8 Payor Trends for Spine Surgery to Watch

1. Spinal fusion claims are highly scrutinized. Spine surgeons across the country are experiencing increased scrutiny from private payors, possibly due to the increasing number of unnecessary spinal fusions in some regions. "I've noticed a difference in the payor's willingness to reimburse for some spinal procedures," says Michael Finn, MD, a neurosurgeon in the department of neurosurgery at the University of Colorado. "I think that makes sense because there are a lot of patients who come in with failed back surgery syndrome who have had multiple-level fusions that shouldn't have been performed in the first place."

Some insurance companies have spine surgeons or other medical physicians review cases before approving them for surgery, which is something Sumeer Sathi, MD, a neurosurgeon with Long Island Neurosciences in East Patchogue, N.Y., has experienced. "We've been able to proceed with the surgery because our indications are strong," he says. "Sometimes, we have to speak with these physicians personally before they will give us authorizations. We are also finding these physicians aren't experienced spine surgeons or orthopedic surgeons, but any physician. They are following protocol and policy to see if it fits the criteria for having surgery. I don't have a problem with scrutiny from the appropriate people, but it would be helpful if it were someone who is an experienced spine surgeon who understood the conditions and can render a helpful decision."

Future reimbursement for spinal procedures will most likely require high levels of evidence proving a procedure is effective for the patient. "We're going to have to come up with a little better evidence and rationale if we want to keep getting paid for what we do," says Dr. Finn. "It's disheartening for surgeons who have been performing the surgeries for only the appropriately indicated patients."

2. CPT has bundled several codes that were separately billable. These new CPT regulations are now bundling codes with high level of service reimbursement under one code such as the interbody and lateral fusion codes as well as the removal of old instrumentation and insertion of new instrumentation in revision surgeries. CPT has bundled the reimbursement for these procedures and the bundling is not realized until the practice receives the payments.

"Many of these changes were unannounced, such as the bundled instrumentation with revision surgeries, which has really hit surgeons hard considering it takes time for the removal of instrumentation in the revision procedure; the surgeon won't be paid separate if it is performed with  the insertion of the new construct," says Barbara Cataletto, MBA, CPC, CEO of Business Dynamics. "That is frustrating and unfair for surgeons doing this type of work, and most practices weren't aware of this important change until they received a denial."

Surgeons are also seeing insurance companies bundle codes that were previously billed separately, such as the use of bone marrow aspirates with other procedures. Insurance companies have begun denying entire claims where bone marrow aspirates were billed separately; this action has been devastating for spine practices, many of whom were unaware of the change.

"I would like to see the industry have more disclosure," says Ms. Cataletto. "I don't see the current trend improving until there is true transparency and the industry at large has a chance to counter specific changes to CPT or reimbursement prior to its enactment. There are no increases in RVUs for these new coverage updates, so surgeons are doing more work and taking on more risk for less reimbursement."

3. Preauthorization is a more rigorous process than in the past. The preauthorization process has become much more rigorous over the past few years, taking surgeons away from their patients to debate clinical guidelines and treatment decisions. This has become especially prominent in spinal fusion cases, where sometimes even providing the essential information about failed conservative treatment leads to a peer-to-peer review.

"In the past, surgeons could have their office staff discuss coverage issues with the insurance companies; now they are asking questions only the surgeons are able to answer and extending the reviews beyond staff," says Ms. Cataletto. "The surgeon has little choice but to comply and by doing so, it encumbers their ability to work with patients."

The additional time on the phone with insurance company costs surgeons both in their patient relationships — less time spent with patients in order to take these phone calls — as well as financially, since they aren't reimbursed for time spent on the phone.

"You have to go through three or four levels of appeals and sometimes even then only part of the case is approved or a full denial is rendered," says Ms. Cataletto. "If the coverage isn't approved, patients may be forced to pay for the surgery themselves or figure out the next available treatment option. The patients and physicians are left in a dilemma of a situation as to the next steps should the carrier disagree with the treatment. Even if the patient has coverage, it doesn't mean the carrier will cover the surgical care and this has a significant impact on everyone."

When advocating for additional coverage, surgeons must frame their position so it focuses on providing the care patients deserve and not merely on reimbursement levels.

"We have to change our focus from the reimbursement position to a patient care and coverage position for society at large to take us seriously about our motivations," says Ms. Cataletto. "If we put patients first, everything else will follow. If patients are involved with advocating for their coverage, there is a team approach to tackling these issues. Both patient and surgeon involvement in responding to denials is critical. At the end of the day, it's all about the patient."

Providers can go to the state insurance board to discuss the impact these changes are having on their practice. "Extend complaints to the state insurance boards," says Ms. Cataletto. "That's another key avenue that they can explore in order to have their voices heard as to how these decisions are impacting patient care."

4. Denials based on medical necessity. Payors are increasingly denying spinal procedures based on "medical necessity," or lack thereof. Insurance companies claim surgery isn't medically necessary for a variety of reasons, including in situations where approval was readily granted in the past.

