The Price of Otologic Procedures: Variation in Markup by Surgical Procedure and Geography in the United States

Abstract

Objective: To characterize and analyze variation in price markup of seven common otologic surgeries by procedure and geographic region.

Study design: Retrospective Analysis of the Centers for Medicare and Medicaid Services database of 2017 Medicare Provider Utilization and Payment Public File.

Setting: Inpatient and outpatient centers delivering Medicare-reimbursed services.

Patients: Full sample of patients undergoing procedures with Medicare fee-for-service final action claims during 2017.

Interventions: Seven procedures (myringotomy, tympanoplasty, mastoidectomy, tympanomastoidectomy stapedotomy/stapedectomy, cochlear implant, bone-anchored hearing aid).

Main outcome measures: Markup ratio (MUR) is defined as the ratio of total charges to Medicare-allowable-costs; Variation in MUR was measured using coefficient of variation (CoV).

Results: Among all providers, the median MUR was 2.4 (interquartile range: 1.9-3.1). MUR varied significantly by procedure, from 2.3 for myringotomy to 8.7 for mastoidectomy (p < 0.01). MUR also varied significantly within procedure, with the least variation found in myringotomy (CoV = 0.46), and the greatest in cochlear implants (CoV = 0.92). Using the national average as baseline, MUR varied 71% between states, ranging from 1.75 to 6.24. Within the same state, significant variation was also noted, varying by 4% (CoV = 0.04) in Montana compared with 138% (CoV = 1.38) in Pennsylvania. MUR was not significantly correlated with patient comorbidity or Centers for Medicare and Medicaid Services risk scores.

Conclusions: There was significant variation in the price of otologic surgery across geographic regions and procedures. The MUR for otology is lower or comparable to that reported in other surgical fields.