Spine surgery for Medicare patients in ASCs in 2015 — But will spine make good business sense?

The Centers for Medicare and Medicaid Services approved several new codes for spine surgery in ambulatory surgery centers, which is a big, controversial step. The new procedure codes on the ASC payable list for 2015 include the following:

• Neck spine fusion
• Lumbar spine fusion
• Spine fusion extra segment
• Neck spine disc surgery
• Laminectomy single lumbar
• Removal of spinal lamina (code 63045)
• Removal of spinal lamina (code 63047)
• Decompression spinal cord

"This means a sizable number of healthy, presumably younger Medicare patients can have their surgeries in a surgery center instead of having to go to the hospital," says Dr. Wohns. "This will give the benefit to younger Medicare patients to have surgery in the ASC, which is lower cost and higher quality than the hospital."

But will the payment for ASCs make sense? Medicare reimburses ASCs significantly less than hospitals and hospital outpatient departments. Spine procedures are expensive and surgeon owners won't be able to take cases into these centers if they come at a loss.

'The payment is adequate," says Dr. Wohns. "It still allows for profitability, but the key point is making sure implant costs are under control. Implants are a large percentage of the costs for these procedures and can cut into the profit margin, making the cases unprofitable. ASCs have to manage implant costs very carefully; they have to pick and choose their anterior plates, cages, and other implants and potentially eliminate some osteobiologics."

Medicare's approval for these cases opens the door for more commercial payers to reimburse for these procedures as well. Certain payers in certain regions of the country have been reluctant to approve spine surgery in ASCs — even with cost effectiveness and quality data available — because they base reimbursement on a percentage of Medicare. In other places, most payers have been onboard with outpatient spine for a while.

"In our location, we have all commercial payers and they are reimbursing for most cervical and many lumbar procedures," says Dr. Wohns. "In places where they don't approve anterior cervical fusions, for example, ASCs now have the ammunition they need to get through the medical policies to allow these cases to move into the ASC. That will benefit ASCs in regions where it's not the standard of care for all payers to approve ACDFs."

ASC owners and operators can negotiate contracts with commercial payers as a percentage of Medicare, but make sure you've got your cost statistics ready so you can negotiate a fair rate.

It will be easy for surgeons who already take cases to the ASC to begin bringing Medicare patients. Hospital-employed physicians may be able to take these cases into the hospital outpatient department more frequently, especially if CMS mandates these procedures for outpatient in the future. It may not even take CMS to prod in that direction.

"A savvy hospital will look at the DRGs and push their surgeons to provide the service at the highest profitability as long as it's safe," says Dr. Wohns.

Dr. Wohns was among the first surgeons to perform cases in an ASC and has been a pioneer in the field. He has published his data on outcomes and cost differential for spine surgeries in the ASC and hospital, truly making the case for spine in ASCs. Throughout the years, he has learned which patients do well with outpatient procedures and is now able to perform considerable volume at the center.

"Younger Medicare patients with minimal comorbidities and lower ASA scores are clear-cut candidates for many spine surgeries in ASCs," says Dr. Wohns. "In my practice, in the last three weeks alone, we did many anterior cervical fusions and quite a number had to be done in the hospital because they are Medicare patients. These were one-level ACDF patients where the procedure took around 35 minutes and they went home within 24 hours. Now we'll be able to provide all the benefits of outpatient spine surgery to Medicare beneficiaries."

Over time, performing appropriate Medicare cases in the ASC will be more efficient for the surgeon; they won't have to travel back and forth to the hospital for all Medicare cases and they can rely on the ASC's efficiency. Similarly, it will be better for Medicare patients to be cared for in an ambulatory setting with less chance of infection. The entire health care delivery system benefits due to lower cost for spine surgeries, which are increasingly necessary related to aging baby-boomers, a demographic that wants to remain active.

"The Medicare patients can use up block time in the ASC without taking up space in the hospital operating room, blocking access to patients who need the hospital ORs," says Dr. Wohns. "This increased volume will also give the average neurosurgeon around a 10 percent plus or minus increase in ASC profitability."

Here are a few key trends to watch for in the short and long term:

1. Possible increase in overnight stays at the ASC in the short term.
2. Possible initial increased need for outpatient rehabilitation or recovery.
3. Possible need for more vibrant contingency plan for Medicare patients if something goes wrong.
4. If codes are successful long term with expected cost-savings and no complications, more spine codes could be coming down the road.
5. Commercial payors may begin to lower reimbursement to Medicare levels now that there is a target price.

"CMS has approved the codes referable to the first types of cases I performed in the ASC setting 20 years ago for commercial insurance patients," says Dr. Wohns. "CMS has recognized the safety, improved patient satisfaction, and cost-effectiveness of the ASC setting for spine surgery, so we're moving forward."

More articles on surgery centers:
5 essential considerations when bringing total joints to ASCs
4 ASC industry leadership moves
5 hospitals, health systems opening in ASCs

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