DRG-based bundled reimbursement for lumbar fusion: implications for patient selection

Under the Bundled Payments for Care Improvement (BPCI) initiative, Medicare reimburses for lumbar fusion without adjusting for underlying pathology. However, lumbar fusion is a widely used technique that can treat both degenerative and traumatic pathologies. In other surgical cohorts, significant heterogeneity exists in resource use when comparing procedures for traumatic versus degenerative pathologies. If the same were true for lumbar fusion, BPCI would create a financial disincentive to treat specific patient populations. The goal of this study was to compare hospital resource use for lumbar fusion between 2 patient populations: patients with spondylolisthesis and patients with lumbar vertebral fracture.

The authors compared the hospital resource use of two lumbar fusion cohorts that BPCI groups into the same payment bundle for lumbar fusion: patients with spondylolisthesis and patients with lumbar vertebral fracture. National Inpatient Sample data from 2013 were queried for patients who underwent lumbar fusion for lumbar vertebral fracture or spondylolisthesis. Hospital resource use was measured using length of stay (LOS), direct hospital costs, and odds of discharge to a post-acute care facility and compared using multivariable linear and logistic regression. All models adjusted for patient demographics, 29 comorbidities, and hospital characteristics.

After adjusting for patient demographics, insurance status, hospital characteristics, and 29 comorbidities, spondylolisthesis patients had a mean LOS that was 36% shorter (95% CI 26%-44%, p < 0.0001), a mean cost that was 13% less (95% CI 3.7%-21%, p < 0.0001), and 3.2 times greater odds of being discharged home (95% CI 2.5-5.4, p < 0.0001) than lumbar vertebral fracture patients.

Under the proposed DRG (diagnosis-related group)-based BPCI, hospitals would be reimbursed the same amount for lumbar fusion regardless of the diagnosis. However, compared with fusion for spondylolisthesis, fusion for lumbar vertebral fracture was associated with longer LOS, greater direct hospital costs, and increased likelihood of being discharged to a post-acute care facility. These findings suggest that the BPCI episode of care for lumbar fusion dis-incentivizes treatment of trauma patients.