Characteristics of Medicare Payments to Dermatologists in 2013

Dermatologists provide many types of medical and procedural services, yet little is known about how Medicare payments to dermatologists vary by the type of service performed. In April 2014, the Centers for Medicare & Medicaid Services released the Medicare Provider Utilization and Payment Data: Physician and Other Supplier Public Use File (POSPUF).¹ For the first time, the public had access to Medicare payments to health care professionals. Although these payments are not sufficient to determine value, physician payments are part of the value equation and will be a continued source of scrutiny. This study examines the characteristics of Medicare payments to dermatologists.

We used the 2013 Medicare POSPUF, which contains Part B noninstitutional claims for office-based services and procedures delivered by physicians and nonphysician clinicians.¹ The database captures payments and submitted charges organized and aggregated by the National Provider Identification number, Healthcare Common Procedure Coding System code, and place of service. Combinations of National Provider Identification numbers and procedure codes with 10 or fewer beneficiaries are excluded by the Centers for Medicare & Medicaid Services to protect the beneficiaries’ privacy. Payments to health care professionals were defined as the mean Medicare-allowed amount for each procedure, including payments to the physician by Medicare, the beneficiary, and any amount paid by a third party (eg, supplemental insurance). We grouped services as evaluation and management (E/M); biopsy; Mohs micrographic surgery (herein after referred to as Mohs); shave removal; destruction of benign lesions; destruction of malignant lesions; and destruction of premalignant lesions; benign excision; malignant excision; flaps and grafts; injection; repair; pathologic evaluation; and other. We summarize mean payments by service category. We also identify the relative use of services across dermatologists by their level of allowed Medicare payments in the year. This study was exempt from approval by the institutional review board of The University of North Carolina at Chapel Hill, with no need for informed consent for this public data source.

A total of 10 726 dermatologists were identified in the database, representing 1.2% of all health care professionals and 3% of total Medicare payments ($3.04 billion of approximately $100 billion). Median payment per dermatologist was $171 397. Mean reimbursement for E/M was $77.59 per unit, whereas Mohs received a mean per-procedure reimbursement of $457.33 per unit. Among dermatologists, 98.9% received an E/M payment and 19.9% received Mohs-related payments (Table 1). Total payment to dermatologists was highest for E/M ($756 million), followed by Mohs ($550 million) and destruction of premalignant lesions ($516 million). Compared with lower-billing dermatologists, top-billing dermatologists received a higher proportion of payments from Mohs and flaps/grafts and a lower proportion from E/M (Table 2). The top 15.9% of dermatologists received more than half of total payments.

The POSPUF provides a nationally representative sample that is publicly available and has been previously used in the evaluation of other medical and surgical specialties.^2-4 For dermatologists, procedures were the dominant source of payment. The most frequent service provided was treatment of precancerous lesions, accounting for 22.6% ($516 million) of non-E/M payments. Top-billing dermatologists received a higher percentage of payments for Mohs, which has been scrutinized for its expense and the rapid increase in its use.⁵ Of the surgical procedures associated with skin cancer treatment, Mohs was the most frequently billed, accounting for 55% of procedures, followed by 28.8% for destruction of malignant lesions, and 16.2% for excision of malignant lesions. Considering the recent Appropriate Use Criteria for Mohs,⁶ this study may signal an opportunity to reflect on the use of Mohs within this elderly population.

Given the limited patient information associated with POSPUF, definitive interpretation regarding propriety of services cannot be made. In addition, this population includes patients almost exclusively older than 65 years; thus, the distribution of codes may not reflect that of the entire US patient population. For most physicians, Medicare patients only represent a portion of their practice population. However, in the changing reimbursement landscape, dermatologists will be under increased pressure to demonstrate the value of the services they provide. This possibility is especially salient given the increasing incidence and cost associated with skin cancer.⁷

Corresponding Author: Adewole S. Adamson, MD, MPP, Department of Dermatology, The University of North Carolina at Chapel Hill, 250 Bell Tower Dr, Genome Science Building, Campus Box 7287, Chapel Hill, NC 27599 (adewole@med.unc.edu).

Accepted for Publication: August 24, 2016.

Published Online: November 16, 2016. doi:10.1001/jamadermatol.2016.3948

Author Contributions: Dr Adamson had full access to all the data in the study and take responsibility for the integrity of the data and the accuracy of the data analysis.

Study concept and design: Adamson.

Acquisition, analysis, or interpretation of data: Both authors.

Drafting of the manuscript: Adamson.

Critical revision of the manuscript for important intellectual content: Both authors.

Statistical analysis: Both authors.

Obtained funding: Adamson.

Administrative, technical, or material support: Both authors.

Study supervision: Adamson.

Conflict of Interest Disclosures: None reported.

Additional Contributions: Tania M. Wilkins, MS, Gillings School of Global Public Health, The University of North Carolina at Chapel Hill, assisted with statistical analysis for this study. She was not compensated for this work.