Overview: The charts compare the average value of services performed by specialties to their overall Medicare revenue based on 2008 CMS claims data, the latest available. Note: The dollar values reflect payments from Medicare only and do not account for patient copays or deductibles. Noteaverage payments per service were calculated by dividing total Medicare revenue by the number of successfully paid services. These 10 specialties were chosen because they had very high annual Medicare utilization in 2008, ranging from 37 million claims billed annually (urology) to nearly 344 million claims (hematology/oncology).

 

Breakdown: The two specialties that perform the highest-paying services by far are ophthalmology and orthopedic surgery, with average payments of $82.52 and $71.58, reflecting major surgeries. However, total revenues for these two specialties hover around the middle of the spectrum due to high denial rates of 13.5% and 11.7%, as well as relatively moderate annual utilization (59.9 million and 41.7 million, respectively). Internal medicine is the clear winner for total revenue despite its average payment of just $36.53 and a fairly high denial rate of approximately 10%. The determining factor was its high utilization of 253 million services billed in 2008. Hematology/oncology had the highest utilization with 344 million services, but has high denial rate of about 11.5% and low average payment of $14.24 per service (mostly for inexpensive drug codes such as J0881 and J9263).

 

Takeaways: Denial rates don’t seem to impact overall revenue as much as the value of services provided and the overall volume of services. Dermatology has a denial rate of 6% but ranks low in total payments; ophthalmology saw 13.5% of claims denied, but has more than twice the revenue due mostly to high –value codes.