1. MARCH 2014 / MANAGED CARE 47
The Impact of Minimally Invasive Surgery
On Complex DRG Assignments
Santosh J. Agarwal, BPharm, MS, Covidien, Mansfield, MA; Gary V. Delhougne, JD, MHA, Covidien, Boulder, CO;
Levi Citrin, JD, Numerof & Associates Inc., St. Louis, MO; Jill E. Sackman, DVM, PhD, Numerof & Associates Inc.;
and Anthony J. Senagore, MD, MS, MBA, Department of Surgery, Keck School of Medicine of University of Southern
California, Los Angeles, CA.
ABSTRACT
Purpose: Minimally invasive
surgery is associated with improved
clinical outcomes and reduced costs.
We hypothesize that in patients with
similar preoperative characteris-
tics, hysterectomy, colectomy, and
thoracic resection performed via
minimally invasive surgery (MIS)
approach would be associated with
fewer complex Diagnosis Related
Group (cDRG) assignments and sub-
sequently result in reimbursement
savings.
Methodology: Premier hospital
database was used to examine in-
patient discharges of open and MIS
colectomy, hysterectomy and thoracic
resection. Open and MIS groups were
matched based on propensity score.
Descriptive statistics and regression
analysis were used to assess the im-
pact of MIS on cDRG assignment.
Potential reimbursement savings to
the U.S. health care system, assum-
ing a 10% increase in MIS utilization,
was estimated using Medicare’s Fis-
cal Year (FY) 2013 national average
reimbursement data and Premier’s
procedure volume projections.
Results: Compared with open
surgery, the MIS group had a statis-
tically significantly lower percent-
age of cDRG assignment (colectomy,
57% vs. 71%; hysterectomy, 15% vs.
19%; thoracic resection, 62% vs. 70%;
P<.001 for each). Open surgery, when
compared to MIS, increased the odds
of cDRG assignment by 67% (odds
ratio [OR], 1.67; 95% confidence in-
terval [CI], 1.62–1.71). We estimated
that a 10% increase in MIS utiliza-
tion would lead to annual payer re-
imbursement savings of about $24.4
million (colectomy, $17 million;
hysterectomy, $5 million; thoracic
resection, $2.4 million).
Conclusion: Health care reform
laws and economic pressures are
causing a shift in focus from vol-
ume-based to value-based care. MIS
approaches reduce payer expense
based on fewer expensive cDRG as-
signments. Further adoption of MIS
may lead to improved outcomes and
additional savings.
INTRODUCTION
Adoption of minimally invasive
surgery (MIS) has advanced rapidly
in the past 2 decades. Minimally
invasive procedures offer patients
reduced pain and scarring, shorter
hospitalization, and a quicker return
to activities of daily living. Studies
demonstrate that MIS is frequently
associated with reduced rates of com-
plications, mortality, and morbidity
(Tiwari 2011, Bilimoria 2008, Del-
aney 2008, Kiran 2010, Varela 2008,
Chalermchockchareonkit 2012,
Cheng 2007, Cho 2011, Howington
2012, Murthy 2012, Sawada 2008,
Villamizar 2009, Epstein 2013). The
data also suggest that MIS is asso-
ciated with cost benefits, likely due
to reduced length of stay (LOS) and
fewer complications (Varela 2008,
Cho 2011, Swanson 2011, Casali 2009,
Alkhamesi 2011, Eisenberg 2010,
Jensen 2012, Senagore 2002, Noblett
2007, Vaid 2012, Bosio 2007, Barnett
2010, Bijen 2009, Lenihan 2004). The
potential net result of replacing open
procedures with MIS is that both the
payer and the provider could see im-
proved outcomes and a more favor-
able cost structure.
