Physician payments for professional services are long overdue for an overhaul. Healthcare policies written by US Congress provide the structure by which physicians receive payment through the Supplementary Medical Insurance Trust Fund often referred to as Medicare Part B.
Since the time of implementation of the Medicare Fee Schedule in 1992, inflationary adjustments to the fee schedule have been infrequent, resulting in costs associated with physician practices to outpace Medicare payments.
According to American Medical Association (AMA) estimates, 2024 payments adjusted for inflation are 29% less than payments in 2006. Although many factors have contributed to these payment reductions, the physician fee schedule is not linked to the Medicare Economic Index, causing a lack of inflationary adjustments annually.
This reality is further complicated by the Omnibus Budget Reconciliation Act of 1989, which specified that any projected increase in Medicare spending exceeding $20 million is to be offset by other budget cuts. In an era in which Medicare enrollees have expanded at record levels due to the Baby Boomer generation, healthcare expenses are a critical issue for the federal government. Healthcare expenses remain a frequently discussed policy issue due to the predicted shortfall in the Medicare Hospital Insurance Trust Fund as soon as 2036.
The Centers for Medicare & Medicaid Services (CMS) is tasked with identification of misvalued codes each year. Among the series of existing hernia codes, CPT 49565 was identified as a procedure in which the primary site of service changed from the inpatient to the outpatient setting.
Inherent in a Current Procedural Terminology (CPT) code is not only the operative time, but also the inpatient and outpatient visits. As hernia repairs were increasingly performed outpatient, the inpatient hospital visits associated with the procedure were identified as a potential source for physician overpayment. As a result, the entire family of ventral hernia codes, both open and laparoscopic, was subject to a review of the global physician work to accurately determine the time and effort for each code and accordingly determine the value and payment for each code.
Additionally, in 2015, CMS finalized a policy that would transition 90-day and 10-day global procedural codes to 0-day global procedures to curtail expenditures, stemming from inaccuracies in postoperative visits relative to the number of visits bundled into the payment for many common surgical codes. While this policy was never implemented, it was a culmination of these circumstances that resulted in the changes to the CPT codes for anterior abdominal wall hernia repairs.
Prior to 2023, CPT codes for ventral hernia repair included four codes for open ventral hernia repair and six laparoscopic codes, based on prior repairs and presence or absence of incarceration. An “add-on” code was used for open procedures in which mesh was placed, whereas the placement of mesh was not separately reportable for laparoscopic repairs as mesh placement was deemed inherent at the time of code creation.
These now-legacy codes had been valued by the Resource-Based Relative Value Scale Update Committee (RUC) as 90-day global procedures, thus bundling the work of the day of the procedure and 90 postoperative days into a single payment.
Due to the change in site of service for ventral hernia repair, CMS planned to survey and reassess the value of the existing codes. As a response, the surgical advisors to the AMA CPT Editorial Panel created a new series of codes to better represent the work of ventral hernia repair.
The newly created codes implemented in 2023 include six primary ventral hernia codes and six recurrent ventral hernia codes distinguished by size and incarceration status (see Table below). As the use of mesh was considered standard practice, the work of mesh placement was included within the code descriptions for all ventral hernia repairs.
Additionally, an add-on code for mesh removal was created to address the time and effort to remove a prior mesh. The new codes were created based on hernia characteristics rather than technical approach, thus unifying coding among open, laparoscopic and robotic approaches.
The new codes also specified two new codes for parastomal hernia repair, previously coded as an incisional hernia. Furthermore, recognizing the heterogeneity in hernia postoperative recovery along with the awareness of CMS’s interest in addressing potential overpayment associated with postoperative care for surgical procedures, the new codes were created as 0-day global procedures. Accordingly, the ventral hernia codes allow for postoperative inpatient and outpatient patient visits to be coded using evaluation and management (E/M) codes.
Following the new CPT code creation in 2023, the codes were valued by the AMA RUC based on survey data, and work relative value units (wRVUs) were assigned accordingly (see Table below). Compared to the 2022 codes, the wRVU values in 2023 for the technical component of the hernia repair saw reductions in total wRVU values for many procedures, although several of the more complex procedures received higher valuations.
For example, larger hernia defect size is now given a higher wRVU due to the addition of CPT codes differentiated by defect size. However, the total wRVU for a procedure inclusive of postoperative visits was difficult to predict due to the variability in the length of hospitalization and postoperative office visits among hernia repair patients.
