Abstract
Importance:
In January 2023, the Centers for Medicare and Medicaid Services (CMS) made major changes to reimbursement policy for abdominal wall hernia repairs, including removal of postoperative global periods. Similar changes have been proposed for other common surgical procedures (e.g., colectomy). The impact of this policy reform on spending remains unclear.
Objective:
To evaluate the association between the 2023 CMS ventral hernia repair reimbursement policy reform and changes in ventral hernia episode spending.
Design, Setting, and Participants:
This retrospective cohort study utilized Merative™ MarketScan® claims from January 1, 2022–October 1, 2023. We performed a difference-in-differences evaluation of changes in spending associated with the January 2023 policy change, using inguinal hernia repair as the unaffected comparison group. Participants included commercially insured adult patients who underwent ventral or inguinal hernia repair.
Exposure:
January 2023 CMS ventral hernia repair reimbursement policy reform.
Main Outcomes and Measures:
The primary outcome was total episode spending per surgical episode, broken down into professional and facility components as well as payer and patient sources. Utilization of billable postoperative care and component separation were also evaluated.
Results:
Among 58,069 surgical episodes (34,110 ventral; 23,959 inguinal), median age was 52 years, 28% were female, and 90% were outpatient. Per-episode spending for ventral hernia decreased following policy reform by $492 (7% relative reduction, 95%CI $470–496) relative to inguinal hernia. Professional reimbursements decreased by $198 (20%, 95%CI $197–200). Facility reimbursements increased by $84 (1.4%) in absolute terms but decreased by $260 relative to inguinal hernia (4.6%, 95%CI $239–263). Patient OOP costs decreased by $83 (10%, 95%CI $82–87) relative to inguinal hernia repair. 52.3% of 7,561 ventral hernia repair cases had ≥1 related postoperative visit in the 90 days after surgery with the average number of visits being 1.06. There was no statistically significant increase in component separation procedures.
Conclusion and Relevance:
Following the January 2023 CMS ventral hernia repair reimbursement policy reform, episode spending decreased, driven by a decrease in professional fees. With CMS decreasing reimbursement for numerous surgical procedures, the effects on surgeon practices and patient costs warrant careful consideration.
Introduction
Ventral hernia repair is one of the most common operations in the US, accounting for over 600,000 cases per year.1 The growth in outpatient ventral hernia repair has prompted policymakers to reevaluate ventral hernia repair coding and reimbursement. In January 2023, CMS implemented several key changes to hernia billing, including: 1) unbundling the 90-day “global period” payment (i.e., the single bundled payment to the surgeon for the procedure and all postoperative services within 90 days), allowing surgeons to bill separately for postoperative care, 2) reimbursing repairs primarily by hernia size rather than distinguishing surgical approach (i.e., open, laparoscopic, robotic), and 3) grouping several related hernia types (e.g. incisional, umbilical, Spigelian, epigastric) into equivalent “anterior abdominal” hernias. All US private insurers have followed suit.
The move to unbundle 90-day global payments was based on evaluations showing patients receiving fewer postoperative visits than expected within 90 days, suggesting payers may be overpaying for postoperative care.2 Under the new “0-day global” reimbursement model, insurance plans only pay for services delivered on the day of surgery, decreasing initial reimbursements by as much as 50%. Any postoperative care, inpatient or outpatient, can be billed separately using the appropriate evaluation and management (E&M) codes. While this policy change aimed to prevent overpayment for postoperative care that was not being delivered, its impact on total episode spending, clinician reimbursement, and utilization of billable postoperative care, remains unclear. By incentivizing surgeons to bill for postoperative visits, the policy may have increased patients’ out-of-pocket costs. The policy change may have also increased surgeons’ utilization of component separation techniques, as these codes remain separately billable and well-compensated.
Given the high incidence of ventral hernia repair across the US, it is critical to examine the intended and unintended consequences of these changes. Using national insurance claims data from the Merative™ MarketScan® Database, we evaluated the association between ventral hernia reimbursement coding changes and 90-day episode payments, using difference-in-differences techniques. We also assess for unintended consequences, specifically for increases in out-of-pocket costs and utilization of component separation (e.g. transversus abdominis release, TAR) techniques.
