Total disc replacement cost growth far outpacing reimbursement

Spine

Hospital charges for elective total cervical disc replacement increased significantly from 2009 to 2019, Medicare reimbursement hasn't kept up, according to a study published in the November 2023 issue of the Journal of Neurosurgery.

The researchers examined the Medicare Provider Analysis and Review Limited Data Sets for 2009, 2014 and 2019 to gather data on patients who underwent elective cervical disc replacement. They used the Medicare Physician Fee Schedule Look-Up Tool to gather data on the physician fees and adjusted for inflation based on the Consumer Price Index.

The researchers found:

1. The average hospital charges for elective cervical disc replacement jumped 73% over the study period to $111,874 ± $78,611 by 2019 and total cost of index hospital admissions jumped 26% to $24,682 ± $13,818.

2. Medicare reimbursement over the same period increased just 15% to $12,879 ± $13,613 and total reimbursement was up just 4% over the decade studied.

3. Hospital profit from cervical disc replacements dropped 121%.

4. The reimbursement to surgeons for cervical disc replacement dropped 7% over the decade to $1722 ± $138.

5. During the study period, the medical and surgical supply charges jumped 71.6% and operating room charges grew 98%. The medical and surgical supply charges accounted for about 42% of the procedure costs on average while the OR charges comprised around 30% to 35% of total charges.

"From 2009 to 2019, costs of care for elective inpatient CDA increased disproportionately to reimbursement. Hospitals operated at increasing losses and surgeon reimbursement decreased," study authors concluded, noting the results could have implications for the feasibility of inpatient cervical disc replacement in the future.

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