Application of Total Care Time and Payment perUnit Time Model for Physician Reimbursement forCommon General Surgery OperationsAbhishek Chatterjee, MD, MBA, Stefan D Holubar, MD, FACS, Sean Figy, BS, Lilian Chen, MD,Shirley A Montagne, MBA, Joseph M Rosen, MD, Joseph P Desimone, MD

BACKGROUND: The relative value unit system relies on subjective measures of physician input in the care ofpatients. A payment per unit time model incorporates surgeon reimbursement to the total caretime spent in the operating room, postoperative in-house, and clinic time to define payment perunit time. We aimed to compare common general surgery operations by using the total caretime and payment per unit time method in order to demonstrate a more objective measurementfor physician reimbursement.

STUDY DESIGN: Average total physician payment per case was obtained for 5 outpatient operations and 4inpatient operations in general surgery. Total care time was defined as the sum of operative time,30 minutes per hospital day, and 30 minutes per office visit for each operation. Payment per unittime was calculated by dividing the physician reimbursement per case by the total care time.

RESULTS: Total care time, physician payment per case, and payment per unit time for each type ofoperation demonstrated that an average payment per time spent for inpatient operations was$455.73 and slightly more at $467.51 for outpatient operations. Partial colectomy with pri-mary anastomosis had the longest total care time (8.98 hours) and the least payment per unittime ($188.52). Laparoscopic gastric bypass had the highest payment per time ($707.30).

CONCLUSIONS: The total care time and payment per unit time method can be used as an adjunct to comparereimbursement among different operations on an institutional level as well as on a national level.Although many operations have similar payment trends based on time spent by the surgeon,payment differences using this methodology are seen and may be in need of further review.

( J Am Coll Surg 2012;214:937–942. © 2012 by the American College of Surgeons)

op

Currently, physician reimbursement is determined by anequation that uses relative value units (RVU) associatedwith Current Procedural Terminology (CPT) codes. Thismethod, developed in the late 1980s, attempted to incor-porate physician work, expenses incurred by the physicianand hospital, and physician and hospital liability for indi-vidual services rendered. When the physician work com-

Disclosure Information: Nothing to disclose.Abstract presented at the American College of Surgeons 97th Annual ClinicalCongress, Surgical Forum, San Francisco, CA, October 2011.

Received December 26, 2011; Revised February 5, 2012; Accepted February6, 2012.From Department of Surgery, Division of Plastic Surgery (Chatterjee, Rosen),Division of General Surgery (Holubar), and Division of Cardiothoracic Sur-gery (Desimone), Dartmouth-Hitchcock Medical Center, Dartmouth, NH(Montagne); University of Toledo, College of Medicine, Toledo, OH (Figy);and the Department of Surgery, Division of General Surgery, The LaheyClinic, Burlington, MA (Chen).Correspondence address: Abhishek Chatterjee, MD, MBA, Dartmouth-

tHitchcock Medical Center, One Medical Center Dr, Lebanon, NH 03756.email: abhishek.chatterjee@hitchcock.org

937© 2012 by the American College of SurgeonsPublished by Elsevier Inc.

ponent of the RVUs is assigned to an operation, consider-ation is given to various aspects of the care provided,including time, technical skills, mental and physical effort,judgment, and stress related to potential patient risk.1-3

Considering the complex, dynamic, ever-changing land-scape of medicine, the American Medical Association andspecialty societies formed the RVU Update Committee(RUC) to recommend changes in payment for differentCPT codes to the Centers for Medicare and Medicaid Ser-vices (CMS).2 The RUC makes recommendations basedon specialty-based surveys to members regarding each oftheir services rendered; however, these surveys are con-sidered subjective and may be plagued by poor partici-pation and recall bias.4 Many have called for creation ofan objective measure to help guide the RUC in itsrecommendations.