Study Data and Methods
Data Source and Definitions
We used the Merative™ MarketScan® Commercial Claims and Encounters Database to identify commercially-insured individuals aged 18–65 years who underwent ventral or inguinal hernia repair between January 1, 2022 and October 1, 2023. Medicare and Medicare Advantage beneficiaries were excluded. Procedures were identified using Current Procedural Terminology (CPT) codes (Appendix Tables 1 and 2). Patients were required to have continuous insurance enrollment for at least 6 months before surgery and 3 months after. The database contains closed, adjudicated claims that represent true payments on behalf of the insurance plan and patient.
Each surgical episode began on the date of surgery and ended 90 days postoperatively. Episodes involving concurrent ventral and inguinal hernia repairs were excluded. We also excluded episodes with negative total OOP costs. The study period ended on October 1, 2023 to ensure all patients had 3-months of postoperative data before the administrative end of the dataset on December 31, 2023.
The primary outcome was 90-day episode spending, defined as the sum of insurer reimbursements for all covered services during the surgical episode. Secondary outcomes included total facility reimbursement and total professional reimbursement (i.e., the components of total episode spending), and patient OOP costs, defined as the sum of deductibles, coinsurance, and copayments. All monetary amounts were inflation-adjusted to 2024 U.S. dollars using the Consumer Price Index.3
In 2022, both ventral and inguinal hernia repairs were subject to a 90-day global period, during which routine postoperative E&M visits were bundled into the procedure payment. Accordingly, E&M costs during the postoperative period were excluded from total OOP spending for both groups in 2022. In 2023, the global period policy for ventral hernia repairs was changed to a 0-day global period, meaning postoperative E&M visits were no longer bundled and could billed separately. As a result, these E&M costs were included in OOP spending for ventral hernia repairs in 2023. In contrast, no policy change occurred for inguinal hernia repairs, which remained under a 90-day global period; E&M costs continued to be excluded for these cases.
E&M services were identified using CPT codes (Appendix Table 3). Broad inclusion criteria were selected when identifying related E&M visits to increase the likelihood of capturing relevant spending. However, this approach may capture some unrelated visits within the analysis. For our analyses, postoperative visits were considered related if they occurred within 90 days of the procedure and satisfied at least one of the following: (1) included a hernia diagnosis code (ICD-10: K40–K46); (2) the National Provider Identifier (NPI) matched the hernia surgeon’s; (3) the provider type was listed as “Surgeon (NEC),” “Acute Care Hospital,” “Surgical Critical Care,” or “Ambulatory Surgery Center”; OR (4) the visit included a postoperative care ICD-10 code (Z48.89, Z48.815, or Z48.02).
To evaluate whether surgeons changed coding or use of higher-intensity services following the policy change, we examined component separation and modifier 22 use. We identified component separation as any ventral hernia repair with ≥1 claim for CPT 15734, 14301, or 14302 (myocutaneous or fasciocutaneous flap; adjacent tissue transfer) recorded within the episode. Episodes for this analysis began on the index ventral hernia repair date and extended 90 days postoperatively. We then calculated the number of component separations per 100,000 incident ventral hernia repairs by calendar month from January 2017 through December 2023. We summarized modifier 22 use as the quarterly percentage of repair episodes with modifier 22 in the pre- and post-policy periods.
Analysis
We used a difference-in-differences (DiD) design to evaluate changes in patient OOP costs following the January 2023 ventral hernia reimbursement policy reforms. We compared spending trends for patients undergoing ventral hernia repair, who were affected by the policy change, with those undergoing inguinal hernia repair, who served as an unaffected comparison group. Beyond being unaffected by the policy change, inguinal hernia repairs represent a natural comparator group given similarities in patient characteristics, care settings, prosthetic material use, and proportion of outpatient procedures.4,5
Baseline patient characteristics were compared between ventral and inguinal repair groups using chi-squared tests for categorical variables and t-tests for continuous variables. To assess the appropriateness of difference-in-differences methods, we verified the parallel-trends assumption by comparing pre-intervention total spending, professional and facility reimbursement, total net pay, and patient out-of-pocket costs from 2021 to 2022 (Appendix Figure 1).6
To estimate the effect of the policy change on outcomes, we used a DiD design with indicators for policy exposure group, post-policy period, and their interaction, with the interaction term serving as the DiD estimator. For the primary outcome of total episode spending, we fit a generalized linear model with a gamma distribution and log link.7 Marginal means were calculated and robust 95% confidence intervals were obtained using a clustered nonparametric bootstrap to account for within-subject correlation. The model adjusted forthe following covariates:. age, sex, Elixhauser comorbidity score,8 obesity (E66 ICD-10 code), U.S. geographic region, insurance plan type, surgical setting (inpatient vs. outpatient), presence of any out-of-network claims, presence of any CPT code indicating a strangulated hernia, and calendar month. Missing data were rare and only occurred in the geographic region and insurance plan type variables. For U.S. geographic region, we used the MarketScan-provided “Unknown” category. To evaluate how the policy change influenced different components of health care spending, we also conducted separate DiD analyses for professional and facility reimbursement, net pay, and patient out-of-pocket spending. Episodes with negative costs were excluded. Because these secondary outcomes included many zero values and right-skewed distributions, we used a two-part modeling strategy. First, we fit a logistic regression to estimate the probability of any spending. Second, conditional on positive spending, we fit a generalized linear model with a gamma distribution and log link to estimate mean spending. Marginal means were obtained by multiplying the predicted probability of incurring any OOP cost (from part one of the model) by the estimated mean cost conditional on positive spending (from part two).
