Medicare charges and payments for cervical spine surgery

Study Design. Retrospective analysis. Objective. To determine the association of hospital and patient population characteristics with charges and payments for Medicare patients undergoing cervical spine surgery. Summary of Background Data. Third-party payers such as Medicare pay negotiated rates for health care services that represent a substantial savings from hospitals' list prices. Previous research has shown geographical variation in hospital charges. However, the association with other hospital and patient population characteristics is poorly understood. Methods. We determined the association of hospital characteristics (hospital size, ownership, location, teaching status, procedure volume, and geographical region) and patient population characteristics (proportion female, nonwhite, or with ≥ 1 comorbid conditions) with excess charges (difference between hospital charges and payments) and cost-to-charge ratio (ratio of payments to hospital charges) for Medicare patients undergoing cervical spine fusion without complication (MS-DRG 473). Signifi cance levels were set at a P value less than 0.05. Results. The median excess charge was $59,799 (interquartile range, $41,668, $69,576) and cost-to-charge ratio was 25.8% (interquartile range, 20.4%, 32.7%). Higher excess charges were observed for urban hospitals ( P = 0.003). There was an association between excess charges and procedure volume ( P = 0.034) and proportion of patients with 1 or more comorbid conditions ( P = 0.008). There were no differences based on hospital size, ownership, teaching status, geographical region, or proportion of female or nonwhite patients. Private hospitals had higher cost-to-charge ratios than government hospitals ( P = 0.017). There was no association with hospital size, teaching status, geographical region, procedure volume, or proportion of patients who were female, nonwhite, or who had 1 or more comorbid conditions. Conclusion. The relationship between hospital charges and payments for cervical spine surgery without complication is associated with certain hospital and patient population characteristics. Further study is needed to determine whether these differences are associated with health outcomes.