Medicare: Payment Changes Are Needed for Assistants-at-Surgery
Released: 2004-01-13T00:00:00

Letter

Background

Assistants-at-surgery, who serve as members of surgical teams, perform tasks under the direction of surgeons and aid them in conducting operations. These tasks may include making initial incisions (“opening”), exposing the surgical site (“retracting”), stemming blood flow (“hemostasis”), surgically removing veins and arteries to be used as bypass grafts (“harvesting”), reconnecting tissue (“suturing”), and completing the operation and reconnecting external tissue (“closing”). Some of these tasks, like retraction, are relatively simple, while others, such as harvesting, are more complex. An assistant-at-surgery may perform one or more simple or complex tasks during an operation.

Tasks performed by others on the surgical team differ from those performed by assistants-at-surgery. Scrub staff work within the sterile field—the area within the operating room that is kept free from harmful microorganisms—passing instruments, sponges, and other items directly to the surgeon and assistant-at-surgery who work within the sterile field. Circulators work outside the sterile field, responding to the needs of team members within the sterile field. Anesthesiologists, or anesthetists, who administer and monitor anesthesia, painkillers, and other drugs, are also present during an operation.

Need for Assistants-at- Surgery Depends on Complexity of Operation, Condition of Patient

Decisions by a hospital or surgeon to use an assistant-at-surgery depend on the complexity of the operation and medical condition of the patient. Physician associations, such as the ACS and the American Society of General Surgeons, maintain that the surgeon should be responsible for determining if an assistant-at-surgery is needed, although some hospitals require the use of an assistant for certain surgical procedures. Hospitals that employ assistants-at-surgery may assign them to a procedure without consulting the surgeon performing the procedure.

Since 1994, the ACS, with other surgical specialty organizations, has conducted studies to determine which surgical procedures require physicians as assistants-at-surgery. These studies classify surgical procedures as “almost always,” “sometimes,” or “almost never” requiring an assistant-at-surgery. The 2002 study classifies approximately 5,000 surgical procedures, about 1,750 of which are designated as “almost always” requiring a physician to serve as an assistant-at-surgery.

A small number of surgical procedures have accounted for the majority of the assistant-at-surgery services paid for under the Medicare physician fee schedule: In 2002, 100 procedures accounted for almost 75 percent of the assistant-at-surgery services that Medicare paid under the physician fee schedule. ACS designated 81 of these procedures as “almost always” requiring a physician as an assistant-at-surgery, and the remaining 19 procedures were designated as “sometimes” requiring a physician as an assistant.

Medicare Pays for Assistants-at-Surgery as Part of PPS Payments to Hospitals and under the Physician Fee Schedule

Medicare pays for medically necessary services, including those performed by assistants-at-surgery, for eligible elderly and disabled patients provided by health professionals and institutions meeting certain requirements. Part A, or Hospital Insurance, pays for inpatient hospital care, care provided by certain other health care facilities, and some home health care. Part B, or Supplementary Medical Insurance, includes payment for the services and items provided by physicians, certain other nonphysician health professionals, suppliers, outpatient hospital departments, and home health care agencies.

Medicare makes payments to hospitals under part A through the hospital inpatient PPS for assistants-at-surgery. A fixed payment is made for all the inpatient hospital services, including assistant-at-surgery services, that a hospital provides to a beneficiary with a given diagnosis or receiving a particular type of surgery. Payments under the hospital inpatient PPS reflect the average bundle of services that beneficiaries with a particular diagnosis receive as inpatients in similar hospitals. The hospital’s payment for a bundle of services is the same regardless of whether an assistant-at- surgery is used or who provides the assistant-at-surgery services.

Prospective payment systems, such as the hospital inpatient PPS, are designed to promote efficiency: because the payment for a particular bundle of services is almost always the same, regardless of the services a particular patient receives, hospitals are discouraged from providing unnecessary services. Providing additional services would not increase their payments. Consequently, PPS payments to the hospital are sometimes less and sometimes more than the cost of providing care.