We conducted two sensitivity analyses using the model specifications. First, to align the pre- and post-policy observation windows, we repeated the DiDs after excluding episodes with index dates from October-December 2022, to align with the 2023 months of observation. Second, we repeated those DiDs while restricting the sample to outpatient episodes only given differences in coding and payment mechanisms between inpatient and outpatient settings.
To assess potential coding and practice responses following the policy, we examined modifier 22 use and component separation. Modifier 22 use was examined descriptively by plotting the quarterly percentage of hernia episodes billed with modifier 22. We evaluated component separation using an interrupted time series analysis (rather than difference-in-differences) because an appropriate control group was not available. We fit a quasi-Poisson regression model with the number of component separation episodes per month as the outcome and the log of total ventral hernia episodes as an offset. Model terms included a continuous time trend, an indicator for the post-policy period, quarterly indicator variables, and an interaction term representing the change in slope after policy implementation. Standard errors were adjusted using a Newey-West correction with a 12-month lag to address autocorrelation and heteroskedasticity.
All analyses were conducted using R version 4.4.1 (R Foundation for Statistical Computing, Vienna, Austria), and statistical significance was defined as p < 0.05. This study was deemed exempt by the Indiana University IRB due to the use of de-identified secondary data. This study follows the STROBE reporting guideline for observational studies. Informed consent was waived owing to use of de-identified data.
Study Results
The final analytic dataset (Appendix Figure 2) included 58,069 episodes, comprising 23,959 inguinal and 34,110 ventral episodes. Patient demographics are summarized in Table 1, and there were no major demographic changes within each cohort pre- and post-policy. The most common CPT codes in the pre- and post-policy periods are provided in Appendix Tables 4 and 5.
Table 1.
Cohort characteristics by hernia type and time period
| Inguinal (N = 23,959) | Ventral (N = 34,110) | Total (N = 58,069) | |||||
|---|---|---|---|---|---|---|---|
| Characteristic | 2022 (pre-policy) | 2023 (post-policy) | p-value | 2022 (pre-policy) | 2023 (post-policy) | p-value | |
| N = 13,573 | N = 10,386 | N = 19,703 | N = 14,407 | ||||
| Age, years, median (Q1-Q3) | 54 (44–60) | 54 (44–60) | 0.533 | 51 (42–58) | 51 (42–58) | 0.865 | 52 (43–59) |
| Sex, n (%) | 0.46 | 0.275 | |||||
| Female | 1,051 (7.7%) | 832 (8.0%) | 8,405 (43%) | 6,232 (43%) | 16,520 (28%) | ||
| Male | 12,522 (92%) | 9,554 (92%) | 11,298 (57%) | 8,175 (57%) | 41,549 (72%) | ||
| Insurance group, n (%) | 0.038 | <0.001 | |||||
| Consumer-Directed Health Plan | 1,573 (12%) | 1,216 (12%) | 2,419 (12%) | 1,660 (12%) | 6,868 (12%) | ||
