Payer Backlash May Slow Unnecessary Spinal Fusion Surgeries

A surge in spinal fusion procedures has brought mounting scrutiny on providers. Now payers appear poised to crack down on needless procedures by applying coverage pressure on physicians.

Annual US spine fusion surgeries have skyrocketed over the last decade, rising from about 260,000 in 2002 to about 460,000 in 2011, according to federal data. And recent media reports have raised alarms over the proliferation and overuse of spine fusion procedures.

Now CMS officials are cracking down and leading a backlash against unnecessary spine fusion procedures, according to Joseph Gregory, a surgical devices analyst at London-based GlobalData.

"The financial incentives really need to be in there to stop unnecessary procedures," says Gregory, who is the lead author on a spine fusion report GlobalData is set to release soon.

CMS has gotten involved because of "money going to procedures that shouldn't have been done in the first place," he says.

Spine Studies Fuel Millions in Revenue, and Controversy

To receive Medicare payment for spine fusion procedures, physicians are facing several requirements, such as providing imaging results to regulators and documenting three to six months of consecutive therapy before surgery is performed, Gregory said. "If they don't have the documentation, they basically won't be paid by the payer."

GlobalData, in a statement issued recently, forecasts that the coverage pressure from Medicare and other payers will cut into spine surgery growth over the next six years and that "these measures will tamper with the spinal fusion procedural growth rate and subsequently impact the overall market valuation over the coming years."

"While these procedures have experienced Compound Annual Growth Rates of close to 10 percent in the past, this rate is expected to be reduced to 5 percent throughout the forecast period until 2020."

NASS Recommendations
For its part, the North American Spine Society is advising members on best practices. Earlier this month, the group released insurance policy recommendations for 13 spine treatments, surgical procedures, and diagnostics, including lumbar fusion.

The NASS recommendations say lumbar fusion is an indicated treatment for nine conditions such as traumatic injuries. And three conditions—stenosis, disc-related lower back pain and disc herniation—can be treated with lumbar fusion, although some of those cases have contraindicating factors.

Targeting payers and their coverage rules will have a positive impact in helping to ensure spine surgeries are conducted when warranted, says Christopher Bono MD, a Boston-based orthopedic surgeon and second vice president of NASS.

"The NASS coverage recommendations do not directly address any relationships between industry and a surgeon. They do, however, address the indications for surgery," he said.

"If the NASS recommendations are followed, the rates of so-called unnecessary or contraindicated [procedures] should be dramatically lessened. The key determinant is what the spine community, via NASS, have deemed 'unnecessary.' This will likely be a subject of ongoing debate."

Debate about spinal fusion procedures has been simmering for years at the federal Centers for Medicare & Medicaid Services.

According to the Federal Register, the Medicare Coverage Advisory Committee, which makes recommendations to CMS on clinical issues, launched the effort to answer hard questions about spine fusion procedures in the summer of 2006.

At one meeting, the panel sought to review evidence including:

• What are the most informative measures of clinical outcomes;
• Indications;
• Clinical outcomes for the different surgical techniques and components;
• Complications;
• Harms and adverse events;
• Persistence of benefits and harms over time; and, general applicability to the Medicare population in routine practice

A notice on the CMS website shows the federal agency is well aware of the financial impact spine surgery is having on Medicare's bottom line.

Surgeries Will Continue
But Gregory identifies several factors he says will ensure continued growth in spine fusion procedures:

• The relatively high number of conditions that have become indicated for spine fusion,
• Advances in noninvasive spine surgery, and
• Demographics

"Now it's expanded to about 14 conditions," he says. "There were very few when this first started."

Advances in surgical techniques and technology have made spine surgery more attractive than ever to back pain patients, Gregory said, adding the innovations include new medical devices and faster recovery times. "It's a good driver for patients that didn't consider it in the past," he says.

And demographics are a dominant factor, Gregory said: "The aging population is really having an effect. As the population ages, you're going to see a lot more cases of this."