Payments are also made under the hospital inpatient PPS to teaching hospitals for providing GME to the residents employed by the hospital. In 2001, about 20 percent of the approximately 5,800 U.S. hospitals were considered teaching hospitals. In 2003, surgical residents comprised about 20 percent of all residents at these hospitals. There were about 7,500 residents in general surgery and about 13,000 more surgical residents training for specialties, such as orthopedics, all of whom were required to serve as assistants-at-surgery as part of their training. In addition to these surgical residents, some nonsurgical residents have surgical rotations during which they serve as assistants-at-surgery.

Medicare makes part B payments to assistants-at-surgery under the physician fee schedule when assistant services are performed by a physician or by a nonphysician health professional authorized to receive such payment. In 2002, these payments totaled about $158 million, less than 2 percent of the $10.5 billion Medicare paid to surgeons for surgical procedures that year. Medicare also makes global payments to surgeons under the physician fee schedule that cover the surgery and some pre- and postoperative services that the surgeons and their employees perform. Assistant-at-surgery services are not included in this bundle of services. Generally, the amount Medicare pays under the physician fee schedule is based on the resources needed to perform a service: the physician’s time and skill, practice expenses that include the costs of staff, equipment, and supplies, and the cost of liability insurance. While a surgeon’s global fee for a surgical procedure is set to reflect the resources required to perform the service, payments under the physician fee schedule for assistant-at- surgery services are not; they are calculated as a fixed percentage of the surgeon’s global fee. The percentage varies depending on the profession of the assistant-at-surgery. The Medicare physician fee schedule pays physicians more than nonphysician health professionals for assistant-at- surgery services (see table 1).

Medicare sets requirements that various health care institutions, suppliers, and professionals must meet to be paid by the program. Institutions, such as hospitals, must meet conditions of participation (CoP)—health and safety rules used to ensure quality of care. Until 1986, HCFA specified some requirements for assistant-at-surgery services in its hospital CoP. Hospitals were required to have physicians serve as assistants-at-surgery for procedures “with unusual hazard to life,” while “nurses, aides, or technicians having sufficient training to properly and adequately assist’’ could assist at “lesser operations.” In a broad revision of the hospital CoP in 1986, the agency eliminated these requirements: it said the purpose of the revisions to the surgical services section, which had included the assistant-at-surgery requirements, was to “delete the overly prescriptive details” about the operation of surgical services. CMS retains requirements for other surgical team members, including scrub and circulating staff.

CMS also establishes regulatory requirements for the health professions eligible to receive payment under the Medicare physician fee schedule. Members of that profession can be paid for providing covered services, including assistant-at-surgery services. Although CMS’s rules include the minimum requirements that these professionals must meet to receive payment for services, there are no specific requirements to receive assistant-at-surgery payments in Medicare regulations. General requirements include education, licensure, and certification; no surgical education or experience is mandated. For example, physician assistants must graduate from an accredited physician assistant education program, pass the National Commission on Certification of Physician Assistants certification examination, and be licensed to practice as a physician assistant, but do not have to have experience as an assistant-at-surgery.

Various Health Professionals Provide Assistant-at-Surgery Services, and Hospital Employees Provide Most of These Services

Members of a wide range of health professions serve as assistants-at- surgery. Hospitals employ residents, international medical graduates, and all the types of nonphysician health professionals who perform the role. Hospital employees likely serve as assistants-at-surgery for a majority of the procedures for which the ACS says an assistant is “almost always” necessary. The number of assistant-at-surgery services performed by physicians and paid for under the physician fee schedule has declined, while the number of such services performed by nonphysician health professionals eligible to receive payment under the physician fee schedule has increased.

Members of a Variety of Health Professions Serve as Assistants-at-Surgery

Physicians, residents in training for licensure or board certification in a physician specialty, several different kinds of nurses, and members of several other health professions serve as assistants-at-surgery (see table 2). Surgical associations state that surgeons or residents are preferred as assistants-at-surgery, but surgeons are often not available to assist at surgery.

Hospitals Employ the Full Range of Health Professions Whose Members Serve as Assistants-at-Surgery

Hospitals employ the gamut of health professionals who serve as assistants-at-surgery to perform the role. Some hospitals tend to hire assistants-at-surgery from a particular health profession, sometimes offering training courses in assistant services for that profession, to ensure that the hospital has a sufficient number of assistants. To encourage surgeons to use their operating rooms, hospitals may (1) employ assistants-at-surgery, eliminating the need for the surgeons to hire their own assistants, or (2) arrange for health professionals in independent practice to serve as assistants.

