Medicare reimbursement of lower extremity bypass does not cover cost of care for most patients with critical limb ischemia

Objective Lower extremity bypass surgery remains an important treatment option for patients with critical limb ischemia (CLI), but is resource intensive. We sought to evaluate the cost and Medicare reimbursement for lower extremity bypass surgery in patients with CLI. Methods Hospital cost accounting systems were queried for total technical and professional costs incurred and reimbursement received for patients with CLI undergoing lower extremity bypass at our center between 2011 and 2017. Patients were identified by assignment to Diagnosis-Related Group (DRG) 252, 253, or 254 (other vascular procedure with major complication/comorbidity, with complication/comorbidity, and without complication/comorbidity, respectively). Additional clinical data were incorporated from the Vascular Quality Initiative clinical registry. For non-Medicare patients, reimbursement was indexed to Medicare rates. Contribution margins (reimbursement minus cost) from technical and professional services were analyzed for each patient and summarized by DRG. We compared technical, professional, and total costs; reimbursement; and contribution margins across DRGs using univariate statistics and evaluated factors associated with total contribution margin using median quantile regression. Results We analyzed 68 patients with hemodynamically confirmed CLI (46% rest pain, 54% tissue loss), of whom 25% received a prosthetic graft. Mean age was 66.1 ± 11.6 years, 69% were male, 49% diabetic, 44% current smokers, and 4% on dialysis. In general, total infrainguinal bypass cost was adequately compensated for patients assigned only the most complex DRG 252 (median, $2490; interquartile range [IQR], −$1,621 to $10,080). In the majority of patients with less complex DRG 253 (median, −$3,100; IQR, −$8499 to $109) and DRG 254 (median, −$4902; IQR, −$9259 to $1059), reimbursement did not cover the cost of care. Both technical costs and professional costs varied significantly with the complexity of DRG. Although reimbursement from technical services increased alongside increasing complexity of DRG, there was insignificant variation in professional reimbursement as DRG complexity increased. On multivariable modeling, longer length of stay (−$2547 per additional day) and preoperative dialysis (−$5555) were significantly associated with negative margins. Conclusions For the majority of patients with CLI, current Medicare reimbursement does not adequately cover the cost of providing care after open bypass surgery. As commercial insurers move toward Medicare reimbursement rates, more granular risk stratification profiles are needed to ensure open surgical care for patients with CLI remains financially sustainable.