Diagnosis-Related Group–Based Payments for Adult Spine Deformity Surgery Significantly Vary across Centers: Results from a Multicenter Prospective Cohort Study

Abstract

To investigate the variation in total episode-of-care (EOC) payment and quality-adjusted life-year (QALY) gain for complex adult spine deformity surgeries in the United States, adjusting for case type and surgeon preferences. Patients aged >18 years with adult spine deformity with Medicare Severity-Diagnosis-Related Groups (DRGs) 453-460 and a minimum of 2 years of follow-up from index surgery were included. Index and total payments were calculated using Medicare's Inpatient Prospective Payment System. All costs were adjusted for inflation to 2020 U.S. dollar values. QALYs gained were calculated using baseline, 1-year, and 2-year Short-Form 6D scores. Mixed-effect models were used to estimate the proportion of variation in total EOC payment and QALY gain. A total of 330/543 patients from 6 sites were included. Mean age was 62.4 ± 11.9 years, 79% were women, and 92% were white. The mean index and total EOC payment were $77,302 and $93,182, respectively. Patients gained on average 0.15 QALY (P < 0.0001) 2 years after surgery. In unadjusted analysis, 39% of the variation in total EOC payment across the 6 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 6 centers. 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.