Martin and coworkers (2010)2 described a novel methodf evaluating physician payments for common vascularrocedures based on time spent on each case to quantify the

ime component of RVU. They found a striking difference

ISSN 1072-7515/12/$36.00http://dx.doi.org/10.1016/j.jamcollsurg.2012.02.003

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938 Chatterjee et al Payment per Unit Time in Surgery J Am Coll Surg

between reimbursement of open procedures comparedwith endovascular procedures, with the latter being paid ata rate approximately 175% that of the former ($316/hr vs$556/hr, respectively). Although these data did not takeinto account other differences or intangible time incurredduring the operative planning and administrative compo-nents of these procedures, it did indicate that further con-sideration is needed to optimize physicians reimbursed in afair manner. Total care time (TCT) and payment per unittime (PPUT), as described by Martin and colleagues,2 at-empt to add objectivity to the determination of surgeonffort, a fundamental aspect in the calculation of a sur-eon’s RVU reimbursement scheme. The goal of this studyas to apply TCT and PPUT methodology to assess vari-

tions in reimbursements among commonly performedeneral surgery operations.

METHODSPhysician payments per case were recorded over the 2010financial year for 9 common general surgery operations (4traditionally inpatient procedures and 5 traditionally out-patient procedures) at our tertiary care health center. Datafor physician payments were obtained using Medicare andprivate insurance data. Average length of stay in days andaverage number of follow-up appointments was calculatedfor each procedure. An estimate of 30 minutes of care timewas imputed for each hospital day and each follow-up of-fice visit. This was added to the average operative time (asopposed to total anesthesia time) for the associated opera-tion to determine the TCT:

Total Care Time in hours � Incision Time

� Postoperative Days (0.5 h) � Follow-up Days (0.5 h)

Payment per unit time was calculated by dividing thephysician reimbursement per case by the average TCT ofeach procedure:

Payment per Unit Time in dollar �Physician Reimbursement

Total Care Time

RESULTSOver a 1-year period, 844 single CPT code cases were

Abbreviations and Acronyms

CPT � Current Procedural TerminologyPFP � payment for performancePPUT � payment per unit timeRUC � RVU Update CommitteeRVU � relative value unitTCT � total care time

performed (312 inpatient cases and 532 outpatient cases), a

all of which were paid using Medicare reimbursementschedule. The total number of cases, operative time, post-operative care days, and follow-up days, as well as physicianpayment per case for individualized CPT codes for bothinpatient and outpatient procedures are shown in Table 1.Average reimbursement was $455.73/hour for commoninpatient operations and $467.51/hour for common out-patient operations. The largest payment per unit time dif-ference among inpatient elective general surgery operationsoccurred between laparoscopic gastric bypass surgery($707.30/hour) and partial colectomy with anastomosis($188.52/hour). Among outpatient elective operations,the largest PPUT difference occurred between completethyroidectomy ($693.97/hour) and umbilical hernia repair($321.25/hour).

DISCUSSIONPhysician reimbursement has become a subject of intensediscussion in the recent years.5 With current budget con-traints and possible cuts to Medicare and Medicaid reim-ursements, increasing the objectivity in our reimburse-ent mechanisms is important in justifying a surgeon’s

ayment. Although TCT by itself does not fully indicateow much surgeon effort each operation entails, it doesbjectively describe the overall time a surgeon must dedi-ate to a patient once an operation commences.

Our analysis of common in- and outpatient proceduresound little difference between the average reimbursementer unit time between inpatient and outpatient cases.owever, within the inpatient group, variation in reim-

ursement existed. Laparoscopic Roux-en-Y gastric bypassad a PPUT of $707.30/hour; partial colectomy with anas-omosis averaged at $188.52/hour. This could be in partue to the difference in TCT between the two procedures4.72 hours vs 8.98 hours, respectively); however, physi-ian payment was also a significant contributor to the dis-arity, with the laparoscopic gastric bypass being reim-ursed at nearly double that of the partial colectomy withnastomosis ($3,335 vs $1,693, respectively). One couldrgue that the laparoscopic techniques require added skillnd this causes the difference in reimbursement; however,ellowships are available for both minimally invasive sur-ery and colorectal surgery, indicating that both skills re-uire additional training for mastery. Such variations be-ome apparent in reimbursement, demonstrating theenefit of using PPUT methodology; however, resolvinguch variations in reimbursement in an effort to createayment fairness requires further review of CPT codes andssociated RVUs by the respective specialty societies, RUC,

nd outcomes researchers.