| Exclusive Provider Organization | 102 (0.8%) | 60 (0.6%) | 146 (0.7%) | 89 (0.6%) | 397 (0.7%) | ||
| High Deductible Health Plan | 2,165 (16%) | 1,649 (16%) | 2,842 (14%) | 1,982 (14%) | 8,638 (15%) | ||
| Health Maintenance Organization | 1,497 (11%) | 1,263 (12%) | 2,150 (11%) | 1,830 (13%) | 6,740 (12%) | ||
| Other/unknown | 560 (4.1%) | 414 (4.0%) | 830 (4.2%) | 537 (3.7%) | 2,341 (4.0%) | ||
| Point-of-Service (Capitated) | 19 (0.1%) | 10 (<0.1%) | 25 (0.1%) | 24 (0.2%) | 78 (0.1%) | ||
| Point-of-Service (Non-Capitated) | 1,147 (8.5%) | 935 (9.0%) | 1,487 (7.5%) | 1,104 (7.7%) | 4,673 (8.0%) | ||
| Preferred Provider Organization | 6,510 (48%) | 4,839 (47%) | 9,804 (50%) | 7,181 (50%) | 28,334 (49%) | ||
| Any out-of-network claim, n (%) | 370 (2.7%) | 216 (2.1%) | 0.002 | 534 (2.7%) | 367 (2.5%) | 0.372 | 1,487 (2.6%) |
| US region, n (%) | 0.213 | 0.124 | |||||
| North central | 3,146 (23%) | 2,390 (23%) | 4,418 (22%) | 3,134 (22%) | 13,088 (23%) | ||
| Northeast | 2,164 (16%) | 1,697 (16%) | 2,578 (13%) | 2,005 (14%) | 8,444 (15%) | ||
| South | 5,915 (44%) | 4,401 (42%) | 9,921 (50%) | 7,182 (50%) | 27,419 (47%) | ||
| Unknown | 30 (0.2%) | 23 (0.2%) | 30 (0.2%) | 25 (0.2%) | 108 (0.2%) | ||
| West | 2,318 (17%) | 1,875 (18%) | 2,756 (14%) | 2,061 (14%) | 9,010 (16%) | ||
| Obesity | 1,908 (14%) | 1,563 (15%) | 0.032 | 7,218 (37%) | 5,617 (39%) | <0.001 | 16,306 (28%) |
| Procedure setting, n (%) | 0.175 | 0.005 | |||||
| Outpatient | 13,449 (99%) | 10,272 (99%) | 17,913 (91%) | 12,968 (90%) | 54,602 (94%) | ||
| Inpatient | 124 (0.9%) | 114 (1.1%) | 1,790 (9.1%) | 1,439 (10.0%) | 3,467 (6.0%) | ||
| Strangulated hernia, n (%) | 707 (5.2%) | 582 (5.6%) | 0.189 | 8,624 (44%) | 7,304 (51%) | <0.001 | 17,217 (30%) |
| Elixhauser comorbidity score, median (Q1-Q3) | 0 (0–1) | 0 (0–2) | 0.975 | 0 (−3–3) | 0 (−3–3) | 0.67 | 0 (−1–3) |
| Total episode spending, USD, median (Q1-Q3) | 6,631.2 (3,970.3–10,712.2) | 6,803.4 (3,991.6–11,019.6) | 0.046 | 5,470.2 (2,766.0–9,325.8) | 5,141.4 (2,343.6–9,024.7) | <0.001 | 5,908.6 (3,184.4–9,887.6) |
| Total professional reimbursement per episode, USD, median (Q1-Q3) | 893.1 (667.6–1,212.3) | 866.0 (647.4–1,192.3) | <0.001 | 1,172.3 (757.4–1,709.4) | 886.8 (567.5–1,324.8) | <0.001 | 953.2 (660.3–1,414.4) |
| Total facility reimbursement per episode, USD, median (Q1-Q3) | 5,607.6 (2,959.8–9,619.9) | 5,795.2 (2,984.1–9,889.4) | 0.024 | 4,186.0 (1,529.9–7,847.4) | 4,142.6 (912.9–7,935.7) | 0.063 | 4,789.8 (2,082.1–8,624.6) |
| Patient OOP cost per episode, USD, median (Q1-Q3) | 748.6 (106.1–1,789.0) | 816.8 (110.9–1,882.3) | <0.001 | 377.0 (0.0–1,324.1) | 354.3 (20.4–1,258.9) | 0.124 | 532.5 (15.3–1,521.7) |
Costs were standardized to 2024 US dollars. OOP = out-of-pocket, USD = United States Dollar
“Other/Unknown” insurance plan type includes missing values, Comprehensive, and Basic/Major Medical plans.