The comparison of several types
of hysterectomy demonstrates the
improved outcomes offered by
laparoscopy (ACOG 2009, Sarmini
2005). Laparoscopic hysterectomy
is associated with less postoperative
pain, lower stress levels, and better
cosmetic results than abdominal
hysterectomy (Olsson 1996). In their
2005 meta-analysis of 27 random-
ized controlled trials comparing
­laparoscopic-assisted vaginal hyster-
ectomy (LAVH), total laparoscopic
hysterectomy (TLH), and abdomi-
nal hysterectomy for benign uterine
disease, the Cochrane Collaboration
found a significant advantage of
laparoscopy over open procedures
Corresponding author
Santosh J. Agarwal, BPharm, MS
Phone: (508) 452-1610
E-mail:
Santosh.Agarwal@covidien.com
Funding source: This research
project was sponsored by
Covidien, a global company that
manufactures, distributes, and
provides services for a diverse range
of medical devices and supplies.
Disclosure statement: Santosh
Agarwal and Gary Delhougne are
employees of, and hold stock in,
Covidien, a medical device and
supplies manufacturer. Jill Sackman
and Levi Citrin report being paid
by Covidien to provide editorial
services. Anthony Senagore reports
no disclosures.

2. 48 MANAGED CARE / MARCH 2014
(Nieboer 2009). Laparoscopic hys-
terectomy led to fewer wounds or
abdominal wall infections, less pain,
less pyrexia, a smaller drop in hemo-
globin, shorter hospitalization, and a
faster return to work; though opera-
tive times were longer and urinary
tract injuries were more common
(Lenihan 2004, Nieboer 2009, Shen
2003, Hidlebaugh 1994, Epstein 2013).
Like laparoscopic procedures,
­
video-assisted thoracoscopic proce-
dures (VATS) have also developed
rapidly in the past 2 decades. In fact,
VATS has been widely adopted for use
in simple thoracic operations, such as
the treatment of pneumo­thorax and
pleural effusion (Howington 2012).
VATS wedge resection has also been
established as a diagnostic tool for
lung cancer staging (Sihoe 2004).
VATS lobectomy for lung cancer has
numerous reported benefits, includ-
ing earlier chest tube removal, less
postoperative pain, shorter hospital-
ization, less inflammation, and better
long-term functional level (Murthy
2012, Sawada 2008, Kaseda 2002,
Swanson 2002).
Similarly, meta-analyses and large
randomized trials have demonstrated
the safety and efficacy of laparoscopic
colectomy as an alternative to open
surgery in patients with conditions
ranging from Crohn’s disease, diver-
ticulitis, and ulcerative colitis (UC)
to colon cancer (Nash 2010, Ful-
lum 2010, Bonjer 2007). The Clini-
cal Outcomes of Surgical Therapy
study (COST Study Group 2004)
involved 48 centers and 872 patients
who under­went either open or lapa-
roscopic-assisted colectomy. There
was no difference in overall survival
(86% for laparoscopic-assisted and
85% for open) at 3 years. The lapa-
roscopic group demonstrated faster
recovery with a shorter median hos-
pital stay (5 vs 6 days) and lower use
of postoperative narcotics.
Throughout the literature, MIS
tends to be associated with lower
hospital costs, shorter hospitaliza-
tion, a quicker return to activities of
daily living, and a faster return to
work compared to open procedures
(Varela 2008, Swanson 2011, Casali
2009, Alkhamesi 2011, Eisenberg
2010, Jensen 2012, Senagore 2002,
Noblett 2007, Vaid 2012, Bosio 2007,
Barnett 2010, Bijen 2009, Hidlebaugh
1994, Epstein 2013, Fullum 2010).
Most of the literature concern-
ing MIS-associated cost benefits has
focused on provider cost reduction.
Few studies consider implications for
payers utilizing a prospective pay-
ment program (Senagore 2005).
In the United States, inpatient
procedures are reimbursed based
on the Medicare Severity Diagnosis
Related Groups (MS-DRG) system,
which provides one single reimburse-
ment for the entire inpatient hospi-
talization, accounting for diagnosis
and procedures performed during
the hospital stay. MS-DRGs provide
higher reimbursement for procedures
with complications and/or comor-
bidities (CC) and major complica-
tions and/or comorbidities (MCC).
