Reaching the medicare allowable threshold in adult spinal deformity surgery: multicenter cost analysis comparing actual direct hospital costs versus what the government will pay.

Abstract

Study design

Retrospective multicenter cost analysis.

Objective

To (1) determine if index episode of care (iEOC) costs of Adult Spinal Deformity (ASD) surgeries are below the Medicare Allowable (MA) threshold, and (2) identify variables that can predict iEOC cases that are below MA. Previous studies have suggested that actual direct hospital cost of Adult Spinal Deformity (ASD) surgery is higher than Medicare Allowable (MA) rates, which has become the benchmark reimbursement target for hospital accounting systems.

Methods

From a prospective, multicenter ASD surgical database, patients undergoing long instrumented fusions (> 5 level) with cost data were identified. iEOC cost was calculated utilizing actual direct hospital cost. MA rates were calculated using hospital specific, year-appropriate CMS Inpatient Pricer Payment System. Recursive partitioning identified potentially modifiable variables that can predict iEOC cost < MA.

Results

Administrative direct cost data from 210 patients were obtained from 4 of 11 centers. Ninety-five (45%) patients had iEOC cost < MA. There was significant variation across the four centers in both iEOC cost ($56,788-$78,878, p < 0.0001) and reimbursement ($40,623-$91,351, p < 0.0001) across deformity-specific DRGs (453,454,456,457). Academic centers were more likely to have iEOC costs < MA (67.2% vs 8.9%, p < 0.0001). Recursive partitioning (r2 = 0.309) identified rhBMP-2 use of < 24 mg, sagittal plane deformity, a combined anterior/posterior approach, and an SF36-MCS < 39 as predictive for iEOC cost < MA. Performing an anterior/posterior approach reimburses between 14.7% and 121.1% more (2.2-fold) than posterior-only approach. This change in DRG allows iEOC cost to be more likely below the MA threshold.

Conclusion

There is significant institutional (private vs academic) variation in ASD reimbursement. BMP use, deformity type, approach, and baseline mental health impact ASD surgery cost being below Medicare reimbursement. ASD surgeries with anterior/posterior approaches are in DRGs that can potentially reimburse 2.2-fold the posterior-only surgery, making it more likely to fall below the MA threshold.

Level of evidence

III.

Department

Description

Provenance

Citation

Published Version (Please cite this version)

10.1007/s43390-021-00405-4

Publication Info

Gum, Jeffrey L, Breton Line, Leah Y Carreon, Richard A Hostin, Samrat Yeramaneni, Steven D Glassman, Douglas L Burton, Justin S Smith, et al. (2022). Reaching the medicare allowable threshold in adult spinal deformity surgery: multicenter cost analysis comparing actual direct hospital costs versus what the government will pay. Spine deformity, 10(2). pp. 425–431. 10.1007/s43390-021-00405-4 Retrieved from https://hdl.handle.net/10161/28035.

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