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Medicaid Reimbursement for Common Spine Procedures

Are Compensation Rates Consistent?

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

doi: 10.1097/BRS.0000000000003241
HEALTH SERVICES RESEARCH
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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

Large disparities exist between Medicare and Medicaid reimbursement, when comparing identical procedures. Additionally, there is a large variability in reimbursement for spine procedures from one state to another. It is likely that these discrepancies lead to suboptimal access to necessary spine care.

Rothman Institute at Thomas Jefferson University Hospital, Philadelphia, PA

Sidney Kimmel Medical College at Thomas Jefferson University Hospital, Philadelphia, PA.

Address correspondence and reprint requests to David S. Casper, MD, Rothman Institute, 925 Chestnut St., 5t Floor. Philadelphia, PA 19107; E-mail: david.s.casper@gmail.com

Received 19 March, 2019

Revised 1 June, 2019

Accepted 20 June, 2019

The manuscript submitted does not contain information about medical device(s)/drug(s).

No funds were received in support of this work.

Relevant financial activities outside the submitted work: board membership, consultancy, grants, stocks, royalties.

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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MATERIALS AND METHODS

Utilizing online web searches, MCD physician reimbursement for eight separate spine procedures was identified for each state. Governmental websites for each state were utilized to collect fee schedules for each procedure. These online web searches were performed by searching for the state government sites, on an individual state basis. Only 46 states had fee-for-service physician payment schedules publically available for these procedures. Data were unavailable for Delaware, Kansas, Pennsylvania, and Tennessee. Procedures were identified by their common procedural terminology (CPT) codes (Table 1).

TABLE 1

TABLE 1

Variations in MCD reimbursement between states could be explained by an array of factors, including local governmental structure, variation in the cost-of-living between states, and state economic status. As local state markets vary widely throughout the nation, a national standardized method of comparison among individual state MCD rates is vital. Therefore, the MCR reimbursement for each specific CPT code in each state was identified from the Physician Fee Schedule for calendar year 2015 MCD.11 The general nonspecific region was utilized when there were multiple regions within a state on the MCR Physician Fee Schedule. Utilizing this form of methodology allowed for standardization of payments in comparison to cost-of-living across the country and thus allowed for a comparison between states of MCD payment as a percentage of MCR payment for that region.

To appreciate variation in reimbursement across states and between procedures, descriptive statistics for both MCD and MCR were reported. To compare reimbursement rates between individual procedures and regions (MCD reimbursement as a percentage of MCR), a Student t test was utilized.

Descriptive statistics were performed on reimbursement for both MCD and MCR for these eight common procedures. To compare reimbursement rates between MCD and MCR and among individual procedures, a two-tailed, Student t test was utilized.

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RESULTS

Reimbursement for each state and procedure was variable when comparing MCD to regional MCR reimbursement (Table 2 ). Including all states and spine procedures reported, MCD averaged a reimbursement that was 78.4% of MCR local reimbursement (P < 0.001). When comparing states, significant variation in the MCD reimbursement was noted (38.7%–145.0%; Table 3). Averaging all spine procedures, Florida, New York, New Jersey, and Rhode Island reimbursed MCD <50% of the local MCR reimbursement. Only four states reimbursed MCD higher than the local MCR reimbursement: Alaska, Arkansas, Nebraska, and South Dakota (Table 4). Twenty states provided MCD reimbursement <75% of MCR reimbursements, whereas 43 states provided <100% of MCR reimbursements.

TABLE 2

TABLE 2

TABLE 2 (Continued)

TABLE 2 (Continued)

TABLE 3

TABLE 3

TABLE 4

TABLE 4

Although state-to-state variation was consistent between different procedures, in states with higher MCD reimbursement, it is observed that microdiscectomy often led to this elevation. When isolating microdiscectomy, states appear to value it (84.2% of MCR) over the other spine procedures (78.0% of MCR; P = 0.1). Microdiscectomy also had the most interstate variation in MCD reimbursement: 39.0% to 207.0% of MCR.

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DISCUSSION

Within the American healthcare system, large disparities exist among access to care for patients and reimbursement for physicians. These two factors lead to suboptimal care provided to MCD patients in all fields of medicine. In 2015, the New England Journal of Medicine published an article on barriers to patient coverage and access and found that some barriers included narrow networks of providers accepting MCD.12 Using the National Ambulatory Medical Care Survey, Decker13 demonstrated that more than one-third of primary care physicians were not accepting new MCD patients in 2011. Difficulty with access to care for MCD patients also applies to surgical subspecialties. Patients with anterior cruciate ligament tears (ACL) and flexor tendon injuries also had difficulty obtaining appropriate care.14,15 Baraga et al14 found that patients with ACL tears who had private insurance were seen on average 14 days after their injury as opposed to an average of 56 days for those with MCD. With delays in appropriate follow-up for injured patients, emergency department visits often increase, which leads to a greater strain on the medical system and increased cost.