Patients with significant comorbidi-
ties prior to the surgery or who expe-
rience complications during or after
the surgery (prior to discharge) are
assigned a complex DRG (cDRG).
Reduction in certain postoperative
complications, such as surgical site
infections, translates into a higher
rate of assignment of DRGs without
complications and/or comorbidities,
provided patients have similar pre-
existing comorbidities.
Payers generally reimburse the
provider a set amount according
to a predetermined fee schedule.
Procedures assigned to a cDRG are
reimbursed at a higher rate on aver-
age than those assigned to the corre-
sponding noncomplex, or base, DRG.
The implications of DRG assignment
for the payer are important because
cDRGs typically result in a substan-
tially increased expense.
We hypothesize that when all pre-
operative patient and provider char-
acteristics are similar and the only
difference is the surgical approach,
MIS is associated with a lower rate
of postoperative complications com-
pared to open procedures. Postopera-
tive complications are an important
predictor of cDRG assignment and,
thus, cost for payers.
Senagore (2005) evaluated this re-
lationship for colectomy using data
from a single institution. We con-
ducted a retrospective cohort study
using a large hospital database to
demonstrate that among patients
with similar preoperative characteris-
tics but different surgical approaches
(open vs a nonrobotic laparoscopic or
MIS), MIS was associated with fewer
cDRG assignments. Procedures such
as colectomy, hysterectomy, and tho-
racic resection were selected because
these are high-volume surgeries with
a high percentage of open procedures
and significant payment differentials
between cDRGs and non-cDRGs.
METHODS
Data Source
This study utilized the Premier
hospital database, one of the largest
administrative and resource utiliza-
tion databases in the United States,
covering approximately 20% of hospi-
tal discharges. The database contains
more than 42 million discharges from
morethan600hospitals.Contributing
hospitals send data on patient demo-
graphics; hospital, surgeon, and payer
characteristics; and resource utiliza-
tion, including diagnosis and proce-
dures. Diagnoses and procedures are
coded using the International Clas-
sification of Diseases, Ninth Revision
Clinical Modification (ICD-9-CM)
codes. All data undergo a quality-
review process for validation.
Patients and Procedures
All surgical discharges for adult
patients (age ≥18 years) between the

3. MARCH 2014 / MANAGED CARE 49
years 2009 and 2011 with a primary
surgical procedure of either open or
laparoscopic colectomy, hysterec-
tomy, or thoracic resection were in-
cluded in this analysis. Relevant dis-
charges were identified and selected
using a combination of ICD-9-CM
(Appendix Table 1), Current Proce-
dural Terminology (CPT), and billing
codes. The analysis excluded cases
with missing data on cost or severity,
with patients who were deceased at
discharge, and where robotic surgical
procedures were used.
The primary outcome of interest
was complex MS-DRG (cDRG) code
assignment (see Appendix Table 1).
MS-DRG codes that ended with MCC
or CC were classified as cDRG. MS-
DRG was coded as a variable in the
Premier hospital database.
The main independent (predictor)
variable was open or laparoscopic
surgery. Confounders were identified
from variables available in the data-
base and were similar to variables
included in previous database stud-
ies (Delaney 2008, Swanson 2011).
These included patient characteris-
tics (age, gender, race, comorbidities),
hospital characteristics (geographic
location, teaching, urban, number
of beds), payer, procedure charac-
teristics (elective admission, proce-
dure including subtype, procedural
approach, principal diagnosis), and
surgeon specialty.
Comorbidities selected were from
the Charlson Comorbidity Index
(CCI), which includes 17 conditions.
Hypertension and obesity, two condi-
tions not included in the CCI, were
considered as relevant comorbidities
and were included.
Statistics
Descriptive analyses using a chi-
square test were performed to analyze
differences between open/laparos-
copy and cDRG assignment rates for
the three procedures.
