10 Observations on Spine Surgery Coverage Across the United States

Written by Laura Dyrda | July 11, 2014 | Print  |

Spine surgery is one of the more expensive procedures to the healthcare system, and payers are pushing for stricter coverage guidelines across the country.

However, new reports show a wide variation in payment and note several factors impacting the cost of care, including implant costs, hospital length of stay, surgical setting and where the patient is discharged after surgery. In some cases, new procedures shown clinically effective in the literature are becoming more accepted by insurance companies and could play a bigger role in the field going forward.


Here are 10 observations on spine surgery coverage:


1. Cigna reported earlier this year around 15 percent of their patients who underwent spinal fusions had additional surgery and the total cost of post-surgery claims was $11 million. The study was conducted using data from 2011 and after seeing the results, Cigna tightened coverage policies.


2. In June 2013, Blue Cross Blue Shield of Kansas updated their spinal fusion policy and a local newspaper reported that one year later patients were having a harder time accessing spine care, even when BCBS of Kansas in-network physicians recommended a surgical procedure. The new policy requires patients to first try all other non-surgical options and provide documentation over a specific period of time before the insurance company will approve procedures. The surgery may still be denied if an initial reviewer deems the procedure "medically unnecessary" but there is a repeal process. Surgeons have run into similar situations across the country.


3. GlobalData recently updated its outlook on spinal fusion, lowering the expected annual growth rate from 10 percent to 5 percent through 2020. The company attributes this to reimbursement changes across the country and increased denials. The new protocol from insurance companies to document conservative care before approving surgery also slows the process, meaning fewer procedures will likely be performed in the future if current trends continue.


4. Despite slower spinal fusion growth, the nonfusion market is still poised to triple in size through 2020, surpassing $1.6 billion. This includes cervical disc replacements, which have been gaining traction among payers. Now the FDA has approved LDR's two-level cervical artificial disc and the CPT Editorial Committee gave the procedure a Category I code beginning January 2015.


5. Lower reimbursement for approved spine surgery is reported across the board. To counter losses, many surgeons have begun using physician extenders and performing in-office therapy and imaging where possible as an extra source of revenue. Surgeons are also able to incorporate in-office durable medical equipment and have ownership interest in ambulatory surgery centers.


6. Medicare does not currently reimburse for spine surgery in ambulatory surgery centers; only a few simple procedures and interventional spine procedures are reimbursed in the ASC. However, Senior Manager, Coding & Coverage Access at Specialty Healthcare Advisers Carolyn Neumann, CPC, has seen private payers become more willing to pay for outpatient spine procedures in high quality, lower cost settings. Since coding standards are primarily designed for Medicare, the coding pathways can be complicated for private outpatient payer contracts.


7. Significant bundling in spine surgery procedures also lowers overall reimbursement. Bundling procedures into the primary CPT code occurs among both private and Medicare payers. Additionally, some surgeons have reported denied claims because payers updated coverage protocol or coding for spinal procedures without notifying surgeon offices.


8. Risk-sharing payment models are becoming more popular in several specialties, though just scratching the surface in spine. A July 2014 study published in Spine found wide variation for patient DRGs undergoing cervical or lumbar spine surgery — $11,180 to $107,642 for 30-day bundles. Costs were relatively flat for both 30-day and 90-day bundles, with hospital payments accounting for 76 percent of the charges. To risk-sharing models in the future, providers are calculating total cost of care and looking for areas to standardize processes and eliminate waste.


9. Minimally invasive sacroiliac joint fusion is growing across the country. The procedure will have a Category I CPT code on Jan. 1, 2015 and Medicare contractor Novitas reported it would cover the procedure on a case-by-case basis beginning in May 2014. Earlier in the year, Medicare contractor Palmetto GBA also agreed to cover the procedure.


10. Medicare released physician payment data from 2011 to 2012 in early 2014 and CBS reported on the average data as well as released information on every spine surgeon participating in Medicare. While it's unclear how this level of data transparency will impact coverage in the future, payers, government agencies and patients could use the information to identify surgeons with high spinal fusion utilization rate. The report found the average surgeon performs 46 spinal fusions annually.


More Articles on Spine Surgery:
Spine Surgery Episodes of Care: $9k Medicare Payment Variation
5 Statistics on Hourly Wages for Neurosurgeons
A Game-Changer: The Future of Spinal Biologics

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