District of Columbia physicians and hospitals have been put on notice that beginning Aug. 1 if they hopitalize a patient for surgery that can be performed safely without an overnight stay, they may not be paid for their work.
In a letter to city doctors and hospitals, the National Capital Medical Foundation, which reviews the quality of many local health care programs, listed 51 operations that it said should in the absence of unusual circumstances, be performed as so-called ambulatory, or "in and out," surgery.
The operations include such procedures as breast biopsies, abortions, removal of finger or toe nails, vasectomies, simple skin grafts and breast enlargement or reduction.
The National Capital Medical Foundation, which plans to announce the hospitalization reduction program at a press conference next week, is the federally funded quality review organization for Medicare and Medicaid in the District, as well as for a number of private insurance plans. It does not, however, review procedures paid for by Blue Cross and Blue Shield.
Although there are several health care watchdog agencies in Northern Virginia and an extremely active hosptial cost review commission, the foundation's action is the first of its kind in the area.
Blue Cross, the largest private insurer in the city and area suburbs, is considering a similar proposal, made to it last spring by the Medical Society of the District, that it refuse payment for surgery that involves an unnecessary hospital stay.
A Blue Cross spokesman said yesterday it will be at least three months before his organization acts on the proposal, which would be the first such to affect patients in Maryland and Virginia.
The Medical Society and the medical foundation proposals acknowledge special cases when the patient may benefit by remaining in the hospital overnight.
"Ours is a rationally thought-out program," said Dr. Paul Schlein, an internist who is president of the foundation. "Some of these people do need hospitalization, but we have data indicating that, say, abortions . . . are being done in hospitals without any indication that they need to be."
The cost difference between surgery performed on an outpatient basis and that requiring a hospital stay varies enormously.
Dr. Dennis O'Leary, dean for clinical affairs at George Washington University Medical Center, said a GW study showed a difference of almost $500 in charges for the same gynecological procedure.
"The big difference," said O'Leary, a member of the National Capital Medical Foundation's board of directors, "is the room rate. Lab charges are about the same, the anesthesiology charge is the same. The supplies are like $30, $40."
Dr. Norman Fuller, executive director of the foundation, said the program is intended primarily to improve the quality of medical care, rather than cut costs. Cost cutting, said Fuller, who believes the program will save a great deal of money, is a side benefit.
"The question is whether the service is appropriate," he said. "If you need surgery on an outpatient basis and it's done on an inpatient basis, that's unnecessary. We are looking at medical necessity," said Fuller.
According to O'Leary, many of the procedures on the list are often performed on an outpatient basis.
"We do 90 to 95 percent of our D and Cs (dilatation and curettage, which can be used as an abortion method or to treat several gynecological problems) on an outpatient basis, and if a hospital is doing 80 percent of their D and Cs on an inpatient basis, you have to raise some eyebrows."
But Schlein, who believes the program will improve the quality of care, also wonders if it might not result in higher hospital room rates.
If there are too many hospital beds in a community, he said, and several studies have shown that to be the case in the city, "we haven't saved anything," because hospitals may raise their rates to cover the loss of business. But he said the foundation's legal responsibility is not room costs but to assure that quality services are performed in the appropriate setting.