While teaching hospitals use residents as assistants-at-surgery, these hospitals may also hire nonphysician health professionals to perform the role. In a recent survey of neurosurgery residency program directors, nearly all cited the need to hire nonphysician health professional staff, such as physician assistants, in response to the weekly 80-hour work limit for residents. Teaching hospitals with other surgical specialty programs may also need to hire nonphysician health professionals as assistants-at- surgery because of the limit on resident hours.

Hospital Employees Likely Perform More than Half of All Assistant-at-Surgery Services

Because hospitals are not required to keep records on the use of assistants-at-surgery to receive Medicare payment under the inpatient PPS, the number and cost of such services provided by all hospital employees are unknown. Still, hospital employees likely serve as assistants-at-surgery for the majority of the surgeries performed on Medicare patients. In 2002, Medicare made payments under the physician fee schedule to assistants- at-surgery about 36 percent of the time that the program made payments to surgeons for the surgical procedures that ACS designated in its most recent study as “almost always” requiring an assistant-at-surgery. Since the remaining 64 percent of those surgical procedures were likely to have had assistants-at-surgery, hospital employees would likely have performed this role. In its final regulation revising the physician fee schedule for 2000, HCFA relied upon the results of the American Hospital Association’s (AHA) National Hospital Panel Survey that found that only 11 percent of responding hospitals said it was a regular practice for physicians to bring their own staff to the hospital to serve as assistants-at-surgery or to perform other functions. A representative of the AHA told us that most assistants-at-surgery, including residents and nonphysician staff, are hospital employees.

Nonphysicians Are Performing an Increased Share of Assistant-at- Surgery Services Paid under the Physician Fee Schedule

The percentage of assistant-at-surgery services paid to physicians under the physician fee schedule has declined, and the percentage of these services paid to nonphysician health professionals has increased, particularly since enactment of the Balanced Budget Act of 1997 (BBA). The act raised the amount paid for assistant-at-surgery services to these nonphysician health professionals under the physician fee schedule, extended billing by clinical nurse specialists and nurse practitioners to urban areas (such billing had been limited to rural areas), and allowed physician assistants to contract with surgeons to be an assistant without having to be employees of the surgeon. The number of assistant-at- surgery services paid for under the physician fee schedule and provided by nonphysician health professionals increased more than 200 percent from 1997 through 2002, while the number of services provided by physicians serving as assistants declined about 23 percent. During this period, the percentage of Medicare-paid assistant-at-surgery services performed by nonphysician health professionals increased by 25 percentage points (see fig. 1).

The amount paid to nonphysicians for these services has also increased. Prior to 1987, nonphysicians could not be paid as assistants-at-surgery. In 1997, nonphysicians were paid only $16 million for assistant-at-surgery services; in 2002, they were paid about $54 million. In comparison, physicians were paid $295 million for assistant-at-surgery services in 1986; $166 million in 1997; and $104 million in 2002.

Widely Accepted Professional Requirements for Assistants-at-Surgery Do Not Exist

There is no widely accepted set of standards for the education and experience required to serve as an assistant-at-surgery. The health care professions whose members provide assistant-at-surgery services have varying educational requirements. No state licenses all the types of health professionals who serve as assistants-at-surgery. And the licenses they issue typically attest to the completion of broad-based health care education, making them of limited value in determining which health professionals have the education and experience to serve as an assistant- at-surgery. Furthermore, the certification programs developed by the various nonphysician health professional groups whose members assist at surgery differ. We found that there was insufficient information about the quality of care provided by assistants-at-surgery—either generally or by members of specific health professions—to assess the adequacy of the requirements for a particular profession.

Health Professions Whose Members Assist at Surgery Have Varying Educational Requirements

The health professions whose members serve as assistants-at-surgery have varying educational requirements (see table 3). For example, a licensed practical nurse typically completes a 1-year educational program, while a clinical nurse specialist must have a master’s of science degree in nursing. In some cases, experience can substitute for education: orthopedic physician assistants may have associate degrees or certificates from military or nondegree programs or 5 years of experience working for an orthopedic surgeon.