To evaluate the impact of surgi-
cal approach on cDRG assignment,
propensity score matching was con-
ducted. Propensity score matching
attempts to predict assignment to a
particular group by accounting for a
set of variables. We used propensity
score matching to build a model of
open/MIS group assignment control-
ling for patient, provider, and payer
characteristics. The open and MIS
groups were then matched 1:1 based
on propensity score. The procedure
type (hysterectomy, colectomy, tho-
racic resection) was chosen for exact
matching, enabling a 50:50 split of
open and laparoscopic procedures.
Descriptive characteristics (mean
age, CCI, propensity score) were
evaluated to assess the impact of
matching. Thus, the propensity score
matching process helped reduce the
inherent systematic differences be-
tween the 2 groups.
Multivariate logistic regression
was performed on the matched popu­
lation to assess the impact of MIS
on cDRG assignment. All the con-
founding factors used to create the
propensity score were included in the
multivariate regression to account for
differences that may have remained
postmatching. All statistical analyses
were conducted using SAS 9.2.
Finally, we built a model to esti-
mate the reimbursement impact on
the U.S. health care system resulting
from increased MIS utilization. We
used projection weights provided by
Premier to obtain national estimates
of inpatient discharges. We projected
the cost savings using Fiscal Year
(FY) 2013 Medicare national aver-
age reimbursement rates (Appendix
Table 2). A 10% increase in MIS uti-
lization was considered an achievable
yet conservative shift, considering
regional variations and MIS adop-
tion in general surgical procedures.
Reimbursement rates for cDRG were
based on the reimbursement rates
for the corresponding MS-DRG with
Complications and/or Comorbidities
(CC). For hysterectomy, we averaged
the base reimbursement for the non-
cDRGs (735, 738, 741, and 743) and
the cDRGs (734, 737, 740, and 742).
Reimbursement was calculated by
factoring in the annual number of
projected inpatient procedures in the
United States, prevailing and pro-
jected share of MIS, split of cDRG for
open and MIS cases, and Medicare’s
average national reimbursement rates
for FY 2013.
RESULTS
During the study period, there
were 292,443 hospital discharges
with colectomy, hysterectomy, or tho-
racic resection surgery as the primary
inpatient procedure. We excluded
certain discharges (n=25,435) for
the following reasons: involvement
of patients under age 18 (n=1,324),
patients being deceased in the hospi-
tal (n=3,103), lack of information on
costs or severity (n=3), and the use
of robot-assisted surgery (n=22,005).
The three procedures accounted for
266,008 discharges (Table 1); among
them, 37% of the colectomies, 23% of
the hysterectomies, and 58% of the
thoracic resections were performed
using MIS. Raw cDRG assignment
rates are presented in Table 1. For all
three procedures, the MIS cohort had
a lower percentage of discharges as-
signed to a cDRG.
Logistic regression on the overall
cohort before propensity matching
highlighted that, after accounting
for confounders, open surgery in-
creased the odds of cDRG assignment
by 74% (odds ratio [OR], 1.74; 95%
confidence interval [CI], 1.70–1.78)
compared with MIS. The factors used
for matching and their odds ratios
predicting the use of MIS surgery
are presented in Appendix Table 3.
Pre- and post-matching descriptive
characteristics are given in Table 2.
After adjusting for all confound-
ers, the MIS cohort had a statisti-
cally significantly lower percentage

4. 50 MANAGED CARE / MARCH 2014
of cDRG assignment. Across the
three procedures, 48% of the open
procedures were assigned to cDRG,
compared with 39% of laparoscopic
procedures (P<.001). Further, as pre-
sented in Table 3, colectomy MIS dis-
charges were assigned to a cDRG less
often than open (57% vs. 71%, respec-
tively; relative reduction [RR], 20%),
hysterectomy MIS discharges were
assigned to a cDRG less often than
open (15% vs. 19%; RR, 23%), and
thoracic resection MIS discharges
were assigned to a cDRG less often
(62% vs. 70%; RR, 11%) than open.
