How Do Case Type, Length of Stay, and Comorbidities Affect Medicare DRG Reimbursement for Minimally Invasive Surgery (MIS) for Deformity?

Presented at SMISS Annual Forum 2016
By Pierce Nunley MD
With Juan Uribe MD, FACS, Neel Anand MD, Robert Eastlack MD, Richard Fessler MD, PhD, Michael Wang MD, Adam Kanter MD, Paul Park MD, Christopher Shaffrey MD, Dean Chou MD, Gregory Mundis MD, Joseph Zavatsky MD,

Disclosures: Pierce Nunley MD None Juan Uribe MD, FACS A; Nuvasive. B; Nuvasive. C; Nuvasive. D; Nuvasive. F; Nuvasive, Neel Anand MD None, Robert Eastlack MD None, Richard Fessler MD, PhD None, Michael Wang MD None, Adam Kanter MD None, Paul Park MD B; Biomet, Globus, Medtronic, Nuvasive. F; Globus, Christopher Shaffrey MD None, Dean Chou MD None, Gregory Mundis MD A; ISSGF, Nuvasive. B; K2M, Medicrea, Misonix, Nuvasive. C; K2M, Nuvasive. F; Nuvasive., Joseph Zavatsky MD B; Amendia, Biomet, Depuy, Stryker. D; Innovative Surgical Solutions, Safe Wire, Vivex. F; Biomet.,


We investigated Medicare DRG based reimbursement for MIS deformity procedures in our study group hospitals based on length of stay and presence of comorbid conditions (CC).


DRG coding affects proper reimbursement for MIS deformity cases. 


DRG based reimbursement was obtained for MIS anterior, posterior and circumferential 1-level and multi-level fusion for listhesis and deformity cases with and without CC from 12 institutions throughout the US. The 3 most common MIS procedures were analyzed to compare reimbursement based on DRG coding: 1. Fusion via anterior or posterior only; 2. Fusion anterior with fixation posterior percutaneous (no dorsal fusion); 3. Fusion Combined anterior and posterior.


The number of levels fused does not affect the reimbursement for all cases. Cases 1 and 2 without CC, 3-day stay reimbursed $41,404 vs 8-day reimbursed $42,808. Cases 1 and 2 with CCs, 3-day stay reimbursed $54,476 vs 8-day stay reimbursed $55,881. Case 3 without CC, 3-day stay reimbursed $47,992 vs 8-day stay reimbursed $49,397. Case 3 with CC, 3-day reimbursed $61,806 vs 8-day reimbursed $63,212. The increased payment for an 8-day stay was $1,405 or $281 per day. If a deformity case 1 or 2 is coded incorrectly as a degenerative case the decrease in payment was $9,769 lower (-24%) with no CC and $22,841 lower (-42%) with CC. 


Regardless the direct costs, Medicare DRG based reimbursement was the same for single and multi-level MIS deformity cases. The use of posterior percutaneous fixation without dorsal fusion resulted in a 13-16% lower reimbursement compared with the addition of a posterior arthrodesis. Coding a deformity case as degenerative by the hospital resulted in 24-42% lower DRG based reimbursement. In today’s challenging environment it is important that physicians and hospitals better understand procedure and coding issues in order to be able to continue to offer complex spinal surgeries cost effectively to our patients.