Significance of Hernia CPT Code Changes
In the study by DiPaola et al. published in the Journal of the American College of Surgeons in October 2024, the impact of the hernia CPT code changes to the wRVUs for ventral hernia repairs at a tertiary care referral center was compared between 2022 and 2023. The wRVU value was chosen as a representative of payment as many surgeons are compensated based on wRVUs generated, although wRVUs represent only a portion of the total RVUs for a procedure.
Payment from CMS is based on the calculation of a conversion factor adjusted annually, $33.29 in 2024. In this study, most of the hernia repairs were performed with an open technique, approximately half of the procedures involved myofascial advancement flaps or component separation techniques, 9% of the procedures involved parastomal hernias, and more than half of the hernias were greater than 10 cm in greatest dimension.
The wRVUs generated from the primary procedural code, add-on codes, and E/M codes within the first 90 postoperative days were compared between the two cohorts. Highest wRVU codes were at 100% value, secondary procedures were adjusted to 50% of the code value, and add-on codes were assigned 100% of the wRVU value, consistent with typical payer practices. Upon comparison, the wRVUs associated with the primary ventral hernia repair codes pre-2023 were less than the total wRVUs in the post-2023 cohort.
However, the deletion of CPT code 49568 (placement of mesh) in 2023 resulted in less wRVUs associated with the procedure in the 2023 cohort. The new 2023 mesh removal add-on code resulted in a modest increase in wRVUs relative to the earlier cohort in which this code was not available.
Overall, the reduction in wRVUs associated with the mesh placement code was not fully offset by the additional payment associated with the newly created mesh removal code, explained by the high frequency of mesh placement relative to the far less frequently performed mesh removal. There also were notable differences in the wRVUs generated from postoperative visits both in the inpatient and outpatient setting. Average postoperative outpatient visits increased from 1.6 visits to 2.3 visits, and 12% of patients were billed for inpatient hospital stay days in 2023, an average gain of 0.9 wRVUs. Collectively, the culmination of the changes in CPT codes resulted in no difference in total wRVUs in the studied population.
While the 2023 codes did not significantly impact wRVUs in this study, this may not be generalizable to all hernia practices. This patient population was unique in that approximately half of the patients underwent concomitant component separation procedures (CPT 15734). Despite the 0-day global period for hernia repairs, when hernia repair is combined with a 90-day global period procedure, coding for postoperative visits is disallowed. This may have significantly impacted the median number of coded postoperative visits in the more contemporary group.
Most patients in the study underwent repair of hernias larger than 10 cm in greatest dimension with associated higher wRVU value. Accordingly, practices with a different mix of patients and hernia repair types are likely to see different results. Practices that more commonly repair small incisional hernias may be more likely to see reduced payments.
The 2023 size-based hernia codes require an intraoperative measurement of the hernia defect prior to opening the fascia. While there is potential to overestimate the size of the hernia defect, in this study, the percentage of hernia defects greater than 10 cm based upon intraoperative measurements correlated highly with the measurement of the hernia defect on preoperative computed tomography.
The new ventral hernia repair codes are impacting physician payment. The 15 new codes have helped to address some of the shortcomings associated with the previous coding scheme, but with some unintended consequences. Right sizing wRVU values for complex care is essential to ensure access for challenging patients. The 0-day global period allows for payment for complex or prolonged postoperative care, previously uncompensated. Nevertheless, the impact of the CPT code changes on patient access to care and the financial stability of surgical practices requires ongoing evaluation.
Dr. Scott Roth is a professor of surgery, chief of general, endocrine, and metabolic surgery, and vice-chair for faculty affairs at the University of Kentucky College of Medicine in Lexington.
Disclaimer
The thoughts and opinions expressed in this column are solely those of the authors and do not necessarily reflect those of the ACS.
Bibliography
2024 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. Available at: www.cms.gov/oact/tr/2024. Accessed December 20, 2024.
Childers CP, Maggard-Gibbons M. inaccuracies in postoperative inpatient stays assumed in the valuation of surgical RVUs. Ann Surg. 2021;273(1):13-18.
DiPaola BC, Mooney RE, Sairajeev SV, Butler L, et al. Impact of 2023 ventral hernia repair CPT code changes on work relative value units in a tertiary hernia referral center. J Am Coll Surg. October 9, 2024. doi: 10.1097/XCS.0000000000001224. Epub ahead of print.
*All specific references to CPT codes and descriptions are ©2024 American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association.