State Licenses Typically Do Not Require Education and Experience as Assistants-at-Surgery

While state licenses for health professionals, including those eligible for payment as assistants-at-surgery under the physician fee schedule, typically have “scopes of practice” that include assistant-at-surgery services, education and experience as an assistant are not necessarily required to obtain a license: the licenses for these health professions attest to the completion of broad-based health care education, which may not include courses in surgery.

No state licenses all the health professions whose members assist at surgery in its jurisdiction. For example, orthopedic physician assistants and surgical assistants are licensed in only a few states. Only one state, Texas, has a specific assistant-at-surgery license. Members of different health professions may qualify for this license, which requires surgical education and experience. Nevertheless, a license is not required to serve as an assistant-at-surgery in Texas.

Nonphysician Health Professions’ Certification Programs for Assistants-at- Surgery Vary

Certification programs for assistants-at-surgery generally require completion of a certain level of education or experience and passage of an examination. Each certification program created by a group of nonphysician health professionals for its members who serve as assistants-at-surgery has different requirements (see table 4). Certification programs for some nonphysician health professions not eligible for payment under the physician fee schedule are for a wide range of surgical services; others are specific to a particular type of surgery. For example, a CRNFA, in addition to being licensed as a registered nurse and earning a bachelor’s degree in nursing, must obtain certification as an operating room nurse, complete an approved program, have 2,000 hours of experience as an assistant-at-surgery, and pass an examination. For a surgical technologist to receive certification as an assistant-at-surgery, he/she must have a surgical technologist certification, complete an approved program or have 2 years of experience as an assistant, and pass the examination.

Certifications for those who are eligible for payment under the physician fee schedule as an assistant-at-surgery are typically for a broad range of services and are not specifically surgery-related. For example, the American Nurses Credentialing Center awards certifications to nurse practitioners for acute, adult, family, gerontological, pediatric, adult psychiatric and mental health, and family psychiatric and mental health care.

No National Consensus on Requirements for Assistants-at-Surgery Exists

While some national physician and accreditation organizations say assistants-at-surgery should have to meet some requirements, there is no consensus about what those requirements should be. For example, ACS has stated that when surgeons or residents are unavailable to serve as assistants-at-surgery, nonphysician health professionals should be allowed to perform the role if they meet the “national standards” for their health profession or have “additional specialized training.” Similarly, the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), a private organization that accredits health care organizations, including hospitals, requires hospitals to credential their staff (i.e., establish requirements, such as licensure, certification, and experience for physicians and certain nonphysician health professionals) and ensure that those requirements are used when personnel decisions are made. But JCAHO does not suggest the type or length of education or experience to be used in credentialing hospital staff who serve as assistants-at-surgery.

Literature on Assistants-at- Surgery Is Insufficient to Evaluate Quality of Care

We found little evidence about the quality of care provided by assistants- at-surgery. Our February 2003 search of relevant literature maintained by the National Library of Medicine found only six articles dealing with the quality of care provided by assistants-at-surgery. None of the articles compares the quality of assistant-at-surgery services provided by one nonphysician health profession with that provided by another nonphysician health profession or physicians, and only one deals specifically with the influence of assistants on surgical outcomes.

While Medicare Payments for Assistant-at-Surgery Services Have Flaws, Paying Hospitals for All These Services Would Correct Them

There are three flaws in Medicare’s policies for paying assistants-at- surgery that prevent the payment system from meeting the program’s goals of making appropriate payment for medically necessary services by qualified providers. First, because Medicare pays for assistant-at-surgery services under both the hospital inpatient PPS and the physician fee schedule, and hospital payments for surgical care are not adjusted when an assistant receives payment under the physician fee schedule, Medicare may be paying too much for some hospital surgical care. Second, paying a health professional under the Medicare physician fee schedule to be an assistant-at-surgery, instead of including this payment in an all-inclusive payment, gives neither the hospital nor the surgeon an incentive to use an assistant only when one is medically necessary. Third, the distinctions between those health professionals eligible for payment as an assistant-at- surgery under the physician fee schedule and those who are not eligible are not based on surgical education or experience as an assistant. Criteria for determining who should be paid as assistants-at-surgery under the physician fee schedule do not exist. However, hospitals are responsible under health and safety rules to provide quality care for their patients.