In the post-matching logistic re-
gression model, again accounting
for confounders, open surgery was
associated with a 67% (OR, 1.67; 95%
CI, 1.62–1.71) increased cDRG as-
signment rate compared to MIS.
The model we employed to esti-
mate the reduction in payer reim-
bursement across the United States,
assuming a 10% increase in MIS, is
presented in Table 4. It should be
acknowledged that not all patients
are ideal candidates for under­
going MIS. Patient factors such as
comorbidities, physician skills, and
hospital infrastructure could influ-
ence the access to MIS. The model
was limited to hospital reimburse-
ment for inpatient care, and does not
include reimbursement associated
with follow-up visits. In total, based
on the Premier-provided projection
weights, there were an estimated
224,592 colectomy, 279,748 hyster-
ectomy, and 63,768 thoracic resection
discharges, across the U.S. annually.
Our model presents a conservative
estimate of projected savings as the
cDRG reimbursement was based on
reimbursement for CC DRGs and a
TABLE 1
Description of discharges with open and MIS procedures (before matching)
Procedure Discharges (n) MIS (%)
Open cases
with cDRG (%)
MIS cases
with cDRG (%)
Colectomy 94,383 37 80 54
Hysterectomy 142,220 23 24 15
Thoracic resection 29,405 58 73 56
TABLE 2
Pre- and post-matching descriptive characteristics
Pre-matching Post-matching
Open MIS P value Open MIS P value
n 181,901 84,107 67,532 67,532
Age, mean 54.6 55.4 <.001 55.1 55.1 .5368
Charlson Comorbidity Index, mean 1.49 1.48 .2952 1.50 1.48 .1447
Propensity score, mean 0.2408 0.4791 <.001 0.4146 0.4225 <.001
TABLE 3
Post-matching cDRG assignment rates by procedure
Procedure Discharges (n)
Open cases
with cDRG (%)
MIS cases
with cDRG (%) P value
Colectomy 57,032 71 57 <.001
Hysterectomy 59,782 19 15 <.001
Thoracic 18,250 70 62 <.001
TABLE 4
Estimated reduction in reimbursement from a 10% increase in MIS utilization
Estimated 2011 discharges 10% increase in MIS discharges
Projected savingsMIS (%) Total reimbursement MIS (%) Total reimbursement
Colectomy 37 $2,921,587,369 47 $2,904,575,293 $17,012,076
Hysterectomy 23 $2,070,305,973 33 $2,065,321,210 $4,984,762
Thoracic 58 $858,915,011 68 $856,479,211 $2,435,800
Total $5,850,808,353 $5,826,375,714 $24,432,638

5. MARCH 2014 / MANAGED CARE 51
10% increase in MIS share, which
can be easily achieved given the
regional variation and adoption of
MIS in similar general surgeries. Our
model projects $24.4 million in an-
nual savings from reduction in payer
reimbursement for colectomy ($17
million), hysterectomy ($5 million),
and thoracic resection ($2.4 million).
DISCUSSION
Our results considerably extend
previous single-procedure, single-
institution research (Senagore 2005)
showing the association between
MIS and lower cDRG assignment
by analyzing data from a large na-
tional claims database and multiple
procedures. To our knowledge, this
is the first such national study per-
formed. We risk-adjusted the data by
propensity-matching the open and
MIS cases based on patient charac-
teristics including comorbidities,
hospital characteristics, procedural
characteristics, payer, and surgeon
specialty. After accounting for a ma-
jority of confounders, we found an
association between MIS and a lower
rate of cDRG assignment for all three
procedures analyzed. Although there
might be other clinical reasons for
why the MIS cohort was associated
with fewer cDRG assignments, hav-
ing accounted for the most common
preoperative patient related clinical
factors, we believe the difference in
the rate of postoperative complica-
tions as a result of the surgical ap-
proach remains the principal reason
for cDRG assignment.
