Medicaid Reimbursement for Common Spine Procedures

Are Compensation Rates Consistent?

David S. Casper, MD; Gregory D. Schroeder, MD; James McKenzie, MD; Benjamin Zmistowski, MD; Jayanth Vatson, BS; John Mangan, MD; Justin Stull, MD; Mark Kurd, MD; Jeffrey A. Rihn, MD; D. Greg Anderson, MD; David I. Kaye, MD; Kris Radcliff, MD; Barrett Woods, MD; Alan S. Hilibrand, MD; Alexander R. Vaccaro, MD, PhD, MBA; Christopher K. Kepler, MD, MBA

Disclosures

Spine. 2019;44(22):1585-1590. 

In This Article

Abstract and Introduction

Abstract

Study Design: Health Services Research.

Objective: The purpose of this study is to determine the variability of Medicaid (MCD) reimbursement for patients who require spine procedures, and to assess how this compares to regional Medicare (MCR) reimbursement as a marker of access to spine surgery.

Summary of Background Data: The current health care environment includes two major forms of government reimbursement: MCD and MCR, which are regulated and funded by the state and federal government, respectively.

Methods: MCD reimbursement rates from each state were obtained for eight spine procedures, utilizing online web searches: anterior cervical decompression and fusion, posterior cervical decompression and fusion, posterior lumbar decompression, single-level posterior lumbar fusion, posterior fusion for deformity (less than six levels; six to 12 levels; 13+ levels), and lumbar microdiscectomy. Discrepancy in reimbursement for these procedures on a state-to-state basis, as well as overall differences in MCD versus MCR reimbursement, was determined. Procedures were examined to identify whether certain surgical interventions have greater discrepancy in reimbursement.

Results: The average MCD reimbursement was 78.4% of that for MCR. However, there was significant variation between states (38.8%–140% of MCR for the combined eight procedures). On average, New York, New Jersey, Florida, and Rhode Island provided MCD reimbursements <50% of MCR reimbursements in the region. In total, 20 and 42 states provided <75% and 100% of MCR reimbursements, respectively. Based upon relative reimbursement, MCD appears to value microdiscectomy (84.1% of MCR; P = 0.10) over other elective spine procedures. Microdiscectomy also had the most interstate variation in MCD reimbursement: 39.0% to 207.0% of MCR.

Conclusion: Large disparities were found between MCR and MCD when comparing identical procedures. Further research is necessary to fully understand the effect of these significant differences. However, it is likely that these discrepancies lead to suboptimal access to necessary spine care.

Level of Evidence: 4

Introduction

With an aging population and increased life expectancy, the modern health care system will see an increase in patients with degenerative spinal disorders. By the year 2030, it is projected that 61 million people will be between the ages of 66 and 84 years.[1] Having a larger patient volume necessitates further improvement in providing consummate, yet cost-effective, care. In addition to an increase in elderly patients who are typically covered by Medicare (MCR) insurance, it is expected that the number of patients covered under state funded Medicaid (MCD) will also increase. MCR and MCD represent two major payers for physician reimbursement, particularly in the elderly and low-income populations. MCR is a federally funded health care provider, whereas MCD is controlled at the state level with Federal Government contributions.[2] In 2016, National Healthcare Expenditure (NHE) grew to $3.3 trillion, which represented 17.9% of the Gross Domestic Product. MCR and MCD spent $672 billion and $565 billion at that time, which was 20% and 17% of NHE, respectively. Additionally, MCR and MCD covered approximately 55 million and 68.5 million beneficiaries at that time, respectively.[3] With such a large volume of patients covered by these payers, it is critical for surgeons to understand MCR and MCD reimbu rsement and how the policies work. Owing to an aging population, current literature supports a steady increase in spinal surgery, and thus for medical practitioners, the understanding of reimbursement models is paramount.[4–7]

The Center for Medicare and Medicaid Services oversees state run MCD funding. They require that states provide MCD funding that ensures the amount of care necessary to limit negative outcomes. Individual states are open to interpret the definition of "limit negative outcomes" and therefore set individualized reimbursement for surgical procedures. With such loose guidelines, a diverse reimbursement rate for spinal procedures across different states is expected.

The Affordable Care Act was implemented with the goal of providing greater MCR and MCD coverage and overall healthcare enrollment. Early evidence demonstrates that MCD and Children's Health Insurance Program enrollment has increased by 27.5% between 2013 and 2017, to a total of 73 million beneficiaries.[3] With a greater number of patients insured by MCD, it is important that reimbursement models are sufficient and comparable to MCR to encourage physicians to accept MCD as a form of payment. Wiznia et al conducted a study in which the authors attempted to obtain an office visit for a 25-year-old male at an orthopedic sports surgeon's office. They found that when the office was told that the patient had MCD for insurance, he was granted an appointment only 27.1% of the time compared to 91.2% of the time with private insurance.[8] Additionally, within general orthopedics, it has been shown that large variations exist for MCD reimbursement between states.[9,10]

Therefore, the purpose of this study is to calculate the MCR and MCD reimbursement rates for eight common spine procedures for each state and to elucidate any disparities among MCD and MCR, or state-to-state reimbursement.

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