Surgical Procedures in Health Professional Shortage Areas: Impact of a Surgical Incentive Payment Plan

Introduction: The Affordable Care Act established a Center for Medicare/Medicaid Services based 10% reimbursement bonus for general surgeons in Health Professional Shortage Areas. We sought to assess the impact of the Affordable Care Act Surgery Incentive Payment on surgical procedures performed in Health Professional Shortage Areas. Methods: Hospital utilization data from the California Office of Statewide Health Planning and Development between January 1, 2006, and December 31, 2015, were used to categorize hospitals according to Health Professional Shortage Area location. A difference-in-differences analysis measured the effect of the Surgery Incentive Payment on year-to-year differences for inpatient and outpatient surgical procedures by hospital type pre- (2006–2010) versus post- (2011–2015) Surgery Incentive Payment implementation. Results: Among 409 unique hospitals that performed surgical procedures for at least 1 year of the study period, 2 performed surgery in a designated Health Professional Shortage Area. The two Health Professional Shortage Area -designated hospitals were located in a rural area, were non-teaching hospitals, and had 196 and 202 hospital beds, respectively. After the enactment of the Surgery Incentive Payment, while non- Health Professional Shortage Areas had only a modest relative decrease in total inpatient procedures (Pre-Surgery Incentive Payment: 4,666,938 versus Post-Surgery Incentive Payment: 4,451,612; Δ−4.6%), the proportional decrease in inpatient surgical procedures at Health Professional Shortage Area hospitals was more marked (Pre-Surgery Incentive Payment: 25,830 versus Post-Surgery Incentive Payment: 21,503; Δ−16.7%). In contrast, Health Professional Shortage Area hospitals proportionally had a greater increase in total outpatient procedures (Pre-Surgery Incentive Payment: 17,840 versus Post-Surgery Incentive Payment: 22,375: Δ+25.4%) versus non- Health Professional Shortage Area hospitals (Pre-Surgery Incentive Payment: 5,863,300 versus Post-Surgery Incentive Payment: 6,156,138; Δ+4.9%). Based on the difference-in-differences analysis, the increase in the trend of surgical procedures at Health Professional Shortage Area hospitals was much more notable after Surgery Incentive Payment implementation (Δ+75.2%). Conclusion: The Medicare Surgery Incentive Payment program was associated with an increase in the number of surgical procedures performed at Health Professional Shortage Area hospitals relative to non-Health Professional Shortage Area hospitals during the study period, reversing the trend from negative to positive