Daniel Joyce: Always a pleasure to talk to you, Sam. I can share some slides here as we discuss what this study showed. So again, this was a study that was published in Urology Practice titled National and Location Specific Medicare Physician Fee Reimbursement Trends in Urologic Oncology from 2002 to 2024. So what the authors did is that they retrospectively reviewed certain oncologic procedures using the CMS PFS Look-Up Tool, and anyone can access this online. You just go to their website. And what they wanted to see was trends in the physician reimbursements for the 10 most common urologic oncology procedures from 2002 to 2024. They also added a couple additional CPT codes for procedures that they thought might be interesting to practicing urologic oncologists. They calculated the compound annual growth rate, which really just summarizes the average rate of change in reimbursement for these procedures. And then they looked at regional differences and summarized this in a US heat map that compares those CAGRs or compound annual growth rates between states within a decade period.
I thought it'd be worthwhile for those who don't know, to really dive into what is the professional payment. And what we're saying here is this is Medicare's payment to the surgical team for their service, and it uses this Medicare physician fee schedule, which is based on CPT codes. That reimbursement has a couple of different factors baked into it. So there's the relative value unit, which I think most practicing urologists are very familiar with, the RVU. That RVU is actually broken up into three separate sections. There's the work RVU is what we as surgeons care most about. That's our time, our skill, our effort that goes into that surgery. But then there's also the practice expense RVU. So this is what the institution has to do to be able to let you do your operations. So overhead, equipment, staff, things like that. And then there's a malpractice RVU. So what is the cost of malpractice within your area of practicing?
That's all viewed in the context of a geographic practice cost index. And the goal of this is for Medicare to be able to understand how there are different costs in different parts of the country. I don't think it's a surprise that operating costs or practice expense costs are much different in California than they are in Nebraska. And so this is trying to adjust for some of those differences in costs. And then there's a Medicare conversion factor that gets decided on and is updated frequently, and that's just how much money Medicare is going to pay per RVU. And so you get this equation at the end that says, "We're going to pay you RVU times that GPCI times that Medicare conversion factor." GPCI, talked a little bit about, but it's interesting to know a little bit more details on. The US is actually divided into localities to come up with this GPCI.
And there are currently 112 localities within the United States. And again, that GPCI is based on the work GPCI. So these are all the components of that RVU. So you get the work GPCI, and that's based on the Bureau of Labor Statistics wage data. There's the practice expense, and this is what it costs to have rent, utilities, staff, and that's based on a lot of different sources. But the commercial rent surveys, wage indices, census state, a lot of different aspects of data that they use to inform this. And then there's the malpractice GPCI, which is really just based on malpractice premium data. It's interesting, if you look at Tennessee, we have one locality, statewide locality. If you look at New York, they have eight different localities. So depending on where you practice, things get divided up a lot more into smaller areas as opposed to kind of a statewide GPCI.
So let's get into the results. I think the results are very obvious and perhaps not all that surprising. If you look at inflation-adjusted Medicare physician reimbursement over a 20 year period, it's just straight down for most of these surgeries. That top line there is cystectomy. The red line you can see is a radical nephrectomy. The yellow line down there is an orchiectomy and the green is TURBT. And then if you look at the bottom line, that's prostate biopsy. So not all of these are taking a steep dive. Some of the smaller procedures like a prostate biopsy are relatively stable over time, but you can see there is a just continual decline, and that's adjusting for inflation. When you look at that compound annual growth rate by procedure, it's a little eye-opening that the top three surgeries that are getting the most cut in their reimbursement are some of the most common surgeries we do, so prostatectomy, TURBT, and cystoscopy.
How about regional differences? It's kind of bizarre, honestly. Clearly there are some differences in rural versus urban areas here. So the green is the difference from that national CAGR. Red ones are taking more of a hit than the green ones as far as decreased reimbursement, but it doesn't really add up all that much. So there were less severe declines in certain urban areas of California, like LA and San Francisco, Texas, Austin, Fort Worth, D.C. There were certain urban rural areas in New York and Florida that had less severe declines. And then some various statewide localities like Washington, Georgia, Massachusetts, Michigan, Oklahoma, and Puerto Rico. The more severe declines included some rural areas of California and Oregon, certain urban areas of Illinois and Missouri. Texas, like Dallas and Galveston, New York, Queens and Florida and Fort Lauderdale. And then the statewide localities that saw some severe declines were our own Tennessee, but also Nevada, Arizona, Hawaii, Wisconsin, Ohio, Alabama, North Carolina, Vermont, Connecticut.
So there isn't a whole lot of trends there. And it's interesting to see that what you'd expect, maybe urban areas compared to rural areas would be the trend here. But you do see some of that, but not as much as you would expect. I think the real take home here is that policy matters and it's helpful to understand a few of the different policy changes that have been made over time that help us understand a little bit better about the impact of what these price reductions can do. So the Balanced Budget Act of 1997 introduced a sustainable growth rate to limit Medicare spending by cutting physician reimbursements in response to increased healthcare expenditures. The goal here was to balance the budget. And interesting, there was a ton of pushback from this. And actually what we started to see was decrease in access to care. So a lot of facilities were shutting down.
A lot of people were running on less staff, and that really impacted patients' access to care, especially in the rural communities. That was all done away with with the Medicare access and CHIP Reauthorization Act in 2015. The goal of this was instead to really shift the focus to value-based care, value-based reimbursement for procedures, there have been multiple other Consolidated Appropriation Acts, particularly in response to COVID-19, that also have really kept influencing how physicians get reimbursed here. But the real thing to know is is that this is a constantly changing thing and really does demand physician input in order to guide how Medicare is going to reimburse things in the future.