Owing to significantly lower rates of reimbursement, it is thought that fewer physicians are willing to take on new MCD patients, as they are unable to receive compensation commensurate with their services. Additionally, certain MCD plans lack specialty care altogether.16 To better quantify the disparity in MCD reimbursement for spinal surgery, this study evaluated physician compensation for MCR and MCD for eight different spinal procedures. The authors found that collection of state reported MCD reimbursement was often difficult to find and required laborious investigation. This issue in and of itself raises problems for practitioners, as a clear level of transparency is needed to understand reimbursement rates. Once these data were obtained and compared to MCR reimbursement, the level of discrepancy among several states was astounding. Four states paid <50% the reimbursement rate of MCR for identical spine surgeries. Although on average, state reimbursement for MCD was 78.4% that of MCR, there was a large amount of variability, and it is important to note that four states did have higher reimbursement rates for MCD over MCR (Table 2 ). It is likely that a large degree of the variation in MCD reimbursement among states is multifactorial, including such factors as local political climate, budget agendas, and individual state economics; however, a firm explanation of this wide variation remains unknown.

Regarding our study's limitations, MCD fee schedules were often difficult to obtain, and there is variation that does exist within regional MCR rates; therefore, a limitation of this study was verifying current true MCD and MCR reimbursement rates. Additionally, this study was limited to eight spinal procedures, which does not represent the total breadth of spine surgery. However, the authors felt that these eight procedures provided a fairly comprehensive overview of the field. It is possible that less commonly performed procedures may experience even larger variation in reimbursement rates. Finally, the relationship between lower reimbursement and access to care was not specifically examined within this study, but current literature supports this principle.17,18

Using consistent, fair reimbursement as a proxy to equal care, this study demonstrates the large disparity in reimbursement rates for MCD compared to MCR, and provides reasons as to why MCD patients often have difficulty obtaining appropriate medical care. Standardizing reimbursement rates among insurance providers to a level that is appropriate for the services provided would likely improve access to care for MCD patients. The difficult question that arises however is what defines appropriate reimbursement. Further investigation into MCD acceptance rates among practitioners in higher and lower areas of reimbursement, as well as reimbursement rates for private insurance policies, are avenues for future research. This investigation would help to better elucidate ideal compensation rates for physicians and increase access to care for patients.

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References

1. Knickman JR, Snell EK. The 2030 problem: caring for aging baby boomers. Health Serv Res 2002; 37:849–884.
2. SSA O. State plans for medical assistance n.d. Available at: https://www.ssa.gov/OP_Home/ssact/title19/1902.htm (accessed September 30, 2018).
3. Medicare C for, Baltimore MS 7500 SB, Usa M. NHE-Fact-Sheet 2018. Available at: https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet.html (accessed October 1, 2018).
4. Cowan JA, Dimick JB, Wainess R, et al. Changes in the utilization of spinal fusion in the United States. Neurosurgery 2006; 59:15–20.
5. Zaina F, Tomkins-Lane C, Carragee E, et al. Surgical versus non-surgical treatment for lumbar spinal stenosis. Cochrane Database Syst Rev 2016; CD010264.
6. Machado GC, Ferreira PH, Yoo RI, et al. Surgical options for lumbar spinal stenosis. Cochrane Database Syst Rev 2016; 11:CD012421.
7. Raad M, Donaldson CJ, El Dafrawy MH, et al. Trends in isolated lumbar spinal stenosis surgery among working US adults aged 40-64 years, 2010-2014. J Neurosurg Spine 2018; 29:169–175.
8. Wiznia DH, Nwachuku E, Roth A, et al. The influence of medical insurance on patient access to orthopaedic surgery sports medicine appointments under the Affordable Care Act. Orthop J Sports Med 2017; 5:2325967117714140.
9. Casper DS, Schroeder GD, Zmistowski B, et al. Medicaid reimbursement for common orthopedic procedures is not consistent. Orthopedics 2019; 42:e193–e196.
10. Lalezari RM, Pozen A, Dy CJ. State variation in medicaid reimbursements for orthopaedic surgery. J Bone Joint Surg Am 2018; 100:236–242.
11. Physician Fee Schedule - Centers for Medicare & Medicaid Services n.d. Available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/ (accessed April 1, 2017).
12. Sommers BD. Health care reform's unfinished work—remaining barriers to coverage and access. N Engl J Med 2015; 373:2395–2397.
13. Decker SL. Two-thirds of primary care physicians accepted new Medicaid patients in 2011-12: a baseline to measure future acceptance rates. Health Aff Proj Hope 2013; 32:1183–1187.
14. Baraga MG, Smith MK, Tanner JP, et al. Anterior cruciate ligament injury and access to care in South Florida: does insurance status play a role? J Bone Joint Surg Am 2012; 94:e183.
15. Draeger RW, Patterson BM, Olsson EC, et al. The influence of patient insurance status on access to outpatient orthopedic care for flexor tendon lacerations. J Hand Surg 2014; 39:527–533.
16. Dorner SC, Jacobs DB, Sommers BD. Adequacy of outpatient specialty care access in marketplace plans under the Affordable Care Act. JAMA 2015; 314:1749–1750.
17. Anandasivam NS, Wiznia DH, Kim C-Y, et al. Access of patients with lumbar disc herniations to spine surgeons: the effect of insurance type under the Affordable Care Act. Spine (Phila Pa 1976) 2017; 42:1179–1183.
18. Wiznia DH, Zaki T, Maisano J, et al. Influence of medical insurance under the affordable care act on access to pain management of the trauma patient. Reg Anesth Pain Med 2017; 42:39–44.
Keywords:

medicaid; medicare; reimbursement; spine

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