"There have been class action settlements in recent years — approved at various times between 2003 and 2006 — that have penalized insurers for unethical and unfair business practices," says Sean Weiss, vice president and chief compliance officer for DoctorsManagement. "The Second Circuit Court of Appeals decided numerous cases where medical necessity is mentioned. However, only one case actually described what the term means in absence of a definition in an insurance plan's documentation, saying 'unless the contrary is specified, the term medical necessity must refer to what is medically necessary for a particular patient, and hence entails an individual assessment rather than general determination of what works in the ordinary case."

Insurance companies such as Aetna, Cigna and Humana have entered into settlement agreements with more than 900,000 physicians and state and county medical societies in a class action lawsuit. However, settlements have expiration dates and vary by payor, so at some point the payors will not be bound by the definition of medical necessity within the settlements.

5. Payors are demanding more documentation. Spine surgeons across the country are hearing they need more documentation from each case before payors will approve surgery. Sometimes surgeons can predict the type of documentation they will need, such as proof the patient took the appropriate pathway of physical therapy and epidural injections before deciding upon surgery; other times, the missing documentation isn't quite as clear.

"Sometimes when you are asking for approval on the big ticket items, payors aren't very straight forward about what you need in your documentation," says Christopher Kauffman, MD, a spine surgeon in Nashville, Tenn. "You can tell them how long the patient has been having problems and show them they've been through the treatment pathway, but the payor will still deny surgery because you don't meet all the requirements, but they won't tell you what the requirements are. I can't do a good service for my patients if I can't answer these questions."

Gathering all the documentation necessary can be challenging for spine surgeons, especially when patients have their non-operative care elsewhere.

"Often, the primary care physician has overseen the non-operative care and we may not have put all the medications, physical therapy and ESIs performed  in our notes," says Dr. Kauffman. "The insurer sees that this is the patient's first visit to the surgeon, so they assume the patient hasn't done anything else and isn't a candidate for surgery. Payors think they are approving too much too often; they are of the opinion that surgeons have had it too easy for too long and surgeries were approved just because surgeons said they needed it done. That's why there are stricter guidelines and more denials today."

6. RAC audits could retrospectively deny coverage. RAC audits are becoming more common and could make an impact on spine surgeons' practices in the future. Even if surgeons are able to gain approval for surgery, perform the surgery and receive reimbursement, if a RAC auditor retrospectively finds you didn't have the right documentation for surgery they'll request a refund.

"The Medicare RAC auditors will give you the appropriate or updated guidelines, but that is for the future," says Dr. Kauffman. "They will want their money back for the past cases. Surgeons are not going to know what to do in this situation. They have to have the right documentation both in their office notes and in the hospital record; EMR can give people an advantage in this realm because if your practice takes the time to have different templates for herniated discs, spinal stenosis, ect., you can add to that template continuously and make sure the person has taken the right pathway for fusion. That gets the surgery approved and helps you on the back end."

EMR can help surgeons document for Medicare and private payor cases. If you don't have EMR, staff members can help you make sure patients have been through every step of the treatment pathway before requesting surgery.

"Staff has to help you make sure to schedule the patient for surgery and look at the checklist for the treatment pathway to point out if something hasn't been done yet," says Dr. Kauffman. "They can highlight what you need to do to help the patient get approval when surgery is the next step in their care."

7. Insurance companies are looking at pay-for-performance measures. The traditional fee-for-service model is changing to compensate more for quality than quantity. Spine surgeons aren't paid as well today as they were a few years ago for the same amount of work as each unit of work receives smaller payment.

"If you want to keep the same level of income, you have to work harder," says Bryan Oh, MD, a neurosurgeon who focuses on spine surgery with BASIC Spine in Orange, Calif. "The other part of pay for performance is that if there are complications, you'll be paid less than if the case went perfectly. This hasn't happened yet but it's coming in the future."

Even if the complication isn't directly attributable to the surgeon, insurance reimbursement will still take a hit. Spine surgeons will heighten oversight on all aspects of patient care to ensure full compensation.

"Surgeons may have to become an overall better 'doctor' by making sure everyone from the internist to the anesthesiologist to the rehabilitation specialist is doing the right thing," says Dr. Oh. "They'll take on a leadership role in taking care of the patient."

8. Protocol developed by insurance companies for back pain patients. In some states, insurance companies are now requiring patients to go through their protocol of conservative care before seeing a spine surgeon. Last year, Minnesota-based HealthPartners began requiring members to undergo an evaluation by a non-operative spine specialist before seeing a surgeon. The company points patients to "designated spine specialists" to perform the evaluations.

Cigna HealthCare has also partnered with Wyoming Neuroscience and Spine and Elkhorn Rehabilitation Hospital in Casper to develop a pathway for back pain patients. The program includes non-operative spine care and education on self management for chronic back pain patients.

"The focus of the program is to provide the right care at the right place at the right time with the right provider. The program is based on following evidence-based guidelines," says David E. Mino, MD, MBA, Cigna HealthCare National Medical Director, Orthopedic Surgery and Spinal Disorders. "Early physical therapy intervention provides education and management techniques while avoiding unnecessary costs including emergency room visits and advanced imaging, when those may not be able to accurately manage the condition."

Since implementing the program, Dr. Mino says many patients have reported high satisfaction with their experience. "The early success of the program is really creating interest with other Cigna clients and employers to develop a similar program for their employees," he says. "There is also interest from other provider groups that really see the benefit and value of a coordinated and collaborative spine program for their patients and our customers."

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