DRG Based Payments for Adult Spine Deformity Surgery Significantly Vary across Centers: Results from a multicenter prospective cohort study.

BACKGROUND: To investigate the variation in total episode of care (EOC) payment and quality adjusted life year (QALY) gain for complex adult spine deformity (ASD) surgeries in the U.S. adjusting for case type and surgeon preferences.

METHODS: ASD patients aged > 18 years with MS-DRGs 453-460 and a minimum of two-years of follow-up from index surgery were included. Index and total payments were calculated using Medicare's inpatient prospective payment system (IPPS). All costs were adjusted for inflation to 2020 US dollar values. QALYs gained were calculated using baseline, 1-year, and 2-year Short-Form 6D (SF-6D) scores. Mixed-effect models were used to estimate the proportion of variation in total EOC payment and QALY gain.

RESULTS: A total of 330/ 543 patients from six sites were included. Mean age was 62.4+11.9 years, 79% were women, and 92% were Caucasian. The mean index and total EOC payment were $77,302 and $93,182, respectively. Patients gained on average 0.15 QALY (p<0.0001) two years following surgery. In unadjusted analysis, 39% of the variation in total EOC payment across the six centers was attributable to relative weight of DRG and base rate. Adjusting for patient and procedural factors increased the proportion of variation in total EOC payments across the centers to 56%. Less than 2% of the variation in QALY gain was observed across the six centers.

CONCLUSIONS: Medicare-based payments for complex spine deformity fusions are primarily driven by relative weight of the DRG and the hospital's base rate. Patient and procedural factors are unaccounted for in the DRG-based payments made to the providers.