July 3, 2013

Ford: How to understand the $34 million kyphoplasty settlement

Daily Briefing

The Daily Briefing's Hanna Jaquith spoke with Technology Insights' Ashley Ford to discuss Tuesday's announcement that 55 hospitals will pay $34 million to settle allegations that they overbilled Medicare for kyphoplasty procedures.

Q: First, can you give us  a primer: What is kyphoplasty?

Ford: Kyphoplasty is a surgical treatment for vertebral compression fractures (VCF) that would otherwise be treated non-operatively.

In kyphoplasty, a physician inserts a specialized balloon tamp into the fracture site and inflates the balloon, creating a cavity for the subsequent insertion of cement that stabilizes the fracture site and restores vertebral height.

Q: The quality and efficacy of kyphoplasty and vertebroplasty, a comparable surgical procedure for back pain, have been debated before. What's the current consensus on the procedures?

Ford: First, here's a quick explanation of vertebroplasty—[you're right], it's a very similar, albeit surgically simpler and less costly, alternative to kyphoplasty. In the vertebroplasty procedure, a physician inserts a specialized needle into the vertebrae and directly inserts bone cement into the fracture, stabilizing the site and reducing chronic pain.

Until recently, there hasn’t been a great source of data to compare these procedures, [except for] clinical trials that often have some level of limitations. Some studies have found that kyphoplasty has slightly better pain relief outcomes than vertebroplasty in the long term, but significantly better quality of life outcomes.

However, the overall lack of data highlights the need for a spine registry to have data behind surgery decisions, as well as more clinical standardization. The North American Spine Society has launched a pilot registry that will likely help tremendously with a push towards higher quality and standardization. 

Q:  Monday's DOJ announcement is attention-getting, but what's the story behind the story? 

Ford: This is important for your readers to know: back pain surgery is notorious for overuse and the need for repeat procedures to treat chronic conditions. And because surgery is not only hard on patients, but can drive up costs, that's why many insurers have been scrutinizing the medical necessity of back pain surgery. 

And thanks to technology advancements, and since spine surgery typically targets a younger, pre-Medicare patients, many of these cases can safely be performed in the outpatient arena. 

But the less-than-desirable reimbursement rates in the outpatient arena meant that some programs were reluctant to move this procedure outpatient. That's what caught the attention of the DOJ.

And moreover, years ago, several device representatives from the original vendor were recommending that physicians perform this on the inpatient side for these financial reasons.

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Q: We've seen a lot of news lately regarding Medicare's increased scrutiny of how hospitals classify patients as inpatient or outpatient. How does this issue relate to the kyphoplasty debate?

Ford: So because many kyphoplasty procedures have moved to the outpatient setting and can safely be performed in this site, the remaining controversy has been generally driven by finances. Kyphoplasty is often more profitable when performed in an inpatient setting rather than outpatient, where it appears potentially difficult to break even.

For example, on the inpatient side, kyphoplasty is reimbursed at rates ranging from about $9,000 to nearly $19,000. That's depending on complications and comorbidities.

And though outpatient kyphoplasty garners significantly higher Medicare reimbursement than outpatient vertebroplasty—about $5,800 vs $2,300 for vertebroplasty—hospitals have trouble breaking even when performing kyphoplasty in the outpatient setting because of its high upfront procedure costs.

Q: Some top officials are alleging that the hospitals knowingly misrepresented patients as inpatient to bill Medicare at higher rates. However, hospitals say it's a clarity (or lack thereof) issue. Thoughts?

Ford: Unfortunately, spine surgery—particularly for VCF procedures—is subject to clinical variability. There aren't any standardized guidelines explicitly stating where and how this procedure should be performed. Individual surgeons instead will make the call—and many are split on the issue. 

And as I mentioned before, many clinical trials present conflicting data supporting the use of surgery versus conservative measures and vice versa. 

Q: What should hospitals take away from this?

Ford: If anything, it highlights why hospitals need to continue to monitor their spine programs—particularly in terms of patient selection to ensure the medical necessity of cases and prevent any financial penalties. And since most back pain patients don't need surgery, this emphasizes the need to have better care continuum coverage and incorporate pain management. 

How to define quality is a constantly changing proposition, but we can expect to see a continued emphasis on the patient’s quality of life and the cost-effectiveness of spine treatment in years to come. 

And given the increasing scrutiny of spine surgery and the continued demand for low back pain treatment, the most progressive spine centers are moving to fully integrate pain management, physical medicine, and rehab into their spine centers. That kind of interdisciplinary model is intended to treat patients non-surgically—focusing on their needs from a physical and behavioral health perspective, before any sort of surgery is considered.

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