The Cost of Standard and Complex Pars Plana Vitrectomy for Retinal Detachment Repair Exceeds Its Reimbursement

Objective: To measure the total costs and reimbursements associated with standard and complex pars plana vitrectomy using time-driven activity-based costing (TDABC).Design: Economic analysis at a single academic institution.Subjects: Patients who underwent standard or complex pars plana vitrectomy (PPV; Current Procedural Terminology codes 67108 and 67113) at the University of Michigan in the calendar year 2021.Methods: Process flow mapping for standard and complex PPVs was used to determine the operative components. The internal anesthesia record system was used to calculate time estimates, and financial calculations were constructed from published literature and internal sources. A TDABC analysis was used to determine the costs of standard and complex PPVs. Average reimbursement was based on Medicare rates.Main Outcome Measures: The primary outcomes were the total costs for standard and complex PPVs and the resulting net margin at current Medicare reimbursement levels. The secondary outcomes were the differential in surgical times, costs, and margin for standard and complex PPV.Results: Over the 2021 calendar year, a total of 270 standard and 142 complex PPVs were included in the analysis. Complex PPVs were associated with significantly increased anesthesia time (52.28 minutes; P < 0.001), operating room time (51.28 minutes; P < 0.0001), surgery time (43.64 minutes; P < 0.0001), and postoperative time (25.95 minutes; P < 0.0001). The total day-of-surgery costs were $5154.59 and $7852.38 for standard and complex PPVs, respectively. Postoperative visits incurred an additional cost of $327.84 and $353.86 for standard and complex PPV, respectively. The institution-specific facility payments were $4505.50 and $4935.14 for standard and complex PPV, respectively. Standard PPV yielded a net negative margin of-$976.93, whereas complex PPV yielded a net negative margin of-$3271.10.Conclusions: This analysis demonstrated that Medicare reimbursement is inadequate in covering the costs of PPV for retinal detachment, with a particularly large negative margin for more complex cases. These findings demonstrate that additional steps may be necessary to mitigate adverse economic incentives so that patients continue to have timely access to care to achieve optimal visual outcomes after retinal detachment.