The Center for Medicare and
Medicaid Services’ (CMS) acute In-
patient Prospective Payment System
(IPPS) is used to pay for inpatient
stays under Medicare Part A. Each
discharge is assigned a DRG, which
has an associated payment weight
based on average resources used. The
more complex and resource-intensive
the DRG, the higher the weight as-
signed. To determine reimbursement
for a given discharge, Medicare uses a
formula that multiplies the DRG’s rel-
ative weight by the base payment rate
(in 2013, this was $5,774.25). Medi-
care further adjusts the reimburse-
ment amount based on a number of
largely nonclinical factors, including
hospital location, teaching status, and
percentage of low-income patients.
Appendix Table 2 presents the
2013 Medicare base reimbursement
for the DRGs in this study. There is a
significant difference in reimburse-
ment between non-cDRG and cDRG
discharges. In 2013, the base Medi-
care reimbursement for non-cDRG
colectomy discharges was $9,447.25,
while cDRG reimbursement was
$14,857.72 to $30,371.98. Hysterec-
tomy and thoracic resection show
similar differences. With hundreds of
thousands of procedures performed
each year, reducing the number of
cDRG assignments based on post-
operative complications can result in
significant cost savings from a payer
perspective.
Our results suggest that MIS can
help reduce overall U.S. health care
system reimbursement costs. Our
model conservatively estimates
nearly $24.4 million in annual sav-
ings for a 10% increase in MIS uti-
lization. MIS is also associated with
fewer readmissions and faster recov-
ery time, which could further add to
the savings.
Administrative claims databases,
such as Premier, allow for the study
of large populations, but there are
limitations. Patients were not ran-
domized, so there is potential for
selection bias.
Although we attempted to control
for clinical severity, surgeons may
have used additional clinical data
available to select their approach.
Also, based on data available, we
could not identify and eliminate the
MIS procedures that were converted
to open procedures. There might be
coding errors, documentation errors,
and incomplete records. However,
these errors should be distributed
equally between the MIS and open
groups. Factors such as surgeon
training or other surgeon preferences
could not be accounted for and might
affect results.
Despite these limitations, this
study presents the first national-
level payer view of the potential as-
sociation between MIS utilization
and cDRG assignment. Collectively,
this study, along with others dem-
onstrating MIS’s superior outcomes,
supports greater adoption of MIS for
colectomy, hysterectomy, and tho-
racic procedures.
Further research, including a pro-
spective cohort study, are required
to definitively determine if MIS is
the reason for the lower rate of cDRG
assignment.
CONCLUSION
The U.S. health care industry is in
the midst of a fundamental trans-
formation, stemming largely from
rising costs and inconsistent qual-
ity of care. Health care reform laws
and economic pressures are causing
a shift in focus from volume-based
to value-based care.
Payers and providers continue to
explore innovations that improve
clinical outcomes and reduce costs,
and MIS is one such innovation.
MIS approaches in colectomy,
hysterectomy, and thoracic resec-
tion have demonstrated significant
clinical benefits, including a reduc-
tion in both hospital cost per case
and payer reimbursement expense
based on fewer cDRG assignments.
Further adoption of MIS may lead to
improved outcomes and additional
savings.
