A single decision in spine surgery can carry financial consequences far beyond the operating room.
From a proposed $155.5 million settlement involving allegations of unnecessary procedures to implant costs that vary by tens of thousands of dollars between surgeons, the stakes are growing for physicians, ASCs and health systems.
Recent Becker’s reporting highlights five decisions with significant financial implications, from determining when surgery is appropriate to deciding where procedures are performed and how their costs are managed.
1. When surgical volume creates legal exposure: Renton, Wash.-based Providence and Tacoma, Wash.-based MultiCare Health System agreed to pay a combined $155.5 million to settle class-action lawsuits alleging neurosurgeon Jason Dreyer, DO, performed unnecessary spine surgeries to increase productivity.
The proposed settlements remain subject to court approval. The health systems previously paid about $26.4 million combined to resolve related government fraud allegations, while Dr. Dreyer separately paid approximately $1.2 million.
2. When implant selection changes the economics of surgery: Implant selection can substantially affect whether a spine procedure is financially viable in an ASC. Jacob Rodman, CEO of Raleigh (N.C.) Neurosurgical Clinic, said his practice discovered significant differences in implant spending after opening its own surgery center and gaining access to cost data.
“We had one surgeon who was $30,000 to do a single-level lumbar fusion and another surgeon who was like $8,000,” Mr. Rodman said during a June Becker’s panel.
After comparing implant use, the surgeons agreed on a standardized approach and consolidated vendors, substantially reducing costs, according to Mr. Rodman.
Frank Phillips, MD, a spine surgeon at Chicago-based Midwest Orthopaedics at Rush, described another approach: negotiating a fixed $10,000 implant payment for a one-level fusion, regardless of the specific hardware used.
“We’re going to do a one-level fusion with an interbody cage and a biologic, and we’re paying you $10,000,” Dr. Phillips said, describing the arrangement with vendors.
The strategy gives ASCs greater predictability over one of their most significant procedural expenses, particularly as more spine fusions move to outpatient settings.
3. When malpractice risk influences which cases surgeons accept: The financial and professional consequences of malpractice litigation are also influencing how spine surgeons evaluate patients and approach complex procedures.
Issada Thongtrangan, MD, an endoscopic and minimally invasive spine surgeon at MicroSpine in Scottsdale, Ariz., said he has become particularly cautious about cases involving unclear surgical indications, unrealistic expectations and complex revision histories.
“I do not think litigation should drive clinical decisions, but it has absolutely made surgeons more careful about which cases we take on and how we approach them,” Dr. Thongtrangan told Becker’s. He emphasized the importance of reviewing prior imaging, confirming the source of pain and ensuring patients understand the realistic benefits and limitations of surgery.
David Weiner, MD, an assistant professor at Washington, D.C.-based Georgetown University Medical School and an orthopedic spine surgeon at MedStar Health in Columbia, Md., cautioned against allowing litigation concerns to prevent appropriate care. “Defensive decisions can harm patients too, particularly when fear leads surgeons to avoid people who have the greatest need,” Dr. Weiner said.
Their perspectives highlight a difficult balance: managing legal exposure without allowing financial risk to override clinical judgment.
4. When shifting surgical volume puts hospital revenue at stake: The decision to move spine procedures into ASCs can create significant financial tension between surgeons and hospitals.”Through different sources, I found out I generated $20 million in revenue for the trauma center I work at in one year,” Lali Sekhon, MD, PhD, a spine neurosurgeon at Reno (Nev.) Orthopedic Center told Becker’s. “They don’t want to lose that, and that is going to be a big challenge.”
Dr. Sekhon said financial incentives and reimbursement barriers continue to slow the migration of procedures such as single-level lumbar fusion to ASCs, despite their growing outpatient feasibility.
5. When an ASC procedure costs more than it pays: The expansion of outpatient surgery creates another consequential decision: whether a procedure makes financial sense for the facility performing it.
Ernest Braxton Jr., MD, a partner and neurosurgeon at Vail (Colo.) Summit Orthopaedics & Neurosurgery, said implant-intensive procedures such as multilevel fusions and complex reconstructions can carry costs approaching or exceeding an ASC’s total reimbursement.
“Adding a code to the covered list does not make it viable if the facility loses money every time the case is scheduled,” Dr. Braxton told Becker’s. He argued that CMS should provide payment adjustments for device-intensive procedures that better reflect actual implant costs.
Without adequate reimbursement, he said, patients who could otherwise undergo surgery safely in an ambulatory setting may continue to receive care in hospitals. The distinction is becoming increasingly important as outpatient eligibility expands: A procedure can be clinically appropriate for an ASC without being financially sustainable for the facility.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
