Additional Changes to the Medicare Reimbursement Rates for Major Joint Procedures Are Needed

GAO reviewed the increase in the Medicare payment rate for bilateral or multiple joint replacement procedures in light of the resources used by the providers program costs.

GAO found that: (1) the payment rate for bilateral or multiple joint replacements was inadequate; (2) multiple replacements required more hospital resources than single replacements; (3) charges for these procedures exceeded payments by an average of $12,600; (4) performing multiple replacements under separate hospitalizations could unnecessarily increase the costs of the Medicare program; and (5) 18 percent of all revision surgeries performed in 1984 were paid for at a lower rate. GAO also found that: (1) all major joint revision surgeries should be included under diagnosis-related group (DRG) 209 where each diagnosis requires about the same amount of resources to treat; (2) all hip repair procedures should be included in DRG 210 and 211 because they are similar in resource requirements and clinical perspective; (3) the higher-cost revisions currently included in DRG 442 and 443 helped raise the overall Medicare payment rate and provided inadequate reimbursement for this surgery; and (4) the inequity in the payment rate for multiple replacements, if uncorrected, could adversely affect Medicare beneficiaries and the Medicare program.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Michael Zimmerman Team: General Accounting Office: Human Resources Division Phone: (202) 275-6195