Medicare charges and payments for cervical spine surgery: Influence of hospital characteristics Richard L. Skolasky, ScD Department of Orthopaedic Surgery, Associate Professor Spine Outcomes Research Center, Director
Medicare charges and payments for cervical spine surgery: Influence of hospital characteristics Skolasky RL and Riley LH III
Background Previous research has demonstrated the importance of geographic variation on hospital charges 1,2 The influence of other characteristics is not well understood
Background March 2013, CMS Physician Payment “Sunshine” Final Rule 3 PPACA mandated increased transparency in health care costs and charges CMMS released 2011 Inpatient Prospective Payment System data
Objective To determine the influence of hospital characteristics on the average covered charge and total payments for Medicare patients undergoing cervical spine fusion
Methods Medicare Inpatient Prospective Payment System (IPPS) Extract hospital level data cervical spine fusion (without complication or major complication, DRG 473) Average covered charge: hospital charge for items and services Total payment: Medicare reimbursement
Methods Nationwide Inpatient Sample (NIS) Extract hospital discharge data (DRG 473) Hospital characteristics: bed size; ownership; location; teaching status; geographic region
Methods Identified unique hospitals and matched on unique hospital identifiers Estimate relationship between cost and hospital characteristics Univariate Multivariate
Results Cost data Average covered charge $65,574 (SD $28,858) Average Total payment $15,199 (SD $3,277)
Results Characteristic Percent Average covered Total payment charge Bed size Small 9.7% $60,516 ($17,177) $14,902 ($2,610) Medium 31.6% $58,134 ($20,590) $13,808 ($1,858) Large 58.7% $69,837 ($32,765) $15,899 ($3,684) Gov’t or private Ownership 49.1% $67,276 ($32,944) $16,206 ($3,791) Gov’t, non federal 7.0% $59,784 ($4,465) $13,806 ($4,204) Private, not for profit 26.3% $65,521 ($27,138) $14,654 ($2,315) Private, investor-owned 14.9% $69,094 ($19,654) $13,653 ($1,951) Private 2.6% $40,092 ($19,481) $13,592 ($2,468)
Results Characteristic Percent Average covered Total payment charge Location Rural 5.3% $48,689 ($18,112) $14,082 ($2,119) Urban 94.5% $67,955 ($29,372) $15,356 ($3,390) Teaching Non-teaching 59.6% $63,380 ($22,820) $14,599 ($2,429) Teaching 40.4% $69,680 ($37,772) $16,320 ($4,278) Region Northeast 7.9% $55,921 ($18,348) $15,324 ($1,748) Midwest 20.2% $73,474 ($40,454) $17,130 ($4,074) South 32.5% $62,066 ($19,281) $13,616 ($2,499) West 39.5% $64,956 ($27,819) $15,276 ($2,769)
Results $30,000 $20,000 $10,000 $0 -$10,000 -$20,000 -$30,000 Average Total Charge Average Total Payment
Conclusions Hospital characteristics have significant influence on total charges The influence of these characteristics on total reimbursement is moderated
Conclusions Variation by geography, urban, and teaching may reflect differential implementation of new technologies 4 Reasons for variation by size and ownership are not clear
References 1. Alosh H, Riley LH 3 rd , Skolasky RL. Health care burden of anterior cervical spine surgery: National trends in hospital charges and length of stay, 2000 to 2009. 2. Weinstein JN, Lurie JD, Olson PR, Bronner KK, Fisher ES. United States’ trends and regional variation in lumbar spine surgery: 1992-2003. 3. “CMS Physician Payment ‘Sunshine’ Final Rule – Overview and Analysis” Health Industry Washington Watch, http://www.healthindustrywashingtonwatch.com/2013/03/articles/regulatory- developments/cms-physician-payment-sunshine-final-rule-overview-and-analysis/. December 4, 2013. 4. Weinstein JN, Lurie JD, Olson PR, Bronner KK, Fisher ES. United states' trends and regional variations in lumbar spine surgery: 1992-2003. Spine. 2006;31:2707-2714.
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