The Challenge of Measuring Surgeon Spending for Payment Policies

Objective: Our objective was to understand the reliability of profiling surgeons on average health care spending. Summary of Background Data: Under its Merit-based Incentive Payment System (MIPS), Medicare will measure surgeon spending and tie performance to payments. Although the intent of this cost-profiling is to reward low-cost surgeons, it is unknown whether surgeons can be accurately distinguished from their peers. Methods: We used Michigan Medicare and commercial payer claims data to construct episodes of surgical care and to calculate average annual spending for individual surgeons. We then estimated the "reliability" (ie, the ability to distinguish surgeons from their peers) of these cost-profiles and the case-volume that surgeons would need in order to achieve high reliability [intraclass correlation coefficient (ICC) >0.8]. Finally, we calculated the reliability of 2 alternative methods of profiling surgeons (ie, using multiple years of data and grouping surgeons by hospitals). Results: We found that annual cost-profiles of individual surgeons had poor reliability; the ICC ranged from

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