Medicare Payments for Assistants-at-Surgery Are Flawed

Medicare’s policy of paying hospitals for the services associated with inpatient surgical care that may include assistant-at-surgery services and also paying physicians and certain nonphysician health professionals for those services is flawed. When Medicare pays under the hospital inpatient PPS and under the physician fee schedule for assistant-at-surgery services delivered to a particular patient, Medicare may pay too much for the assistant services because the hospital is not paid less when the assistant receives payment under the physician fee schedule. In addition, a hospital that uses an assistant-at-surgery who is eligible for payment under the physician fee schedule has a financial advantage in the form of lower labor costs over a hospital that uses assistants who cannot be paid under the physician fee schedule.

Given the discretion that hospitals and surgeons have in determining when and how an assistant-at-surgery is used, it is especially important that Medicare’s payment policy create incentives to help ensure that assistant services are provided for Medicare patients only when medically necessary. Allowing physician fee schedule payments to certain assistants-at-surgery, however, creates an incentive for hospitals to use them, rather than those who cannot be paid under the fee schedule. Because neither the hospital nor the surgeon incurs a cost when an assistant-at-surgery is paid under the physician fee schedule, neither has a financial incentive to use an assistant only when one is necessary. The lack of this incentive is of concern because assistant-at-surgery services receive little review to determine the medical necessity of the services. A 2001 report by the Department of Health and Human Services Office of Inspector General found that most contractors used by Medicare to pay for part B services do not have any mechanism to ensure that assistant-at- surgery requests for payment for nonphysician health professionals are reviewed for medical necessity before they are paid. Medicare routinely requires submission of documentation of medical necessity for medical review for only 1 percent of assistant-at-surgery services paid under the physician fee schedule.

Because the requirements for those authorized to be paid as assistants-at- surgery under the Medicare physician fee schedule do not include assistant-at-surgery education or experience, payments can be made to assistants with no such education or experience. For example, about 23 percent of physician assistants work in surgical specialties. Other physician assistants working in nonsurgical specialties, however, may be paid as assistants-at-surgery under the Medicare physician fee schedule, and their only surgical experience may be a 6-week surgical rotation. On the other hand, nonphysician health professionals, such as surgical technologists, CRNFAs, and orthopedic physician assistants, all of whom have certification programs requiring education and experience as an assistant-at-surgery, cannot be paid by Medicare for their services under the physician fee schedule.

One way to address a concern associated with the physician fee schedule payments for assistants-at-surgery is to expand the number of nonphysician health professions eligible for payment. But this would not ensure that only those with the appropriate education and experience serve as assistants-at-surgery unless CMS also sets standards for all those who serve as assistants. There is no consensus, however, on what such standards should include.

Bundling Payments for Assistant-at-Surgery Services into Hospital Payments Would Be Preferable to Bundling into Surgeons’ Fees

Bundling all payments for assistants-at-surgery into either the inpatient hospital PPS or the surgeon’s global fee would address the flaws of the current payment system. The possibility of paying too much for assistant- at-surgery services would be eliminated because Medicare would make only one payment—to either the hospital or the surgeon—for the service. The hospital or surgeon would have a financial incentive to use the most appropriate assistant-at-surgery—and to use one only when necessary— because the payment would be the same regardless of whether an assistant was used. The lack of a relationship between the nonphysician health professionals eligible for assistant-at-surgery payments under the physician fee schedule and their education and experience would be moot because payments would no longer be made to individuals performing the role; payments would be made, as part of a larger payment for a bundle of services, to hospitals or surgeons, who would have the responsibility to determine the education and experience that an assistant-at-surgery needs and when an assistant is needed.

Folding payments for assistant-at-surgery services into inpatient PPS payments has some advantages that would not accrue if payments were folded into the surgeon’s global fee. Hospitals would continue to have incentives to use assistants-at-surgery when they are necessary, and to use the most appropriate assistant. Hospitals are already responsible—under the hospital CoP—for ensuring the health and safety of their patients and that necessary services are provided, including assistant-at-surgery services. Most hospitals already have credentialing processes for their employees. Also, since hospitals likely employ most assistants-at-surgery, limiting payments for assistant services to those made under the inpatient PPS would disrupt the employment relationships for far fewer assistants than would be the case if payment was made to surgeons.