Spending Outcomes
Following the January 2023 CMS reimbursement policy reform, total episode spending for ventral hernia decreased by $184, whereas inguinal hernia episode spending rose by $308, amounting to a −$492 (7% relative reduction, 95%CI $470–496) difference-in-differences relative to inguinal hernia (Figure 1, Table 2). We further broke down total spending into professional and facility reimbursements. Professional reimbursements for ventral hernia decreased by $208, whereas inguinal hernia professional reimbursements decreased by $9, amounting to a difference-in-differences of −$198 (20% relative reduction, 95%CI $197–200). Facility reimbursements for ventral hernia repair increased by $84 while facility reimbursements for inguinal hernia rose by $344, amounting to a difference-in-differences of −$260 (4.6% relative reduction, 95%CI $239–263). In total, 26% of episodes had zero OOP costs. Post-policy, patient OOP costs decreased by a difference-in-differences of −$83 (10% relative reduction, 95%CI $82–87) when compared to inguinal hernia repair (Table 2). Results were materially unchanged in both sensitivity analyses (excluding Oct-Dec 2022 and restricting to outpatient episodes), with effect estimates remaining similar in magnitude and direction and statistical significance maintained (Appendix Tables 6 and 7; Appendix Figures 3 and 4). The proportion of repairs performed on an outpatient basis remained approximately 90% over the study period (Appendix Figure 5).
Figure 1. Difference-in-differences estimates for total, professional, and facility reimbursement following the policy.
(A) total episode spending, (B) facility reimbursement, and (C) professional reimbursement. Each panel shows the DiD contrast comparing post-policy (2023) vs pre-policy (2022) changes in the treated group relative to the control group. Models adjust for patient and episode-level covariates; negative values indicate larger post-policy reductions in the ventral group than in the inguinal group.
Table 2.
Adjusted difference-in-differences estimates for hernia repair spending (USD)
| Outcome | Repair type | 2022 Pre (95% CI) | 2023 Post (95% CI) | Difference | DiD (95% CI) |
|---|---|---|---|---|---|
| Total spending | Inguinal | 7566.3 (7561.36, 7585.24) | 7874.09 (7861.01, 7882.96) | 307.79 | −492.23 (−495.92, −469.97) |
| Ventral | 6621.05 (6615.07, 6637.12) | 6436.62 (6428.97, 6452.81) | −184.43 | −492.23 (−495.92, −469.97) | |
| Total professional reimbursement | Inguinal | 856.64 (856.05, 858.43) | 847.45 (845.96, 848.62) | −9.19 | −198.31 (−199.98, −196.64) |
| Ventral | 980.52 (980, 982.97) | 773.02 (772.07, 774.42) | −207.5 | −198.31 (−199.98, −196.64) | |
| Total facility reimbursement | Inguinal | 6754.31 (6748.52, 6770.63) | 7098.44 (7084.22, 7105.14) | 344.13 | −259.75 (−262.5, −238.67) |
| Ventral | 5690.27 (5681.36, 5702.51) | 5774.66 (5765.77, 5787.89) | 84.39 | −259.75 (−262.5, −238.67) | |
| Patient OOP costs | Inguinal | 948.33 (945.3, 950.77) | 955.62 (952.84, 958.57) | 7.29 | −83.44 (−86.75, −82.22) |
| Ventral | 805.44 (802.95, 808.11) | 729.29 (725.87, 731.15) | −76.15 | −83.44 (−86.75, −82.22) |
USD = United States dollar, DiD = difference in differences, CI = confidence interval, OOP = out-of-pocket. Models were adjusted for age, sex, region, insurance type, elixhauser comorbidity score, any out of network claim, procedure setting, strangulated hernia, obesity, and calendar month. Robust confidence intervals obtained via clustered bootstrap with 500 replicates.
Postoperative Care Utilization
Under the new 0-day global period in 2023, patients undergoing ventral hernia repair without component separation could be billed for postoperative evaluation and management (E&M) visits. A total of 7,561 ventral hernia repair cases (52.3%) had at least one related visit in the 90-day postoperative period, and the average number of E&M visits was 1.06. The median time to the first postoperative E&M visit among those who had at least one visit was 15 days.
Utilization of Modifier 22 and Component Separation
Quarterly rates of modifier 22 use were similar in the pre- and post-policy periods, averaging 2.1% overall, 2.5% for ventral episodes, and 1.7% for inguinal episodes (Appendix Figure 6). The overall rate of component separations increased gradually over the study period (time trend IRR: 1.01, p<0.001, Figure 2), but the policy change was not associated with a statistically significant level shift (post-policy IRR: 1.02, p=0.46) or slope change after implementation (time since policy IRR: 1.00, p=0.98 Table 3). Taken together, this suggests that the 2023 policy change was not associated with an immediate or accelerating increase in component separation procedures.