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7. MARCH 2014 / MANAGED CARE 53
Appendix Table 1
ICD procedure and MS-DRG codes used to select discharges
Procedure
MIS Open MS-DRG
ICD
code
ICD
code Code Description
cDRG
assignment
Colectomy 17.31 45.71 329 Major Small and Large Bowel Procedures w MCC Yes
17.32 45.72 330 Major Small and Large Bowel Procedures w CC Yes
17.33 45.73 331 Major Small and Large Bowel Procedures w/o CC/MCC No
17.34 45.74
17.35 45.75
17.36 45.76
17.39 45.79
45.81 45.82
Hysterectomy 68.31 68.39 734 Pelvic Evisceration, Radical Hysterectomy and Radical Vulvectomy
w CC/MCC
Yes
68.41 68.49 735 Pelvic Evisceration, Radical Hysterectomy and Radical Vulvectomy
w/o CC/MCC
No
68.51 68.59 736 Uterine and Adnexa Procedures for Ovarian or Adnexal Malig-
nancy w MCC
Yes
68.61 68.69 737 Uterine and Adnexa Procedures for Ovarian or Adnexal Malig-
nancy w CC
Yes
738 Uterine and Adnexa Procedures for Ovarian or Adnexal Malig-
nancy w/o CC/MCC
No
739 Uterine, Adnexa Procedures for Nonovarian/Adnexal Malignancy
w MCC
Yes
740 Uterine, Adnexa Procedures for Nonovarian/Adnexal Malignancy
w CC
Yes
741 Uterine, Adnexa Procedures for Nonovarian/Adnexal Malignancy
w/o CC/MCC
No
742 Uterine and Adnexa Procedures for Nonmalignancy w CC/MCC Yes
743 Uterine and Adnexa Procedures for Nonmalignancy w/o CC/MCC No
Thoracic 32.20 32.29 163 Major Chest Procedures w MCC Yes
32.30 32.39 164 Major Chest Procedures w CC Yes
32.41 32.49 165 Major Chest Procedures w/o CC/MCC No
CC=complications and comorbidities, cDRG=complex Diagnosis Related Groups, ICD=International Classification of Diseases,
MCC=major complications and comorbidities, MIS=minimally invasive surgery, MS-DRG=Medicare Severity Diagnosis Related Groups
APPENDIX

8. 54 MANAGED CARE / MARCH 2014
Appendix Table 3
Predictors of minimally invasive surgery
Effect
Odds
Ratio
95% CI
Lower Upper
36–45 vs ≤35 years 0.88 0.85 0.92
46–55 vs ≤35 0.87 0.84 0.91
56–65 vs ≤35 0.80 0.76 0.83
66–75 vs ≤35 0.76 0.72 0.80
76–85 vs ≤35 0.71 0.67 0.76
85+ vs ≤35 0.67 0.62 0.73
Male vs female 0.96 0.94 0.98
Black vs white 0.80 0.77 0.82
Others vs white 0.86 0.84 0.88
Northeast vs South 1.13 1.10 1.16
Midwest vs South 0.83 0.80 0.85
West vs South 0.94 0.91 0.96
Urban vs rural 1.35 1.30 1.39
Teaching vs nonteaching 0.93 0.91 0.95
100–249 beds vs <100 beds 1.29 1.22 1.36
250–499 beds vs <100 beds 1.16 1.10 1.22
>500 beds vs <100 beds 1.32 1.25 1.40
Medicaid vs Medicare 0.86 0.82 0.90
Managed care vs Medicare 1.17 1.13 1.21
Uninsured vs Medicare 0.72 0.67 0.76
Others vs Medicare 0.97 0.91 1.04
Nonelective vs elective admission 0.43 0.41 0.44
Myocardial infarction 0.94 0.88 0.99
Congestive heart failure 0.83 0.78 0.88
Peripheral vascular disease 0.87 0.82 0.93
Appendix Table 2
Medicare national average reimbursement rates for FY 2013 by MS-DRG
MS-DRG Average payment
329: Major Small and Large Bowel Procedures w MCC $30,371.98
330: Major Small and Large Bowel Procedures w CC $14,857.72
331: Major Small and Large Bowel Procedures w/o CC/MCC $9,447.25
734: Pelvic Evisceration, Radical Hysterectomy and Radical Vulvectomy w CC/MCC $15,389.53
