Drivers of Episode Payments for Non-Cervical Spinal Fusion

Document Type

Conference Proceeding

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Publication Title

Spine J


BACKGROUND CONTEXT: Through alternative payment models, like those developed by the Centers for Medicare & Medicaid Services and some private payors, payments for spine surgery may now come through bundled payments for “episodes of care.” Previous publications on episode costs in spine surgery have examined all-type spinal operations, which have variations too large in costs of index hospitalizations. PURPOSE: Identify drivers of variations in the 90-day episode costs for non-cervical spinal fusions across hospital systems. STUDY DESIGN/SETTING: Retrospective cohort study. PATIENT SAMPLE: The Michigan Value Collaborative (MVC) database was queried for 90-day episodes of care for non-cervical spine fusions. The MVC maintains a detailed claims-based registry of comprehensive 90-day episodes of care that includes charges, payor payments and utilization surrounding an admission at any one of the 79 participating acute care hospitals across the state. These hospitals were partitioned into four equally-sized quartiles based on episode payments. OUTCOME MEASURES: Claims during the 90-day episodes of care were divided into one of four categories: index hospitalization, professional services, readmissions and post-acute care. The primary outcome measure was to identify which category varied the most across the hospital quartiles for episode payments. METHODS: The four hospital quartiles of price-standardized and risk-adjusted payments for spinal surgeries were compared via descriptive statistics, reporting means ± standard deviations or frequencies/percentages. We used chi-square tests to compare patient characteristic differences and t-tests to compare payments at low- versus high-cost hospitals. We also calculated the percentage of total payment variation contributed by each payment component. RESULTS: Among 10,168 non-cervical spinal fusions, 90-day episode payments averaged $42,879. Payments were 17.7% greater among highest-spending than lowest-spending quartile hospitals ($47,124 vs $38,753, p<0.0001). Index hospitalization accounted for majority of payments: 73.3% in the lowest, 69.1% in the second, 63.8% in the third and 62.5% in the highest quartile. However, the maximum percent variation between the highest- and lowest-quartile hospitals reached 51.4% in post-acute care, followed by 22.0% in professional fees, 14.2% in readmissions and 12.4% in index hospitalizations. In other words, the total $8,371 episode payment difference between the highest- and lowest-quartile hospitals was attributable to post-acute care ($7,478 vs $3,178, p<0.0001), then professional fees ($7,675 vs $5,836, p<0.0001), readmissions ($2,497 vs $1,307, p=0.018), and index hospitalizations ($29,474 vs $28,432, p=0.019). Among sub-types of post-acute care services, the greatest difference between lowest and highest quartiles was inpatient rehab ($2,169, p=0.004), then skilled nursing facilities ($1,822, p=0.007) and home health ($785, p=0.007). CONCLUSIONS: Post-acute care, especially inpatient rehabilitation, is the primary driver of variation in 90-day episode payments for non-cervical spine fusions. Strategies for success in bundled payment initiatives will require attention to potentially discretionary use of post-acute care after index hospitalization. FDA DEVICE/DRUG STATUS: This abstract does not discuss or include any applicable devices or drugs.





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