O

939Vol. 214, No. 6, June 2012 Chatterjee et al Payment per Unit Time in Surgery

The fee-for-service mechanism of reimbursement cur-rently in place, on which the RVU system is largely based,rewards physicians’ operative output based on the numberof operations performed. It also presents a potential con-flict of interest because follow-up is bundled and not reim-bursed independently of the operation. Follow-up dayshave the potential of being viewed as “un-reimbursed”work. Incorporation of the PPUT into reimbursementmodels reward on the intensity of care including both op-erative and postoperative management. It removes that po-tential conflict of interest involved in limiting postopera-tive follow-up. On the other hand, a danger does exist inthat TCT and PPUT may actually create a different con-flict of interest by rewarding increased follow-up care; how-ever this potential conflict would likely be mitigated by theneed to use precious clinic time with new, potentially op-erative, patients in a timely manner.

This study extends the work of Martin and associates2

and adds incrementally to the literature on TCT andPPUT. These methods appear better able to account for theactual effort (time) spent and intensity of care required tocare for patients with postoperative complications, com-pared with the present RVU system. Using postoperativedays spent in the hospital as part of the calculation forTCT,one can assume that postoperative complications wouldlengthen the stay, which would reflect in a higher TCTindicating that more time for a particular operation is beingspent on average by a surgeon in caring for the patient.Ideally, better reimbursement should be allotted for thisexpenditure of work to prevent a low PPUT. An example ofthis would be a patient who had a colectomy performedand in the postoperative hospital stay experienced an ileus(not necessarily a preventable outcome), which requiredthe patient to spend more days in the hospital and subse-

Table 1. Reimbursement by Inpatient and Outpatient CPT

CPT code Operation nIncision timeper case, h

Pper

Inpatient

43280 Laparoscopic Nissen fundoplasty 132 2.49 1.

43644 Laparoscopic surgery gastric restrictiveprocedure with bypass

93 3.27 1.

44140 Colectomy partial with anastomosis 28 3.53 8.

44970 Laparoscopic appendectomy 59 1.34 1.

utpatient

47563 Laparoscopic cholecystectomy withcholangiogram

135 1.59 0.

49505 Hernia repair inguinal 75 1.40 0.

49585 Hernia repair umbilical 41 1.22 0.

60240 Thyroidectomy complete 103 1.75 0.

19301 Mastectomy partial w axillarydissection gen

178 1.01 0.

CPT, Current Procedural Terminology; POD, postoperative day.

quently more effort expended by the surgeon to attend to

the patient. In order to prevent a low PPUT given a typi-cally high TCT, an argument could be made for betterreimbursement for that particular operation. The potentialdanger of keeping patients in order to increase reimburse-ment associated with a longer hospitalization would miti-gated by national benchmarking.

The incorporation and use ofTCT and PPUT may presentseveral questions. The application of these measures uses cur-rent data and assumes that physician efficiency and due dili-gence in postoperative management not be abused. Currentfee-for-service, CPT-driven reimbursements do reward effi-cient care and treatment because more operations lead togreater fee payments. Solely using a PPUT mechanism maycause a decrease in physician efficiency as the time in theoperating room is used for payment, rather than number ofcases completed. Relying only on PPUT for reimbursementremoves the incentive for expeditious and efficient time usethat fee-for-service generates. In order to prevent abuse ofTCT and PPUT, national average TCTs for operations basedon large databases of operations and/or national society sur-veys on how long operations take to perform, can be used asbenchmark standards to compare variation of TCTs at insti-tutional levels. Any consistent standard deviation variation inTCTs can then be used as a quality improvement measure todetermine either inherent geographic patient population dif-ferences or a need for surgical systems-based improvements onthe part of the surgical team.