735: Pelvic Evisceration, Radical Hysterectomy and Radical Vulvectomy w/o CC/MCC $6,745.48
736: Uterine and Adnexa Procedures for Ovarian or Adnexal Malignancy w MCC $25,487.54
737: Uterine and Adnexa Procedures for Ovarian or Adnexal Malignancy w CC $11,576.79
738: Uterine and Adnexa Procedures for Ovarian or Adnexal Malignancy w/o CC/MCC $7,421.64
739: Uterine, Adnexa Procedures for Nonovarian/Adnexal Malignancy w MCC $19,181.48
740: Uterine, Adnexa Procedures for Nonovarian/Adnexal Malignancy w CC $9,058.64
741: Uterine, Adnexa Procedures for Nonovarian/Adnexal Malignancy w/o CC/MCC $6,639.81
742: Uterine and Adnexa Procedures for Nonmalignancy w CC/MCC $8,174.61
743: Uterine and Adnexa Procedures for Nonmalignancy w/o CC/MCC $5,573.88
163: Major Chest Procedures w MCC $29,560.12
164: Major Chest Procedures w CC $15,123.34
165: Major Chest Procedures w/o CC/MCC $10,348.61

9. MARCH 2014 / MANAGED CARE 55
Appendix Table 3
Predictors of minimally invasive surgery
Effect
Odds
Ratio
95% CI
Lower Upper
Cerebrovascular disease 0.94 0.86 1.03
Dementia 0.73 0.55 0.96
COPD 0.88 0.85 0.90
Rheumatic disease 0.97 0.90 1.04
Ulcers 0.92 0.82 1.05
Liver disease, mild 1.01 0.87 1.17
Liver disease, moderate/severe 0.85 0.66 1.09
Diabetes 0.94 0.91 0.97
Diabetes + sequelae 1.03 0.94 1.13
Chronic renal failure 0.84 0.79 0.89
Malignancy 0.82 0.76 0.88
Metastatic solid tumor 0.56 0.54 0.59
Paralysis 0.67 0.52 0.87
AIDS 0.70 0.47 1.04
Obesity 0.86 0.84 0.89
Hypertension 0.94 0.92 0.97
Others vs general surgeons 0.85 0.81 0.89
Colorectal surgeons vs general surgeons 1.73 1.67 1.81
Obstetrics and gynecology vs general surgeons 0.62 0.57 0.67
Thoracic surgeon vs general surgeons 1.09 1.03 1.16
Colectomy vs hysterectomy 2.36 2.08 2.68
Thoracic vs hysterectomy 3.68 3.34 4.06
Multiple segmental large bowel resection vs abdominal hysterectomy 1.16 0.93 1.46
Cecectomy vs abdominal hysterectomy 2.04 1.83 2.29
Right hemicolectomy vs abdominal hysterectomy 2.06 1.87 2.26
Transverse colon resection vs abdominal hysterectomy 1.19 1.05 1.34
Left hemicolectomy vs abdominal hysterectomy 1.23 1.12 1.36
Sigmoidectomy vs abdominal hysterectomy 1.71 1.56 1.87
Unspecified partial large intestine resection vs abdominal hysterectomy 0.80 0.72 0.90
Total intra-abdominal colectomy vs abdominal hysterectomy 0.00 0.00 0.00
Supracervical/subtotal hysterectomy vs abdominal hysterectomy 8.10 7.76 8.45
Vaginal hysterectomy vs abdominal hysterectomy 13.10 12.64 13.58
Radical hysterectomy vs abdominal hysterectomy 2.97 2.67 3.31
Wedge resection vs abdominal hysterectomy 6.46 6.09 6.86
Segmental resection vs abdominal hysterectomy 1.89 1.71 2.08
Lung lobectomy vs abdominal hysterectomy 0.00 0.00 0.00
Other diagnosis vs malignancy 0.55 0.51 0.60
Benign neoplasm of colon vs malignancy 1.93 1.78 2.10
IBD / diverticulitis vs malignancy 0.94 0.87 1.02
Benign fibroids vs malignancy 0.44 0.40 0.47
Endometriosis vs malignancy 0.68 0.62 0.74
Menstrual disorders vs malignancy 0.60 0.55 0.65
Genital prolapse vs malignancy 0.09 0.08 0.10
Secondary neoplasm of respiratory system vs malignancy 0.87 0.79 0.97
Pulmonary fibrosis vs malignancy 1.25 1.09 1.43
Pneumothorax vs malignancy 2.41 2.08 2.77
, continued