1061 Does Medicare Advantage Reimbursement Underpay for Spine Fusions Compared to Commercial Insurance?

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INTRODUCTION: Inpatient, elective thoracolumbar spine fusions are among the most expensive major surgical classes in US Healthcare. Private insurers now provide half of Medicare reimbursement through privately run, publicly funded Medicare Advantage (MA) insurance plans. It is largely unknown how MA reimbursement compares to the commercial reimbursement that hospitals rely upon to stay in business. METHODS: A cross-sectional study was undertaken comparing price transparency data for spine hospitals across the US using Turquoise Health’s website and cross-referenced with the latest available Medicare Hospital Cost Report and the Healthcare Cost Institute’s Healthy Market Index (HMI) for Hospital Competition. Each hospital’s website was studied and excluded if noncompliant with the Price Transparency Law’s mandate to provide patient-facing price transparency data. Hospitals with both MA and commercial reimbursement rates were included. Median negotiated MA and commercial reimbursements for each hospital were compared. RESULTS: Out of 779 thoracolumbar fusion (DRG 460) capable hospitals, 330 (42%) had patient-facing price estimates on their websites and provided reimbursement data for both MA and commercial reimbursement. MA reimbursement was significantly lower (Median $28,136, Q1:$25,861, Q3:$32,449) vs. commercial reimbursement (Median $45,960, Q1:$33,264, Q3:$62,378, p<0.001). This rate difference did not differ based on hospital market competition. On average, the MA reimbursement was 39% lower than commercial reimbursement at the same hospitals. CONCLUSIONS: For inpatient elective thoracolumbar spine fusions, Medicare Advantage significantly underpays compared to commercial insurance. This is a significant finding given the rapid growth in Medicare Advantage over the last several years. Further studies are needed to discern the underlying. Given future bundled payments and risk of complication with deformity and scoliosis surgery, further studies are needed to discern the underlying impact of Medicare reimbursement on hospital finances with resepect to adult spinal deformity surgery.

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