Trends in Hospital Billing for Mastectomy and Breast Reconstruction Procedures from 2013 to 2020

Keyword

breast reconstruction - mastectomy - billing - markup - breast cancer

The role of plastic surgeons in the multidisciplinary care of patients with breast cancer continues to increase, with greater acceptance of postmastectomy breast reconstruction (PMBR) as a safe and reliable treatment option.[1] [2] In 1997, Medicare extended coverage for PMBR among patients undergoing oncologic treatment for breast cancer.[3] Thereafter, the Women's Health and Cancer Rights Act of 1998 federally mandated PMBR coverage by private insurance companies, in an attempt to increase access to available breast reconstruction techniques.[4] Despite such efforts, utilization of PMBR remains lower than expected, especially among uninsured patients.[5]

Annually, the Centers for Medicare and Medicaid Services (CMS) assigns reimbursement rates for procedures in a fee-for-service manner.[6] Each procedure is billed with a corresponding Current Procedural Terminology (CPT) code. Recent studies report declining Medicare reimbursement rates for common plastic and reconstructive surgery and breast reconstruction procedures.[7] [8] [9] [10] [11] Medicare reimbursement rates are strongly correlated with those set by private insurance companies.[12] In response to potential lost revenue from lower reimbursement, hospitals may increase procedural charges.[13] [14] Hospital charges are the foundation for price negotiations regardless of insurance type.[13] [14] [15] [16] In general, CMS billing criteria protect Medicare and Medicaid patients from excessive hospital charges. However, uninsured and underinsured populations, who lack such bargaining power, may be required to pay all or part of these charges, facing significant financial consequences from excessive hospital markups.[13] [14] [15] [16]

Despite the passage of the Affordable Care Act, over 27 million Americans remained uninsured in 2021,[17] and nearly 3% of patients diagnosed with breast cancer are uninsured.[18] Compared to private insurance, uninsured status was associated with late-stage breast cancer diagnosis, delays in treatment, and lower odds of undergoing PMBR.[5] [19] While this association is likely multifactorial, financial burden secondary to excessive markups is a potential barrier to accessing appropriate care for disadvantaged patients.[20] Medicare data have been widely used to study hospital and procedural markups in previous studies.[7] [13] [14] [15] We hypothesized that hospitals may increase charges for mastectomy and breast reconstruction in response to changes in Medicare reimbursement rates. In this study, we aimed to analyze mastectomy and breast reconstruction procedures billed to Medicare Part B to gain insight into billing trends and implications on uninsured and underinsured patients.

Methods

CPT codes for relevant mastectomy and breast reconstruction procedures ([Supplementary Table S1], available in the online version) were identified. The CPT codes were categorized into four categories: mastectomy, implant-based reconstruction, and autologous reconstruction. Using the CPT codes, we queried the 2013 to 2020 Medicare Provider Utilization and Payment Data by CMS to collect the number of services, charges, and reimbursements (i.e., Medicare-allowed amounts) of all mastectomy and breast reconstruction procedures billed to Medicare Part B from January 2013 to December 2020. Since the dataset is publicly available, this study did not require an IRB approval. The 2013 to 2020 annual Medicare enrollment was collected from the CMS Program Statistics.[21] The 2013 to 2020 Consumer Price Index (i.e., inflation rate) was collected from the U.S. Bureau of Labor Statistics.[22] Annual procedural utilization was calculated as the sum of service counts adjusted per million female Medicare beneficiaries.[23] [24] As the American Community Survey did not report the percentage of female Medicare beneficiaries for 2020 due to the coronavirus-19 pandemic,[24] we estimated this value as an average of the 2019 value and 2021 value. All monetary values for charges and reimbursements were inflation-adjusted to the 2020 U.S. Dollar using the Consumer Price Index. Using the equation described in prior studies,[7] [13] we calculated weighted mean values of charges and reimbursements for all procedures, mastectomies, and breast reconstructions performed each calendar year. Further, charge-to-reimbursement ratios (CRRs) as a proxy to assess markups were calculated, as well as the total and annual percentage changes of utilization, charges, reimbursements, and CRRs for mastectomy and breast reconstruction procedures over the study period. As a comparison, we calculated charges, reimbursements, and CRRs for all CPT codes (00100-99499) included in the Medicare Provider Utilization and Payment Data as well. The R Software Version 4.2.1 (R Core Team for Statistical Computing, Vienna, Austria) was used to perform the statistical analyses.

