2008 Annual Meeting Abstracts

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PURPOSE: The financial reimbursement for breast reconstruction is perceived to be low, and breast cancer centers are finding it increasingly difficult to recruit plastic surgeons to provide reconstructive services. We evaluated the financial impact of providing breast reconstruction for an academic medical practice and health care system.
METHODS: We examined the billing records for 86 mastectomy-treated breast cancer patients who received reconstruction in fiscal year 2007 at the University of Michigan. The financial data were separated into inpatient professional and facility revenues and costs. Professional net revenue was calculated by applying actual collection rates to procedural charges. Facility revenue was calculated by applying actual collection rates to the following downstream charge categories: inpatient care and operating room (including nursing, anesthesia and pharmacy).
RESULTS: The payer mix for this analysis was 70.1% private insurance, 22.6% HMO, 3.1% Medicare, 2.1% Medicaid, and 2.1% self-pay. The practice mix included 44.1% expander/implants, 16.3% Latissimus Dorsi flaps, and 39.6% were pedicled TRAM flaps. The net professional revenue and total cost for physician salary, malpractice and benefits allocated to post-mastectomy reconstruction was ,078 and ,411, respectively, for a net profit margin of ,667 (27%). Net health system facility revenue and total costs were ,109,678 and ,892, respectively, for a net profit margin of ,786 (15%). Physician reimbursement by surgical time was highest for delayed tissue expander placement (,977.70/hour in OR) and lowest for immediate TRAM flaps (/hr in OR). The facility received the average direct margin on TRAM flaps (,471) and lost money on Latissimus Dorsi flaps with a margin of -.
CONCLUSION: Post-mastectomy breast reconstruction at this academic medical center is fiscally advantageous for both the plastic surgery practice and the healthcare system. However, reimbursement varies dramatically by type and timing of reconstructive procedure. Although immediate post-mastectomy reconstructions with TRAM flaps can provide superior aesthetic results with the greatest amount of patient satisfaction, poor physician reimbursement for these labor-intensive procedures require revenue sharing between the hospital and the surgeon practice. These data can provide a guide to negotiate more favorable contracts with the insurance carriers.

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