Figure 2. Interrupted Time Series Analysis of Monthly Component Separation Rate.
Each point represents the monthly count of ventral hernia repairs (per 1,000) that included billing codes for component separation. The black line shows the modeled linear trend, allowing for a discontinuity in January 1, 2023. There was no statistically significant slope change (p=0.98) or level change (p=0.46) after January 1, 2023.
Table 3.
Interrupted Time Series Analysis of Monthly Component Separation Episodes, 2017–2023
| Variable | IRR (95% CI) | P-value |
|---|---|---|
| Time | 1.005 (1.004, 1.005) | <0.001 |
| Post policy | 1.017 (0.973, 1.062) | 0.462 |
| Time since policy | 1 (0.995, 1.005) | 0.984 |
| Quarter | ||
| 1 | Reference | |
| 2 | 0.995 (0.977, 1.014) | 0.601 |
| 3 | 0.995 (0.977, 1.013) | 0.595 |
| 4 | 0.872 (0.85, 0.895) | <0.001 |
IRR = incidence rate ratio. Newey-white standard errors with 12 lag orders were used to account for potential heteroscedasticity and autocorrelation.
Discussion
In this difference-in-differences evaluation of multiple coding and reimbursement changes for ventral hernia repair, we found that the policy change was associated with a 20% decrease in professional payments and a 4.6% decrease in facility payments, relative to inguinal hernia repair. Out-of-pocket spending within the 90-day window decreased as a result. The policy change was not associated with an increase in component separation beyond pre-existing trends. Overall, this suggests that despite a decrease in professional fees following the transition to 0-day billing periods, surgeons on average did not recoup lost fees through increased outpatient follow-up or use of component separation.
While professional reimbursement decreased by 20%, facility reimbursement declined by only 4.6%. Given that facility payments far exceed professional payments (five-fold or more), a smaller change in professional payments is likely to be felt more acutely than a larger change in facility payments. These findings may explain recent shifts in surgeon documentation, such as the abrupt rise in hernias >3 cm immediately post-policy.9 Our findings provide reassurance that surgeons overall are not overusing invasive techniques (e.g. transversus abdominis release) to increase revenue capture. However, this change in reimbursement may discourage surgeons from repairing small hernias, which provide the least reimbursement. As a result, these changes may negatively impact access to care for patients with small hernias. Further research is needed to determine whether the management of hernias <3 cm has changed following the 2023 policy change, and whether this has increased complications or emergency repairs.
The decrease in physician reimbursement may have been an intended result of the policy, which aimed to reduce spending on follow-up care that was not actually being performed.2,10 The 90-day global codes for ventral hernia repair factored in 2.5 postoperative visits within 90 days.2 We found that only 52.3% of patients had any follow-up E&M visits billed within 90 days of surgery. However, given the standard practice of general surgeons to perform at least one postoperative visit even after straightforward repairs, some surgeons may not be regularly billing for these visits, perhaps not responding to the policy change. That is, some of the observed decrease in surgeon reimbursement may be due to surgeons being unaware that postoperative visits following ventral hernia repair have become billable. As more surgeons take advantage of this opportunity, total and OOP costs may rise over time.
As with professional and facility fees, patient OOP costs decreased following this policy change. Given the financial burden associated with surgery within the US, these results reflect a potentially positive consequence of decreased reimbursements. However, as noted above, these findings may change if surgeons increase billing for postoperative visits.
Our findings contrast with two prior studies. One study from a tertiary referral center noted an increase in procedural work RVUs that was neutralized by the decrease in postoperative reimbursement, for a net neutral effect. In this study, the number of outpatient follow-up visits per procedure increased post-policy.11 Another study of the Abdominal Core Health Quality Collaborative noted an increase in 90-day work RVUs from 13.8 to 14.1 per case, driven by large and complex hernias as well as postoperative care.12 This study’s findings may differ because the prior study cohorts likely consist of more complex hernias, repaired by subspecialist hernia surgeons who may be billing for all eligible postoperative care. Unlike those studies, we evaluate a diverse cohort that includes community and general surgery practice, which may underlie the differences in hernia characteristics and billing practices that we observe.