Additionally, in the present medical cost containmentclimate that values efficiency, TCT and PPUT methodol-ogy does not address payment for performance (PFP) nordoes it credit a surgeon for behavior modifications that mayreduce overall medical cost. PFP is a much debated topicwith a goal to create greater conformity to a standard of careby rewarding or potentially not penalizing doctors who are

sFollow-up

per case, dAdditional

hours per caseTotal care

time, hMD paymentper case, $

Payment per totalcare time, $/h

1.2 1.19 3.67 1,767.67 481.48

1.1 1.45 4.72 3,335.25 707.30

2.2 5.45 8.98 1,693.07 188.52

1.0 1.14 2.47 1,101.80 445.61

0.9 0.73 2.32 1,254.87 541.69

1.3 0.97 2.36 771.70 326.75

1.1 0.95 2.17 697.45 321.25

1.0 0.83 2.58 1,793.54 693.97

0.7 0.40 1.41 639.15 453.89

CodeODcase

13

83

68

24

53

68

80

67

11

compliant in reaching set goals that define standards of care

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940 Chatterjee et al Payment per Unit Time in Surgery J Am Coll Surg

in practice. However, several studies have failed to show arelationship with PFP and actual improvement in healthcare.6-8 Also, the use of TCT and PPUT in physician reim-ursement does not prevent one from also using PFP in theeimbursement of a surgeon’s work. With regard to credit-ng a surgeon’s behavior modification that leads a to reduc-ion of overall medical costs, studies show that a surgeonhoosing to use a particular technology over another orhoosing to operate in one particular operative settingsuch as an office) over another (such as the main operatingoom), may reduce costs for the health care system.9,10 TCT

and PPUT alone do not address rewarding such behavior;however, we propose that TCT and PPUT methodologyshould be used as an adjunct along with other evaluationmethods that address efficiency when evaluating the re-wards for a surgeon. No single methodology in the presentsystem encompasses and acknowledges every aspect of ef-fort that a surgeon expends. TCT and PPUT methodolo-gies attempt to objectively measure specifically the physi-cian’s effort in the context of the present day RVU.

The main strength of TCT and PPUT models is thatthey add a degree of objectivity to a somewhat nebulouspayment determination mechanism. However, a potentiallimitation is that they neglect the intangible components ofthe RVU, namely, physician expertise, judgment and intra-operative decision making, stress incurred during the pro-cedure, and technical skill. The purpose of this study was tointroduce the concepts of TCT and PPUT as possible ad-juncts in objectively evaluating the value of a CPT codewhen an RVU is assigned to it. At present, the physician’s timeaspect of an RVU is measured using physician surveys ques-tioning how much time is spent on a particular operation(Fig. 1).11 Surveys can be plagued by poor participation andrecall bias.4 Importantly, TCT and PPUT measures have nouch bias and are more objective measurements based on theirremise of real world documented operative time

A potential criticism of the TCT and PPUT methodol-gy may be that reimbursing the surgeon for postoperativeare in addition to intraoperative care would lead to in-reased health care costs, which would be counterproduc-ive to society in the present economic climate. This criti-ism is flawed on several levels. First, the present RVUeimbursement system already attempts to reimburse thephysician’s work” but estimates this work in a subjectiveashion largely based on surveys. The purpose of this studyas to determine whether there was a basis for a morebjective valuation of “physician’s work” so that operationsould be reimbursed more fairly in comparison to eachther using PPUT and TCT numbers to highlight discrep-ncies. Second, the issue of fairness and reimbursement

ased on work performed is a common standard in most

usiness reimbursement schemes with regard to fair pay-ent for work done.12 Finally, the Balanced Budget Act of

997 set a precedent for budget neutrality when it came toncreases in payments, assuring that any increases in oneype of RVU would lead to decreases in other RVUs so as toreate a zero sum game and a budget neutral conclusion.13

TCT and PPUT methodology for reimbursement maybe used for established CPT codes but cannot be usedimmediately for new technology that creates new surgicaltechniques given the lack of established average operativetimes and the learning curve that comes with new technol-ogy. As time passes, the learning curve plateaus and average

Figure 1. Present day review system for a relative value unit (RVU).CPT, Current Procedural Terminology; RVS, relative value scale.

operative times become more reliable, and TCT and PPUT

941Vol. 214, No. 6, June 2012 Chatterjee et al Payment per Unit Time in Surgery

methodology can estimate value for that particular opera-tion. But until then, older valuation methods using surveysand more subjective estimates would be the choice for theRVU valuation of the CPT code.

