Surgeon Reimbursement Relative to Hospital Payments for Spinal Fusion: Trends From 10-year Medicare Analysis

STUDY DESIGN.Retrospective, economic analysis OBJECTIVE.To analyze the trend in hospital charge and payment adjusted to corresponding surgeon charge and payment for cervical and lumbar fusions in a Medicare sample population from 2005-2014. SUMMARY OF BACKGROUND DATA.Previous studies have reported trends and variation in hospital charges and payments for spinal fusion, but none have incorporated surgeon data in analysis. Knowledge of the fiscal relationship between hospitals and surgeons over time will be important for stakeholders as we move toward bundled payments. METHODS.A 5% Medicare sample was used to capture hospital and surgeon charges and payments related to cervical and lumbar fusion for degenerative disease between 2005 and 2014. We defined hospital charge multiplier (CM) as the ratio of hospital/surgeon charge. Similarly, the hospital/surgeon payment ratio was defined as hospital payment multiplier (PM). The year-wise and regional trend in patient profile, length of stay, discharge disposition, CM and PM were studied for all fusion approaches separately. RESULTS.40,965 patients, stratified as 15,854 cervical and 25,111 lumbar fusions were included. The hospital had successively higher charges and payments relative to the surgeon from 2005–2014 for all fusions with an inverse relation to hospital length of stay. Increasing complexity of fusion such as for anterior-posterior cervical fusion had higher hospital reimbursements per dollar earned by the surgeon. There was regional variation in how much the hospital charged and received per surgeon dollar. CONCLUSION.Hospital charge and payment relative to surgeon had an increasing trend despite a decreasing length of stay for all fusions. While the hospital can receive higher payments for higher-risk patients, this risk is not reflected proportionally in surgeon payments. The shift toward value-based care with shared responsibility for outcomes and cost will likely rely on better aligning incentives between hospital and providers.Level of Evidence3