Results

Among the 14 CPT codes used to query the Provider Utilization and Payment Data Physician and Other Practitioners Dataset, 12 CPT codes (85.7%) were included in this study, and the remaining 2 CPT codes without service counts were excluded as shown in [Supplementary Table S1] (available in the online version). Utilization of mastectomy and breast reconstruction procedures decreased from 1,889 to 1,288 (−31.8%) procedures per million female Medicare beneficiaries from 2013 to 2020 ([Table 1]). The mastectomy utilization decreased the most by 37.5%. The utilization of immediate implant-based reconstruction (CPT 19340) increased by 36.2% over the study period (see [Supplementary Table S2], available in the online version, which shows procedural utilizations over time).

Table 1 Utilization of mastectomy and breast reconstruction procedures billed to Medicare Part B from 2013 to 2020

Type	2013	2014	2015	2016	2017	2018	2019	2020	Total % change	Annual % change
Total	1,889	1,782	1,825	1,603	1,502	1,485	1,475	1,288	−31.8%	−4.5%
Mastectomy	1,281	1,174	1,093	1,016	950	924	892	801	−37.5%	−5.4%
Implant reconstruction	555	552	673	527	497	503	525	439	−20.9%	−3.0%
Autologous reconstruction	52	57	59	60	55	57	58	48	−9.0%	−1.3%

Note: Procedural utilizations are calculated as the number of services adjusted per million female Medicare enrollees in each calendar year.

Table 2 Billing trends in mastectomy and breast reconstruction procedures billed to Medicare Part B from 2013 to 2020

Type	Variable	2013	2014	2015	2016	2017	2018	2019	2020	Total % Change	Annual % Change
Total	Charge	$3,944	$4,173	$4,155	$4,553	$4,729	$4,827	$4,971	$5,106	29.5%	4.2%
	Reimbursement	$1,118	$1,127	$1,089	$1,125	$1,103	$1,078	$1,081	$1,083	−3.2%	-0.5%
	CRR	3.5	3.7	3.8	4.0	4.3	4.5	4.6	4.7	34.3%	4.9%
Mastectomy	Charge	$2,994	$3,112	$3,151	$3,197	$3,261	$3,285	$3,351	$3,336	11.4%	1.6%
	Reimbursement	$1,048	$1,051	$1,066	$1,049	$1,035	$984	$988	$978	−6.7%	-1.0%
	CRR	2.9	3.0	3.0	3.0	3.2	3.3	3.4	3.4	17.2%	2.5%
Implant reconstruction	Charge	$5,171	$5,396	$4,565	$5,727	$5,923	$6,061	$6,090	$6,481	25.3%	3.6%
	Reimbursement	$1,362	$1,353	$1,128	$1,341	$1,308	$1,290	$1,295	$1,314	−3.6%	-0.5%
	CRR	3.8	4.0	4.0	4.3	4.5	4.7	4.7	4.9	28.9%	4.1%
Autologous reconstruction	Charge	$11,899	$12,189	$13,440	$15,357	$16,458	$16,626	$17,164	$19,403	63.1%	9.0%
	Reimbursement	$2,043	$2,018	$2,022	$2,074	$2,098	$2,063	$2,048	$2,105	3.0%	0.4%
	CRR	5.8	6.0	6.6	7.4	7.8	8.1	8.4	9.2	58.6%	8.4%
Capsulotomy	Charge	$3,961	$4,086	$4,338	$4,338	$4,635	$4,622	$4,851	$4,975	25.6%	3.7%
	Reimbursement	$785	$790	$807	$767	$723	$720	$745	$763	−2.8%	-0.4%
	CRR	5.0	5.2	5.4	5.7	6.4	6.4	6.5	6.5	30.0%	4.3%
Other reconstruction	Charge	$4,430	$4,707	$5,095	$5,178	$5,406	$5,474	$5,615	$5,851	32.1%	4.6%
	Reimbursement	$1,036	$1,080	$1,120	$1,082	$1,071	$1,084	$1,100	$1,094	5.6%	0.8%
	CRR	4.3	4.4	4.5	4.8	5.0	5.1	5.1	5.3	23.3%	3.3%

Abbreviation: CRR, Charge-to-reimbursement ratio.

Note: All monetary values for charges and reimbursements were adjusted to the 2020 US Dollars.

