New spine codes offer numerous benefits for physicians, ASCs

In October 2014, the Centers for Medicare and Medicaid Services added 9 new spine and neck codes to its list of reimbursable procedures that can now be performed at ambulatory surgery centers.

As of January 1, 2015, the following nine codes are payable as separate procedures:

•Neck spine fuse&remov bel c2(22551)
•Neck spine fusion (22554)
•Lumbar spine fusion (22612) •Neck spine disk surgery (63020)
•Low back disk surgery (63030) •Laminotomy single lumbar (63042)
•Removal of spinal lamina (63045)
•Removal of spinal lamina (63047)
•Decompress spinal cord (63056)

CMS approval of these codes followed an industry-led initiative to educate regulators on why these common spine procedures can be successfully and safely migrated to ASCs -- and performed at a much lower cost to taxpayers and patients than in a traditional inpatient setting. Even more, while some private payers have a long history of reimbursing ASCs for these cases, the new CMS guidance undoubtedly will pave the way for more insurance companies to take a second look at approving more ASC procedures. This expected shift would offer ASCs and physicians to take advantage of a variety of shifting dynamics in the national healthcare marketplace, including:

Higher volume
Today, millions of individuals in the United States suffer from chronic daily back pain. In its report “The US Spinal Surgery Market Outlook to 2017- Ageing population and Technological Advances to Intensify the Competition,” Ken Research estimates the total annual price tag for back pain in the United States -- including diagnosis, treatment and rehabilitation -- to be $50 billion.

Back pain sufferers in the United States also seek more surgical treatment than anywhere else in the world, according to Koncept Analytics data. The firm expects this trend to continue well into the future, as active baby boomers continue to retire and more advance treatments reach the marketplace.

“The US is the largest market for spinal surgeries and is expected to achieve significant growth on the account of aging population, growing number of younger patients, changing lifestyles and product innovations,” Koncept concluded.

Ken Research’s findings largely underscore these forecasts. The firm’s data shows that compounded annual revenue growth for U.S. spine procedures increased by nearly 6 percent between 2007 and 2012 – and is showing no signs of it letting up: Between now and 2017, Ken Research expects outlays for U.S. spine procedures to increase 4.8 percent annually.

“The revenues are estimated to largely be driven from the treatment of elderly patients in the US suffering from spine ailments,” the firm concluded.

Novel procedures
An aging U.S. population and increased reimbursements likely will not be the only factors affecting spine centers in the coming years. Clinical advancements, too, are expected to continue to play a major role. According to Koncept, “motion preserving technologies like artificial disc replacement, interspinous spacers and dynamic stabilization technologies in the recent past have provided surgeons with alternatives to fusion which has altered the face of spine market altogether.”

“It is expected that further innovations in minimally invasive surgeries coupled with other advancements will foster the growth in spine market as new and improved tools with enhanced features will make complicated spine surgeries easier to perform,” according to Koncept.

Better implants, transplants and biologic therapeutics are expected to increase demand for spine surgery in the next decade. According to Ken Research, the market for spine-related allografts grew 6.5 percent between 2007 and 2012 and “is increasing rapidly, driven by the increase in the number of fusion surgeries carried in the US.” Nontraditional therapies also are improving the outlook for the sector.

“The advent of orthobiologics in the spinal industry is estimated to further add changes in the market,” Ken Research concluded. “The orthobiologics segment is likely to grow in the future due to an increase in ageing population of the US that will demand for the procedures involving a fast recovery and a quality treatment.”

Block time
By increasing patient volume at ASCs, the new CMS spine codes also help surgeons by maximizing their allocated block time in the operating room. In the past, some spine cases were unnecessarily performed on an inpatient basis because one or more of the procedures were not eligible for reimbursement at an ASC. With the new codes, many new cases can be migrated over to an outpatient setting – saving patients and taxpayers alike – while allowing surgeons to manage their available block time efficiently.
Block times are also an important tool for ASCs. They allow managers to oversee the facility’s business operations and require regular re-evaluation to ensure fairness among surgeons and success of the business overall.

Caveats remain
Although the new CMS rules provide a variety of benefits for surgeons and ASCs, spine procedures remain inherently risky both clinically and financially. As with all cases, patients must be screened rigorously to determine whether they are a good match for outpatient surgery.

Likewise, financial analysis must be performed for many of these new spine cases to ensure ongoing profitability. For example, some spinal fusion reimbursements still remain ungrouped by CMS. Depending on the specific implantation costs, reimbursements for some of these cases might be little more than half of the overall cost of the procedure.

This article was reprinted from the Regent Surgical Health newsletter with permission from Regent Surgical Health. For more information on the new CMS ruling or any other reimbursement issue, please contact Andrea Woodell atawoodell@regentsurgicalhealth.com.

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