Financial viability of endovascular aortic repair in the modern era

Abstract

Background: In the current era of cost containment, the financial impact of high-cost procedures such as endovascular aneurysm repair (EVAR) remains an area of intensive interest. Previous reports suggested slim to negative operating margins with EVAR, prompting widespread initiatives to reduce cost and to improve reimbursement. In 2015, the Centers for Medicare and Medicaid Services (CMS) announced the reclassification of EVAR to more specific diagnosis-related group (DRG) coding and predicted an overall increase in hospital reimbursement. The potential impact of this change has not been described.

Methods: Patients undergoing elective EVAR at a single institution between January 2014 and December 2018 were identified retrospectively, then stratified by date. Group 1 patients underwent EVAR before DRG change in 2015 and were classified with DRG 237/238, major cardiovascular procedure. Group 2 patients underwent EVAR after the change and were classified as DRG 268/269, aortic/heart assist procedures. The total direct cost included implant cost, operating room (OR) labor, room and board, and other supply costs. Net revenue reflected real payer mix values without extrapolation based on standard Medicare rates. Hospital profit was defined as the contribution to indirect (CTI), subtracting total direct cost from net revenue.

Results: A total of 188 encounters were included, 67 (36%) in group 1 and 121 (64%) in group 2. Medicare patients composed 84% of group 1 and 81% of group 2. CTI (profit) increased by $4447 (+123%) from $3615 in group 1 to $8062 in group 2. Net revenue per encounter increased by $2054 (+7.1%). In group 1, the higher reimbursement DRG code 237 was applied in 5 of 67 (7.5%) patients, whereas DRG code 268 was assigned in 19 of 121 (15.1%) patients in group 2. Total direct cost per encounter decreased by $2012 (-7.9%). This decrease in cost was driven by a reduction in implant cost, from a mean $16,914 per encounter in group 1 to a mean $15,655 in group 2 (-$1259 or -7.4% per encounter) and by a decrease in OR labor cost, $2838 in group 1 to $2361 in group 2 (-$477 or -17.0% per encounter).

Conclusions: A significant improvement in hospital CTI was observed for elective EVAR during the course of the study. The increased DRG reimbursement after the Centers for Medicare and Medicaid Services coding changes in 2015 was a major driver of this salutary change. Notably, efforts to reduce implant and OR cost as well as to improve coding and documentation accuracy over time had an equally important impact on financial return.

Keywords: DRG; EVAR; EVAR coding; Endograft cost.