Trends in Physician Reimbursement for Spinal Procedures Since 2010

Joshua E. Meyers, MD; Jiefei Wang, MA; Asham Khan, MD; Jason M. Davies, MD, PhD; John Pollina, MD

Disclosures

Spine. 2018;43(15):1074-1079. 

In This Article

Abstract and Introduction

Abstract

Study Design: Retrospective cohort study.

Objective: To identify trends in spinal procedure reimbursement in our practice since 2010.

Summary of Background Data: In an uncertain healthcare climate with continuous reform, trends in physician reimbursement are unclear. Market forces of supply and demand, legislation imposing penalties for quality measures, local competition, and geographic location have the potential to affect reimbursement. An emphasis on quality-of-care and cost reduction is placed on providers and insurers. In a high-cost area such as spine surgery, it is unknown what the reimbursement trends have been over the last 7 years of major healthcare reforms.

Methods: We collected payments received data for the 20 most commonly billed Current Procedural Terminology (CPT) codes for spinal surgery from January 2010 to December 2016. Payments were adjusted for inflation using the Consumer Price Index for Medical Care in the Northeastern United States. Insurers were separated into four groups: Medicare, Medicaid, Private Insurance, and Workers Compensation and No Fault (WC/NF). Using a weighted average to adjust for variation in procedures performed, average payments were trended over time. Average payments were trended by insurance group averaged by CPT code.

Results: After adjusting for inflation, average overall payments for spinal claims from 2010 to 2016 increased 13.6%. Average reimbursement declined 1.9% from 2010 to 2013 and rose 16.8% from 2014 to 2016. Average Medicaid payments increased 150.1% since 2010 whereas average Medicare payments rose 4.9%. Average reimbursement from private insurers and WC/NF claims decreased 16.2% and 8.5%, respectively, from 2010 to 2013; increasing 14.2% and 12.5%, respectively, from 2014 to 2016. From 2010 to 2016, reimbursement for private insurance decreased 9.3% and increased 8.2% for WC/NF claims.

Conclusion: Since 2010, inflation-adjusted reimbursement for spinal procedures increased in our practice. There was a decline from 2010 to 2013. Increases occurred from 2014 to 2016 across all insurers. Medicaid payments more than doubled since 2010.

Introduction

Healthcare reform has remained in the forefront of major discussions for the last decade. Large healthcare overhauls can have wide-ranging effects on physicians, patients, hospitals, and insurers. It remains unclear how reimbursement has trended over the last several years with an uncertain healthcare climate. Despite healthcare reforms having the potential to influence physician reimbursement rates, they remain multifactorial and have many potential sources of influence. These include inflation, government fee schedules, local and regional competition, economic principles of supply and demand, and the political environment, including legislation and malpractice.

Several features exist in current healthcare reform that could affect reimbursement. First, the number of patients receiving insurance primarily through Medicaid expansion and the development of healthcare exchanges has increased, and restrictions have been placed on insurers to prevent them from imposing limits on coverage or denying coverage for preexisting conditions. The Department of Health and Human Services estimates that more than 20 million additional adults now have health insurance.[1]Medicaid has seen the largest increase in the number of newly insured, increasing by more than 17 million people.[2] With the increase in healthcare demand due to millions of additional patients seeking medical care, coupled with a similar supply of physicians, prices have the potential for increase. Secondly, value-based payment modifiers and required reporting to the Centers for Medicare and Medicaid Services through the Physician Quality Reporting System have had a direct effect on the amount of money a physician receives. These requirements increase Medicare payments by 4% or impose penalties of up to 6% of Medicare payments for not participating.[3] In addition, under current law, the Secretary of Health and Human Services reviews procedural codes and adjust the fee schedule for misvalued codes. This adjustment has had a direct effect on reducing the 0.5% increase in the 2016 Medicare physician fee schedule that was called for by recent Medicare payment reform.[4] Lastly, medical loss ratios require insurers to spend at least 80% to 85% of the premium dollars on the healthcare costs of its beneficiaries or quality improvement. This has resulted in an increase in medical claims paid across all insurers from $261.3 billion to $264.4 billion in 2011 and 2013, respectively.[5]

Spinal surgery has experienced a rapid increase in utilization and cost over the last 2 decades. In 2003, spinal fusions were designated the 19th most common inpatient procedure performed in the United States.[6] It is estimated that 3.6 million spinal fusions were performed between 2001 and 2010 at a cost of $287 billion.[7] Our objective was to analyze the trends in physician reimbursement in spinal surgery since 2010 over a period when healthcare reform has dramatically changed. With an emphasis on improving quality of care at a lower cost, we postulate that reimbursement rates have changed in high-cost areas of healthcare, such as spinal surgery. However, we do not know if reimbursement has increased, decreased, or remained the same. We examined the trends in reimbursement for spinal procedures by analyzing claim payment data in our practice in the Northeastern United States across a variety of Current Procedural Terminology (CPT) codes from all insurers. We examined these trends by major insurance type while controlling for variation in procedures and inflation.

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