CMS policymakers have signaled that they intend to expand 0-day global billing to a broader range of procedures.13 This analysis shows that the transition to 0-day billing was among a set of changes that decreased professional reimbursements by 20%. Outside of hernia surgery, CMS is also moving to reduce surgeon reimbursement through other measures such as the recent “efficiency adjustment” that will reduce procedural reimbursements by 2.5% on January 1, 2026. Prior to this study period, Medicare reimbursement for general surgery procedures had already eroded by 24% from 2000–2018 after adjusting for inflation.14 Reimbursement changes and other financial pressures have led surgical practices to close or sell (particularly to private equity), with harmful consequences for healthcare access and possibly even patient outcomes.15,16 Physician shortages in socially vulnerable communities are well-documented, and surgeon supply gaps in vulnerable localities are worsening faster in general surgery relative to other surgical fields.17 To preserve access to needed surgery, policymakers may consider intervening to keep billing and coding changes revenue-neutral. They should also monitor for changes in hernia repair rates, surgeon workforce, and hernia complications that may have resulted from the policy.
Limitations
This study has several limitations. First, our analysis relied on administrative claims data, which are subject to potential coding inaccuracies and lack clinical detail. Second, while our DiD design helps control for secular trends and time-invariant confounding, unmeasured differences in patient case mix or provider behavior between ventral and inguinal hernia repairs may still bias estimates if these factors changed differentially over time. To mitigate this risk, we adjusted our models for a range of patient- and episode-level covariates selected for their clinical relevance and potential to influence health care costs or utilization. Additionally, our pre-policy trends analysis supports the plausibility of the parallel trends assumption. Third, our outcome measures may underestimate the prevalence and financial impact of postoperative visits. We identified related E&M visits using a broad, inclusive definition to capture policy-relevant spending. While this approach increases sensitivity, it is possible that some unrelated visits were inadvertently included or that certain relevant services were still missed. Fourth, the study population was limited to individuals with continuous commercial insurance coverage, which may not reflect experiences of those with public insurance or no insurance (e.g., Medicare, Medicaid, uninsured). As these populations have varying reimbursement levels, the impact of this policy change within these cohorts may be different. Fifth, we truncated the study period to October 1, 2023, due to data availability constraints and the need to observe a full 90-day postoperative period. As such, our results may not capture longer-term responses to the policy change such as strategic billing (e.g., increased postoperative in office procedures, increased documented hernia size). Finally, due to multiple simultaneous policy changes, we cannot fully separate the effect of changes in the global period from the changes to hernia coding and valuation that occurred at the same time.
Conclusion
This cohort study found that the 2023 changes in ventral hernia coding and reimbursement policy were associated with a decrease in total episode spending on ventral hernia repair, driven primarily by a decrease in professional fees. Despite these changes in reimbursement, there were no significant increases in the utilization of billable postoperative care or component separation techniques. Future work should focus on evaluating the longitudinal impact of this policy change on access to care.
Supplementary Material
Key Points.
Question:
What is the association between the 2023 Centers for Medicare and Medicaid Services (CMS) ventral hernia reimbursement policy change and total episode spending on ventral hernia repair?
Findings:
In this retrospective difference-in-differences evaluation of ventral hernia repair relative to inguinal hernia repair, professional reimbursement decreased by 20%, facility reimbursement decreased by 4.6%, and out-of-pocket costs decreased by 10% following the 2023 policy change.
Meaning:
The 2023 ventral hernia reimbursement policy reform was associated with decreased total and out-of-pocket costs relative to inguinal hernia repair, driven by a decrease in professional reimbursement. As CMS considers extending similar reforms to other common surgical procedures, potential impacts on both surgeon practice and patient costs merit careful evaluation.
Acknowledgements:
The authors acknowledge Sabrina Khondaker (NYU Tandon School of Engineering) for research assistance. The funders had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication.
Dr. Yuce had full access to all the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.
Funding information:
Dr. Chhabra is supported by NYU CTSI grant KL2 TR001446 from the NIH National Center for Advancing Translational Sciences (NCATS) and grant L30DK144880 from the NIH Division of Loan Repayment. Dr. Telem is supported by grant R01DK128179 from the National Institute of Diabetes and Digestive and Kidney Diseases. Dr Yuce is supported by grant K12TR004415 from NCATS.
Footnotes
Disclosures: Dr. Chhabra has received payments from GI Windows Surgical unrelated to the submitted work. Dr. Yuce has received consulting fees from J&J and RevMedica unrelated to the submitted work.
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