Use of Skin Cancer Procedures, Medicare Reimbursement, and Overall Expenditures, 2012-2017

The treatment of skin cancers represents a growing share of healthcare expenditures. At the same time, Medicare reimbursement rates for physician services have declined with respect to inflation. The objective of this study was to describe the economic effects of declining Medicare reimbursement for skin cancer procedures. In this ecological study, we used the Medicare Physician Supplier and Other Provider Public Use File (POSPUF) to analyze trends in Medicare reimbursement rates, use rates, and overall Medicare expenditures for skin cancer procedures from 2012 to 2017. We adjusted reimbursement rates for inflation by converting payment amounts into units of 2017 dollars. From 2012 to 2017, overall inflation-adjusted Medicare expenditure on skin cancer procedures increased 9%. Over this time period, inflation-adjusted Medicare reimbursement rates declined for each procedure class, with the exception of shave excision. Concurrently, the use rate of Mohs micrographic surgery increased 23%, while the use rate for all other skin cancer procedure classes declined. In summary, this study describes trends suggesting declining Medicare reimbursement rates have been associated with increasing use rates for higher cost skin cancer procedures. Clinicians and policy makers should collaborate to develop value-based payment models that incentivize patient outcomes rather than procedural volumes.