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The Spine Blog

Friday, November 8, 2019

Medicaid vs. Medicare Reimbursement for Spine Surgery

As the 2020 campaign starts to heat up, there is much discussion about how to best address the United States healthcare system. With plans ranging from a complete government takeover of health insurance (Medicare for All) to repealing "Obamacare" and privatizing more of the insurance market, the average American voter has understandably become overwhelmed by the entire topic. People do understand the concept of access to healthcare and doctors of their choice, and access is directly related to how much their insurance reimburses providers for their services. It is well-established that private insurance reimburses providers and hospitals more than Medicare or Medicaid. It is assumed that Medicare reimburses more than Medicaid, though Medicaid is administered at the state level, which introduces much more variation in reimbursement levels than exists in Medicare, which is administered on the federal level. In order to better understand how Medicaid reimbursements compare to Medicare reimbursements for spine surgery, Dr. Casper and colleagues from Thomas Jefferson Hospital in Philadelphia analyzed average Medicaid and Medicare reimbursements to spine surgeons for eight common spine procedures in 46 states (4 states did not disclose their Medicaid reimbursement rates publicly). Overall, they found that average Medicaid reimbursement was 78% of average Medicare reimbursement, with a range of 39%-140%. New York, New Jersey, Florida, and Rhode Island had average Medicaid reimbursements less than 50% of Medicare, with New York having the lowest Medicaid:Medicare reimbursement ratio of 39%. Nebraska, Alaska, South Dakota, and Arkansas all had average Medicaid reimbursements greater than average Medicare reimbursements, with the highest ratio in Nebraska (140%). Microdiskectomy had the highest variability in Medicaid:Medicare reimbursement ratio, and overall had the highest reimbursement ratio (84%, range 39%-207%).

The variation in Medicaid reimbursements to spine surgeons is striking, though not surprising given interstate variation in all political issues. Prior studies have made it clear that Medicaid patients have less access to healthcare overall, and one study demonstrated that fewer than 1% of spine surgeons would see a disc herniation patient with Medicaid (compared to 95% for patients with BlueCross).1 The current study did not include data for private insurance reimbursement, which provides coverage for the majority of Americans. These data are generally proprietary and have not been well-studied. One paper on the topic looking at hospital system reimbursement (including technical and professional fees) for single level lumbar laminectomy and instrumented posterolateral fusion demonstrated mean reimbursement of $12,000 by Medicaid, $37,000 by Medicare, and $54,000 by private insurance.2 While not as well-established as the two-tiered public/private healthcare system in the United Kingdom, this huge disparity in reimbursement among different insurance plans clearly results in a tiered system in the United States as well. Very few surgeons and hospital systems are going to find it profitable to care for patients at Medicaid rates, and this is why the majority of spine surgeons do not accept Medicaid and many limit the number of Medicare patients they will see. Articles like this generally do not reach the general public, but raising awareness of how reimbursement at Medicaid rates significantly limits access to care could help to inform the debate around health insurance in the United States. A main pillar in Obamacare was Medicaid expansion, which has occurred. This has reduced the number of uninsured patients and has been touted as a success. However, many of these supposedly "insured" patients still do not have timely access to high-quality healthcare, and the American public should understand this.

Please read Dr. Casper's article on this topic in the November 15 issue. What do you think about Medicaid reimbursement rates and how this affects access to spine surgery? Let us know by leaving a comment on The Spine Blog.

Adam Pearson, MD, MS

Associate Web Editor

REFERENCES

1.            Anandasivam NS, Wiznia DH, Kim CY, Save AV, Grauer JN, Pelker RR. 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;42:1179-83.

2.            Lyons KW, Klare CM, Kunkel ST, et al. A 5-Year Review of Hospital Costs and Reimbursement in the Surgical Management of Degenerative Spondylolisthesis. Int J Spine Surg 2019;13:378-85.