very long-term outcomes of video-assisted thoracoscopic surgery for lung cancer. Surg Endosc. 2008;22: Senagore AJ, Brannigan A, Kiran RP, et al. Diagnosis-related group assignment in laparoscopic and open colectomy: financial implications for payer and provider. Dis Colon Rectum. 2005;48: Senagore AJ, Duepree HJ, Delaney CP, et al. Cost structure of laparoscopic and open sigmoid colectomy for diverticular disease: similarities and differences. Dis Colon Rectum. 2002;45: Shen CC, Wu MP, Lu CH, et al. Short and long term clinical results of laparoscopic assisted vaginal hysterectomy and abdominal hysterectomy. J Am Assoc Gynaecol Laparosc. 2003;10: Sihoe AD, Yim AP. Lung Cancer Staging. J Surg Res. 2004;117: Swanson SJ, Batirel HF. Video-assisted thoracic surgery (VATS) resection for lung cancer. Surg Clin North Am. 2002;82: Swanson SJ, Meyers BF, Gunnarsson CL, et al. Video-assisted thoracoscopic lobectomy is less costly and morbid than open lobectomy: a retrospective multiinstitutional database analysis. Ann Thorac Surg. 2011; Tiwari MM, Reynoso JF, High R, et al. Safety, efficacy, and cost-effectiveness of common laparoscopic procedures. Surg Endosc. 2011;25: Vaid S, Tucker J, Bell T, et al. Cost analysis of laparoscopic versus open colectomy in patients with colon cancer: results from a large nationwide population database. Am Surg. 2012;78: Varela JE, Asolati M, Huerta S, Anthony T. Outcomes of laparoscopic and open colectomy at academic centers. Am J Surg. 2008;196: Villamizar NR, Darrabie MD, Burfeind WR, et al. Thoracoscopic lobectomy is associated with lower morbidity compared with thoracotomy. J Thorac Cardiovasc Surg. 2009;138: MANAGED CARE / MARCH 2014

7 APPENDIX Appendix Table 1 ICD procedure and MS-DRG codes used to select discharges MIS Open MS-DRG Procedure ICD code ICD code Code Description cdrg assignment Colectomy Major Small and Large Bowel Procedures w MCC Yes Major Small and Large Bowel Procedures w CC Yes Major Small and Large Bowel Procedures w/o CC/MCC No Hysterectomy Pelvic Evisceration, Radical Hysterectomy and Radical Vulvectomy Yes w CC/MCC Pelvic Evisceration, Radical Hysterectomy and Radical Vulvectomy No w/o CC/MCC Uterine and Adnexa Procedures for Ovarian or Adnexal Malignancy Yes w MCC Uterine and Adnexa Procedures for Ovarian or Adnexal Malignancy Yes w CC 738 Uterine and Adnexa Procedures for Ovarian or Adnexal Malignancy No w/o CC/MCC 739 Uterine, Adnexa Procedures for Nonovarian/Adnexal Malignancy Yes w MCC 740 Uterine, Adnexa Procedures for Nonovarian/Adnexal Malignancy Yes w CC 741 Uterine, Adnexa Procedures for Nonovarian/Adnexal Malignancy No w/o CC/MCC 742 Uterine and Adnexa Procedures for Nonmalignancy w CC/MCC Yes 743 Uterine and Adnexa Procedures for Nonmalignancy w/o CC/MCC No Thoracic Major Chest Procedures w MCC Yes Major Chest Procedures w CC Yes Major Chest Procedures w/o CC/MCC No CC=complications and comorbidities, cdrg=complex Diagnosis Related Groups, ICD=International Classification of Diseases, MCC=major complications and comorbidities, MIS=minimally invasive surgery, MS-DRG=Medicare Severity Diagnosis Related Groups MARCH 2014 / MANAGED CARE 53

8 Appendix Table 2 Medicare national average reimbursement rates for FY 2013 by MS-DRG MS-DRG Average payment 329: Major Small and Large Bowel Procedures w MCC $30, : Major Small and Large Bowel Procedures w CC $14, : Major Small and Large Bowel Procedures w/o CC/MCC $9, : Pelvic Evisceration, Radical Hysterectomy and Radical Vulvectomy w CC/MCC $15, : Pelvic Evisceration, Radical Hysterectomy and Radical Vulvectomy w/o CC/MCC $6, : Uterine and Adnexa Procedures for Ovarian or Adnexal Malignancy w MCC $25, : Uterine and Adnexa Procedures for Ovarian or Adnexal Malignancy w CC $11, : Uterine and Adnexa Procedures for Ovarian or Adnexal Malignancy w/o CC/MCC $7, : Uterine, Adnexa Procedures for Nonovarian/Adnexal Malignancy w MCC $19, : Uterine, Adnexa Procedures for Nonovarian/Adnexal Malignancy w CC $9, : Uterine, Adnexa Procedures for Nonovarian/Adnexal Malignancy w/o CC/MCC $6, : Uterine and Adnexa Procedures for Nonmalignancy w CC/MCC $8, : Uterine and Adnexa Procedures for Nonmalignancy w/o CC/MCC $5, : Major Chest Procedures w MCC $29, : Major Chest Procedures w CC $15, : Major Chest Procedures w/o CC/MCC $10, Appendix Table 3 Predictors of minimally invasive surgery Effect Odds Ratio Lower 95% CI Upper vs 35 years vs vs vs vs vs Male vs female Black vs white Others vs white Northeast vs South Midwest vs South West vs South Urban vs rural Teaching vs nonteaching beds vs <100 beds beds vs <100 beds >500 beds vs <100 beds Medicaid vs Medicare Managed care vs Medicare Uninsured vs Medicare Others vs Medicare Nonelective vs elective admission Myocardial infarction Congestive heart failure Peripheral vascular disease MANAGED CARE / MARCH 2014

9 Appendix Table 3, continued Predictors of minimally invasive surgery Effect Odds Ratio Lower 95% CI Upper Cerebrovascular disease Dementia COPD Rheumatic disease Ulcers Liver disease, mild Liver disease, moderate/severe Diabetes Diabetes + sequelae Chronic renal failure Malignancy Metastatic solid tumor Paralysis AIDS Obesity Hypertension Others vs general surgeons Colorectal surgeons vs general surgeons Obstetrics and gynecology vs general surgeons Thoracic surgeon vs general surgeons Colectomy vs hysterectomy Thoracic vs hysterectomy Multiple segmental large bowel resection vs abdominal hysterectomy Cecectomy vs abdominal hysterectomy Right hemicolectomy vs abdominal hysterectomy Transverse colon resection vs abdominal hysterectomy Left hemicolectomy vs abdominal hysterectomy Sigmoidectomy vs abdominal hysterectomy Unspecified partial large intestine resection vs abdominal hysterectomy Total intra-abdominal colectomy vs abdominal hysterectomy Supracervical/subtotal hysterectomy vs abdominal hysterectomy Vaginal hysterectomy vs abdominal hysterectomy Radical hysterectomy vs abdominal hysterectomy Wedge resection vs abdominal hysterectomy Segmental resection vs abdominal hysterectomy Lung lobectomy vs abdominal hysterectomy Other diagnosis vs malignancy Benign neoplasm of colon vs malignancy IBD / diverticulitis vs malignancy Benign fibroids vs malignancy Endometriosis vs malignancy Menstrual disorders vs malignancy Genital prolapse vs malignancy Secondary neoplasm of respiratory system vs malignancy Pulmonary fibrosis vs malignancy Pneumothorax vs malignancy MARCH 2014 / MANAGED CARE 55