Sam Chang: Dan, that was a great overview. Obviously, we are in a time of change. I wanted to ask a couple simple questions that you may or may not know the answer to. So we as physicians are somewhat, obviously it does hurt when you see all those procedures, the reimbursement going down steadily over basically the time I've been in practice. So that makes you wonder, of the components that you talk about. You've got RVU, you've got a certain geographic cost, et cetera, and then you've got the Medicare factor in terms of this is what... What has really, or do you have an idea of which component has really led to that decline? Is it the RVU designation has decreased for those procedures? Is it overall the Medicare conversion factors gone out? Do you have an idea of which component, or maybe all three have contributed to this decline? Do you have an idea specifically regarding which?
Daniel Joyce: The driver is primarily RVUs. And a lot of that came about when they started comparing open to robotic, like prostatectomy for instance. And it really dropped dramatically because these have committees that review how much an RVU should be, how many RVUs a certain procedure should be, and they decide, "Well, this is less time intensive now, and so we're going to drop the RVUs." Which is kind of like a vicious cycle though. If you get to be more efficient at doing a robotic prostatectomy, people are going to look at that and say, well, shoot, this is a half hour procedure. We should cut the RVUs down, which then incentivize, well, doesn't incentivize, it forces you to produce more. So you're doing more for less money in order to make up for those RVU drops. And I think the authors in this paper rightfully propose that that's going to lead to significant physician burnout.
Sam Chang: Yeah, I think that early on, I think there was a little bit of a naive push by urologic surgeons to say, "I'm the best. Look what we can do. Look at all these things." It doesn't decrease the magnitude of the importance of the surgery, the effort, I think. But a lot of it honestly probably does have to do with time, and perhaps it is a little bit shorter, but I want to make sure that everybody understands there's a overall bucket of RVUs that all specialties have, this is our total. So when we pull an RVU from a certain area, an RVU somewhere else may increase, but that overall bucket is one bucket. Isn't that right, Dan? I just want to make sure I'm saying that correctly.
Daniel Joyce: I think that's correct. I think there is constant change in all of these factors that get reassessed by Congress on a semi-annual, every three years sometimes for these RVUs. So it a moving target, but yeah.
Sam Chang: Yeah. And then I think importantly, as we see the current environment and how important the Bureau of Labor Statistics is, the importance of the research that is or was thought to be non-political, those statistics, when you showed that map of the US with such disparate changes, it's hard to tell regionally, state, or the little multiple buckets within each state, how much it can influence actually the outcomes in fee reimbursement schedule. So can you tell me, is there a movement to try to make these a little bit more universal or will they always be a little bit nebulous?
Daniel Joyce: I think they're always going to be a little bit nebulous. There's no effort that I'm aware of that looks to change this in any way. The locality has changed. They reassess the localities and are updated. However, I mean, I think it's sort of ridiculous that Nashville, Tennessee reimbursement would be the same as Knoxville or you name it, any other city in Tennessee, there's obviously going to be some huge price differences there. But on the whole, malpractice is probably very similar in those two locations. So big chunks of what's making up the cost, it makes sense. So I can see why Congress would lump all of that in-
Sam Chang: All of Tennessee.
Daniel Joyce: In one state. And at some point it becomes so much administrative work to, if you looked at every, if there was let's say 20 localities per every state, it would just be way too complex. And I think probably introduce more error than what it's worth. But I do think there's more work to be done there, and we could do a better job of understanding the regional differences, especially in the rural areas. I think that's where the most focus needs to be paid.
Sam Chang: So the last question, Dan, is as a physician, what can we do? How can we advocate for at least a stabilization as opposed to decline? Or is there really not much we can do? Kind of put your hat on in terms of, okay, how do we advocate for physicians? How do we stop this trend? How do we show that our value hasn't decreased as the reimbursement has gone down?
Daniel Joyce: I think it's worth knowing that a lot of the changes that happened after the Balanced Budget Act of 1997 were motivated by physician backlash. And so you have a voice. You have a voice with your local legislators, you have a voice in Washington. There are many efforts that the AUA has in policy involvement that you can be a part of. I think it's, and I'm guilty of this, but it's easy to get disillusioned with politics and say, "I'm just going to put my nose down and do my work, and I'll let other people take care of that." But really, it takes all of us. It takes all of us to get involved, and ultimately, this is going to affect you.
This is going to affect your salary. This is going to affect how much work is demanded of you. But more importantly, outside of all of that, it's going to affect your patients because your patients are going to get worse access to care if things keep going this direction. And so I think just understanding the value it has for your patients, that this isn't a selfish thing that physicians are worrying about their bottom dollar. It's access to care, that's the bottom line here. And if you care about your patients, then that means caring about being involved in policy. That means writing your congressman a letter. That means getting involved in the AUA policy efforts or however you can to have a voice, because all of these policies are informed by physicians and shaped by physicians. So it's really important that we stay committed to that.
Sam Chang: Well, I think that's a really important message to end on. Dan, thanks for your efforts being the editor for the Health Policy Center of Excellence at UroToday. Clearly, your insights, your experience, and your work will be really important. It's already been impactful as well. As I know, you've looked at different impact of financial toxicity, disparities of care, et cetera. So look forward to seeing more of that from you and look forward to you, like I said, you helping me out tomorrow maybe in any case I've got. So thanks again, Dan.
Daniel Joyce: Thank you, Sam. Appreciate it.