Study finds variations in Medicaid reimbursement for spinal surgery between states

Reviewed by Kate Anderton, B.Sc. (Editor)Sep 27 2019

Most states reimburse less for spinal surgery in Medicaid patients, compared to Medicare reimbursement for the same procedures, reports a study in Spine. The journal is published in the Lippincott portfolio by Wolters Kluwer.

Led by David S. Casper, MD, of the Rothman Institute at Thomas Jefferson University Hospital, Philadelphia, the study shows disparities between Medicare and Medicaid reimbursement for identical procedures within states, as well as wide variations in Medicaid reimbursement for spinal surgery between states. "It is likely that these discrepancies lead to suboptimal access to necessary spinal care," the researchers write.

Low Medicaid reimbursement may affect access to spinal surgery

Dr. Casper and colleagues performed an online search to identify each state's Medicaid reimbursement rates for eight of the most commonly performed spinal surgical procedures – for example, various spinal fusion and decompression procedures. The researchers analyzed discrepancies between Medicaid and Medicare reimbursement on a state-by-state basis.

On average, reimbursement for spinal surgery in Medicaid patients was 78 percent of the reimbursement for the same procedure in Medicare patients. But there was significant variation between states: for the eight procedures combined, Medicaid reimbursement ranged from 39 to 140 percent of Medicare reimbursement.

Medicaid reimbursement was less than 50 percent of Medicare reimbursement in four states: New York, New Jersey, Florida, and Rhode Island. In another four states – Alaska, Arkansas, Nebraska, and South Dakota – Medicaid reimbursement was higher than Medicare reimbursement. (Delaware, Kansas, Pennsylvania, and Tennessee did not have publicly available data on Medicaid reimbursement.)

In 20 states, Medicaid reimbursement was less than 75 percent of Medicare reimbursement. Overall, 43 states reimbursed less for spinal surgery in Medicaid patients than for Medicare patients. The variation between states was largest for microdiscetomy: a minimally invasive procedure performed in patients with a herniated spinal disc.

Medicare and Medicaid are major payers in the American healthcare system, particularly for elderly and low-income populations. Medicare is federally funded, while Medicaid is controlled at the state level with contributions from the federal government.

Low reimbursement has been identified as an important barrier to healthcare access for Medicaid patients, particularly for specialty surgical care. "Due to significantly lower rates of reimbursement, it is thought that fewer physicians are willing to take on new Medicaid patients, as they are unable to receive compensation commensurate with their services," Dr. Casper and coauthors write.

The new study confirms that most states reimburse less for common spinal surgery procedures in Medicaid patients, compared to Medicare patients. The reasons for the variation between states are unclear – the authors suggest that many different factors may be involved, including political climate, budget agendas, and individual state economics.

Using consistent, fair reimbursement as a proxy to equal care, this study...provides reasons as to why Medicaid patients often have difficulty obtaining appropriate medical care. Standardizing reimbursement rates among insurance providers to a level appropriate for the services provided would likely improve access to care for Medicaid patients."

Dr. David S. Casper and colleagues