In order to demonstrate the use of TCT and PPUT ingeneral surgery, our study simplified the methodology byusing elective operations with single CPT codes. A poten-tial limitation for using TCT and PPUT for all operationsis that many operations in general surgery involve multipleCPT codes and are acute and emergent in nature. There-fore, significant impediments exist to using TCT andPPUT methodology in more complex, acute, multipleCPT code operations and require further study. In asystem using TCT and PPUT, a surgeon using multipleCPT codes for an operation would have to document andestimate what percentage of time spent in the operationbelonged to that CPT code, from which TCT and PPUTcould be estimated. This does create a potential bias in thatthe surgeon uses his or her best judgment in estimating andjudging operative time. However, as theTCT, PPUT meth-odology becomes more accepted, it is conceivable that na-tional specialty societies would take it on themselves toestimate average times for CPT codes using large databases,such as the Nation Surgical Quality Improvement Program(NSQIP) averages in order to provide a benchmark timeagainst which to compare institutional data.

Another limitation to this study design is that it is asingle institution-based report of cases during a 1-year spanwhen estimating TCT and PPUT for 9 common generalsurgery operations using Medicare and private insurancedata. Although there was subjectivity in choosing the op-erations studied, our goal was to attempt to choose opera-tions from different areas of general surgery that were com-monly done at our institution. This specific choice in thetypes of operations or the payer mix may not be fully gen-eralizable to other institutions in the country, but our goalwas mainly to introduce the concept of TCT and PPUT tothe general surgery literature so that institutions can thenuse this methodology to assess their own operations usingtheir own payer mixes with regard to value and equality ofreimbursement. On a more national level, the next step forsurgical specialty societies would be to calculate TCT andPPUT for commonly used CPT codes and see if reimburse-ments are relatively fair within categories of operations. Ifnot, then recommendations or calls for review should bemade to the RVU Update Committee (RUC), which ad-vises and substantially influences the Centers for Medicareand Medicaid Services on CPT code changes includingRVU evaluation (Figs. 1 and 2).

Lastly, 30 minutes was arbitrarily assigned as the time

spent by the doctor with the patient per day per postoper-

ative day or postoperative clinic day. Given that clinic ap-pointments at our institution vary between 15 minutes and60 minutes depending on the anticipated level of complex-ity, 30 minutes was thought to be a reasonable average ofthe time spent in evaluation of the patient. Assumed tasksin these 30 minutes would not only include the daily directinteraction with the patient on rounds but would also in-clude the computer or paper note writing time and the timechecking on laboratory work and formulating a plan.Theremay be times when patients would require more or lessthan 30 minutes and as technology improves, rounding onpatients may require on average less than 30 minutes.

CONCLUSIONSTCT and PPUT provide an objective measurement of sur-geon effort expenditure and intensity of care and may be auseful adjunct to determine optimal physician reimburse-ment. Consideration should be given in using theTCT andPPUT method when assessing the relative value of oneoperation compared with another.

Author ContributionsStudy conception and design: Chatterjee, Holubar, Figy,

Montagne, Chen, Rosen, DesimoneAcquisition of data: Chatterjee, Montagne, Figy, ChenAnalysis and interpretation of data: Chatterjee, Holubar,

Figy, Montagne, Chen, Rosen, DesimoneDrafting of manuscript: Chatterjee, Holubar, Figy, Mon-

tagne, Chen, Rosen, DesimoneCritical revision: Chatterjee, Holubar, Figy, Montagne,

Chen, Rosen, Desimone

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