While the weighted mean reimbursement for the included procedures decreased from $1,168 in 2013 to $1,134 in 2020 (−2.9%), the weighted mean charge increased from $3,880 to $5,002 (+28.9%) ([Table 2]). These changes resulted in a 33.3% increase in CRRs from 3.3 in 2013 to 4.4 in 2020. As a comparison, the weighted mean reimbursement, weighted mean charge, and CRR changed by −2.0%, +11.6%, and +13.8%, respectively, at the national level over the same period (see [Supplementary Table S3], available in the online version, which shows billing trends for all CPT codes). CRRs remained the lowest for mastectomy procedures during the study period, ranging from 2.9 to 3.4. Charges for autologous breast reconstructions were higher than other types of breast surgeries throughout the study period, increasing from $11,899 in 2013 to $19,403 in 2020 (+63.1%). CRRs of autologous breast reconstruction procedures increased rapidly from 5.8 to 9.2 (+58.6%) over the study period. [Fig. 1] represents the billing trends in mastectomy and breast reconstruction procedures over the study period. [Supplementary Table S4] (available in the online version) lists charges, reimbursements, and CRRs of individual CPT codes. Notably, hospital charges and CRRs for immediate implant-based reconstruction (CPT 19340) increased by 33.5 and 36.4%, respectively, over the study period. Hospital charges and CRRs for free flap reconstruction (CPT 19364) increased by 29.0 and 47.1%, respectively.

Fig. 1 Billing trends in mastectomy and breast reconstruction.

When CRRs of mastectomy and breast reconstruction procedures were calculated at the state level, there was a wide variation. New Jersey (CRR 7.9), New York (CRR 7.1), and Wisconsin (CRR 6.4) had the highest weight mean CRRs (see [Supplementary Table S5], available in the online version, which shows CRRs of mastectomy and breast reconstruction procedures across different states). Only Puerto Rico (CRR 1.4) had a weighted mean CRR below 2. [Fig. 2] is the United States map of CRRs in different states.

Fig. 2 Charge-to-reimbursement ratios of mastectomy and breast reconstruction procedures in different states.

Discussion

Our cross-sectional study on billing trends of mastectomy and breast reconstruction procedures had the following key findings. First, there was a marked increase in the utilization of immediate, implant-based reconstruction from 2013 to 2020. Second, the overall inflation-adjusted reimbursement rate for mastectomies and breast reconstructions decreased minimally over the study period (−2.9%). Third, there was an increase in inflation-adjusted hospital charges across all types of procedures, with an overall increase of 28.9% during the study period. These changes in reimbursements and charges resulted in a 33.3% rise in CRRs of all procedures. While reimbursements have been appropriately rising along the inflation rate, procedural charges have been increasing more rapidly. Thus, billing trends for mastectomies and breast reconstructions were concerning for worsening access to care for uninsured patients, privately insured patients (especially those underinsured), and out-of-network patients.

In 2012, the mean markup among hospitals in the United States was 3.4.[14] While the weighted mean CRR for mastectomy and breast reconstruction procedures in 2013 was comparable to this number, the CRR continued to rise each year, reaching as high as 4.4 in 2020. We initially hypothesized that decreasing Medicare reimbursement rates may be a potential driving force for changes in hospital charges, as studies in various surgical specialties have demonstrated a decline in Medicare reimbursement rates.[7] [8] [9] [13] [25] [26] However, we found that reimbursements minimally changed over the study period, while hospital charges continued to rise rapidly at a rate faster than the overall Medicare Part B (+29.5% for mastectomy and breast reconstruction CPT codes vs. +11.6% for all CPT codes). One potential contributing factor to excess charges may include the significance of mastectomies and PMBRs in the surgeon's practice. For example, using various predictive models, Sen and Deokar identified “procedure significance for practice” as one of the most important predictors of excess charges for cataract surgery.[27] Thus, regardless of recent changes in Medicare reimbursements, hospitals may be more inclined to overbill these surgeries if they account for a major proportion of the breast surgery practice.

Implant-based reconstructions were one of the most common reconstructive approaches. Similar to prior studies,[2] [28] we report a rise in the utilization of immediate direct-to-implant reconstruction (CPT 19340) faster than the decline in the utilization of delayed direct-to-implant reconstruction (CPT 19342) over time (+36.2% for CPT 19340 vs. −15.1% for CPT 19342). Immediate breast reconstructions are now more widely accepted as a safe treatment option for breast cancer management.[1] [2] Momoh et al reported that plastic surgeons prefer to perform immediate and implant-based reconstructions (both implant and tissue expander insertions) for patients undergoing mastectomies, even if they require postmastectomy radiotherapy,[29] due to its advantages in low complication rates, low psychological distress, and excellent cosmetic outcomes.[30] As the changes in inflation-adjusted charges and CRRs were comparable between immediate and delayed direct-to-implant reconstructions, uninsured and underinsured patients may not be financially impacted by choosing one reconstructive option over the other. However, the overall increase in charges for implant-based reconstructions may pose a financial burden on uninsured and underinsured patients who lack bargaining power.[14] [31] While hospitals often offer as high as a 30% discount off the initial charge for uninsured patients, the remaining charge is still far higher than the amount fully insured patients are responsible for.[31]

