Recent trends in medicare utilization and reimbursement for lumbar spine fusion and discectomy procedures

Background Context Understanding the scope of the volume and costs of lumbar fusions and discectomy procedures, as well as identifying significant trends within the Medicare system, may be beneficial in enhancing cost-efficiency and care delivery. However, there is a paucity of studies which analyze recent trends in lumbar fusion volume, utilization, and reimbursements. Purpose This study seeks to define the costs of lumbar fusions and discectomy procedures and identify trends and variations in volume, utilization, and surgeon and hospital reimbursement rates in the Medicare system between 2012 and 2017. Study Design Retrospective database study Patient Sample Medicare Part A and Part B claims submitted for lumbar spine procedures from 2012 to 2017, as documented in the Centers for Medicare & Medicaid Services (CMS) Physician and Other Supplier Public Use Files. Outcome Measures Procedure numbers and payments per episode. Methods This cross-sectional study tracked annual Medicare claims and payments to spine surgeons using publicly-available databases and aggregated data at the county level. Descriptive statistics and multivariate regression models were used to evaluate trends in procedure volume, utilization rates (per 10,000 Medicare beneficiaries), and reimbursement rates, and to examine associations between county-specific and lumbar spine procedure utilization and reimbursements. Results A total of 772,532 lumbar spine procedures were performed in the Medicare population from 2012 to 2017, including 634,335 lumbar fusion surgeries and 138,197 primary lumbar discectomy and microdiscectomy single-level surgeries. There was a 26.0% increase in annual lumbar fusion procedure volume during the study period, with a compound annual growth rate (CAGR) of 4.7%. Lumbar discectomy/microdiscectomy experienced a 23.5% decrease in annual procedure volume (CAGR, -5.2%). Mean Medicare surgeon reimbursements for lumbar fusions nominally decreased by 3.7% from $767 in 2012 to $738 in 2017, equivalent to an inflation-adjusted decrease of 11.4% (CAGR, -0.7%). Mean Medicare payments for lumbar discectomy and microdiscectomy procedures nominally increased by 16.3% from $517 in 2012 to $601 in 2017, equivalent to an inflation-adjusted increase of 6.9% (CAGR, 3.1%). Conclusions This current study found the volume and utilization of lumbar fusions have increased since 2012, while lumbar discectomy and microdiscectomy volume and utilization have fallen. Medicare payments to hospitals and surgeons for lumbar fusions have either declined or not kept pace with inflation, and reimbursements for lumbar discectomy and microdiscectomy to hospitals have risen at a disproportionate rate compared to surgeon payments. These trends in Medicare payments, especially seen in decreasing allocation of reimbursements for surgeons, may be the effect of value-based cost reduction measures, especially for high-cost orthopedic and spine surgeries.