There is precedent for Congress approving legislation that no longer allows a service to be paid for separately under part B, but instead requires that the service be included in a bundle of services under part A. In 1997, Congress passed legislation that requires virtually all kinds of services or items furnished to beneficiaries residing in skilled nursing facilities (SNF) that had been paid for separately under part B, instead be included in a bundle of services paid for under part A. Prior to implementation of the provision, SNFs could permit a nonphysician health professional or supplier to seek payment under part B for ancillary services or items furnished directly to SNF residents, as long as the SNF did not include the service or item in its part A bill. The legislation, however, prevents this “unbundling” by including in Medicare SNF PPS payments ancillary services or items a SNF resident may require that previously had been paid under part B.

Bundling assistant-at-surgery services into the package of services covered by the surgeon’s global payment based on the Medicare physician fee schedule has significant drawbacks. First, because the amount paid under the inpatient hospital PPS for assistants-at-surgery is unknown, the total amount to be added to the physician fee schedule for providing assistants is unknown. Second, a payment amount for assistant-at-surgery services would have to be determined for each surgical procedure. Since data are not collected on how often each surgeon uses assistants-at-surgery for each surgical procedure, the bundled payment would presumably include an allotment for the expected average cost of assistants for all surgeons performing the procedure. Using this approach, surgeons with an unusually high number of procedures requiring assistants would be paid too little, while those with an unusually low number of procedures requiring assistants would be paid too much. In addition, a surgeon would have a financial incentive to use an assistant-at-surgery less frequently for surgical procedures for which ACS says that an assistant may be needed, even when the condition of the beneficiary indicates that an assistant would be desirable. Because there is a difference in costs to a surgeon depending on whether an assistant-at-surgery is used, a surgeon’s bundled payment amount could be adjusted when an assistant is used. Doing so, however, would provide no financial incentive for surgeons to use an assistant-at-surgery only when one is medically necessary.

Conclusions

Decisions to use an assistant-at-surgery should not be influenced by payment; they should be based on medical necessity. The majority of assistants-at-surgery are likely employed by hospitals, where the inpatient hospital PPS pays for their services. If Congress were to consolidate Medicare physician fee schedule payments for assistant-at-surgery services into the inpatient hospital PPS, this would give hospitals an incentive to use assistants only when they are necessary. Meanwhile, the hospital CoP would continue to give hospitals an incentive to assure that the most appropriate assistants-at-surgery are used as part of their responsibility to provide quality care for their patients. Paying for assistants under the physician fee schedule provides no such incentive.

Matter for Congressional Consideration

We suggest that Congress may wish to consider consolidating all Medicare payments for assistant-at-surgery services under the hospital inpatient prospective payment system.

Agency Comments

We received comments on a draft of this report from CMS, which agreed that payment policy for assistants-at-surgery could be improved. CMS noted that it would be helpful to describe the ongoing review process that CMS uses to assign relative values to physician fee schedule services. However, as we state in this report assistants-at-surgery are not paid on the basis of the resources they use to perform their work, but are instead paid a percentage of the amount paid the surgeon. CMS also discussed several details related to implementing payment changes for assistants-at- surgery. Addressing these points was beyond the scope of this report. CMS’s comments appear in appendix II. In addition, we obtained oral comments on a draft of this report from representatives of the American Medical Association, the American College of Surgeons, the American Society of General Surgeons, the American Association of Orthopaedic Surgeons, the Society of Thoracic Surgeons, the American Academy of Nurse Practitioners, the American Academy of Physician Assistants, the Association of periOperative Registered Nurses, and the American Hospital Association. We have modified the report, as appropriate, in response to their comments.

We are sending copies of this report to the Acting Administrator of CMS, appropriate congressional committees, and other interested parties. We will also make copies available to others upon request. This report will be available at no charge on GAO’s Web site at http://www.gao.gov.

If you or your staffs have any questions about this report, please call me at (202) 512-7101. Lisanne Bradley and Michael Rose were major contributors to this report.

Appendix I: Professional Associations, Schools, and Hospitals

Appendix II: Comments from the Centers for Medicare & Medicaid Services