Autologous breast reconstructions were not as commonly performed as implant-based reconstructions. We found that hospital charges for autologous breast reconstructions, namely free flap breast reconstructions, were much higher than other types of breast reconstruction. Compared to other procedures, charges and CRRs for free flap breast reconstructions changed more rapidly over time. As free flap breast reconstructions are resource-intensive and require microsurgical techniques,[32] [33] there may exist greater interhospital variations in billing practice. Billig et al investigated variations in the cost of free flap reconstructions using the 2008 to 2010 National Inpatient Sample dataset.[34] The authors reported that procedures performed at high-volume hospitals were more expensive ($24,360 per procedure at hospitals with 31 or more vs. $18,918 per procedure at hospitals with 10 or fewer cases) but had lower complication rates, which in turn might result in lower overall cost.[34] While procedural costs may not directly correlate to hospital charges, both numbers need further investigation to identify the driving factors of the observed results. Transparency in the pricing of procedures should be implemented so that patients, especially uninsured and underinsured, can make an informed decisions on which hospitals offer access to reconstruction most suitable for their financial condition.

Moreover, these billing trends may affect plastic surgeons' reimbursements. Since the Patient Protection and Affordable Care Act was signed into law, there has been an increasing interest bundled payment models versus traditional fee-for-service models.[35] For example, bundling breast reconstruction procedures with other aspects of breast cancer treatment is a potential consideration.[36] Also, contractual reimbursement agreements (carve-outs) with insurance providers have started to emerge.[37] However, not all hospitals are able to negotiate or optimize their carve-outs with insurance companies, resulting in a huge disparity between hospitals in regard to providers reimbursements and consequently their motivation to perform these complex procedures. Without optimized contractual reimbursement agreements, the financial sustainability of these procedures is compromised, hospital and surgeons will likely not be able to perform these operations, and thus, patients needing these surgeries will be affected. Therefore, understanding practice costs and billing trends will allow plastic surgeons to evaluate the true value of their practice, insurance reimbursements, and the economic suitability of their work performance to determine where the most value for themselves and patients is and furthermore to evaluate whether carve-outs are worth pursuing. Ultimately, by aligning the best quality patient care with insurance companies' financial motivations, plastic surgeons can improve reimbursement for reconstructive procedures.

Billing trends seen in mastectomy and breast reconstruction procedures have implications on other stakeholders in medicine besides patients. While the No Surprises Act has banned surprise out-of-network billing since January 2022,[38] [39] insurance companies will resume price negotiations with providers for in-network underinsured patients and uninsured patients. The price negotiation process has become more important since January 2021 as hospitals are now required to list gross charges, payer-specific negotiated rates, minimum/maximum negotiated rates, and discounted cash prices for shoppable services (i.e., services that can be scheduled in advance by consumers).[40] The clinical setting (e.g., hospitals) will monitor revenues generated by these surgeries and adjust the allocation of resources (e.g., operating room time) appropriately.

Our study has several limitations. First, we used reimbursement rates reported in Medicare Part B data as the denominator of CRRs. Thus, we are unable to analyze based on reimbursement rates set by private insurers. However, Medicare reimbursement rates are strongly correlated with private payer rates.[12] Second, we used charges reported in Medicare data as the numerator of CRRs. Although the reported charges are the reference value for price negotiations regardless of payer types,[16] we were unable to estimate the actual cost that uninsured and underinsured patients would be responsible for. Further research on the costs of PMBR procedures across hospitals with varying surgical volumes is imperative. In addition, hospital charges to Medicare beneficiaries may not be representative of non-Medicare patients, as hospital charges could be higher due to complications related to chronic diseases during the mastectomy or reconstruction and not directly related to the surgery. Also, we could not directly assess the impact of increasing hospital charges on uninsured and underinsured patients. Further research is needed to evaluate the extent of charitable fund, government subsidy, and discount that hospitals may offer to financially vulnerable patients. Third, as the Medicare dataset was not reported at the patient level, we could not determine the specific indications of billed procedures. Studies using billing information for uninsured and out-of-network patients requiring PMBR would be essential to confirm the billing trends reported in this study. Lastly, not all CPT codes may have been related to breast reconstruction postmastectomy or for breast cancer.

Conclusion

Our analysis of mastectomy and breast reconstruction procedures billed to Medicare Part B from 2013 to 2020 showed increasingly excessive procedural charges despite stable Medicare reimbursement rates, potentially putting an additional financial burden on uninsured and underinsured patients. Rises in hospital charges and CRRs may limit uninsured and underinsured patients from accessing necessary care for breast cancer management. Legislations that monitor hospital markups for PMBR procedures may be considered by policymakers.

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