Lack of Cost Savings for Lumbar Spine Fusions after Bundled Payments for Care Improvement Initiative: A Consequence of Increased Case Complexity

Study Design.Retrospective analysis of Medicare claims and procedure details from a single institution participation in the Bundled Payments for Care Improvement (BPCI) program.Objective.To analyze the effects of the BPCI program on patient outcome metrics and cost data.Summary of Background Data.The BPCI program was designed to improve the value of care provided to patients, but the financial consequences of this system remain largely unknown. We present 2 years of data from participation in the lumbar spine fusion bundle at a large, urban, academic institution.Methods.In 2013 and 2014, all Medicare patients undergoing lumbar spine fusions for DGR 459 (spinal fusion except cervical with major complication or comorbidity [MCC]) and 460 (without MCC) at our institution were enrolled in the BPCI program. We compared the BPCI cohort to a baseline cohort of patients under the same diagnosis related groups (DRGs) from 2009 to 2012 from which the target price was established.Results.Three hundred fifty patients were enrolled into the BPCI program, while the baseline group contained 518 patients. When compared with the baseline cohort, length of stay decreased (4.58 ± 2.51 vs. 5.13 ± 3.75; P = 0.009), readmission rate was unchanged, and discharges with home health aid increased. Nonetheless, we were unable to effect an episode-based cost savings ($52,655 ± 27,028 vs. $48,913 ± 24,764). In the larger DRG 460 group, total payments increased in the BPCI group ($51,105 ± 26,347 vs. $45,934 ± 19,638, P = 0.001). Operative data demonstrated a more complex patient mix in the BPCI cohort. The use of interbody fusions increased from 2% to 16% (P < 0.001), and the percentage of complex spines increased from 23% to 45% (P < 0.001).Conclusion.Increased case complexity was responsible for increasing costs relative to the negotiated baseline target price. This payment system may discourage advancement in spine surgery due to the financial penalty associated with novel techniques and technologies.Level of Evidence: 3.