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Should You Add Spine Surgery?
Reimbursement, case volume and capital expenses are key to outpatient neurosurgery.
David Bernard
Publish Date: October 10, 2007   |  Tags:   Neurosurgery-Spine

The minimally invasive revolution has brought selected spinal procedures to outpatient surgery's ORs, with anterior cervical disc fusion, lumbar laminectomy, percutaneous discectomy, percutaneous vertebroplasty and disc decompression among them. Here's advice from administrators who've made outpatient spine a success.

Who's paying for this?
"The most important step in adding spine is to take a look at your managed care," says Steve Faro, chief operating officer of NeoSpine, a Nashville, Tenn.-based corporate partner that's developed and managed eight outpatient spine surgery centers. "Determining your reimbursement as far in advance as possible is critical."

It's an issue that will have a major impact on your patient and case mix, he says, since spine procedures performed in surgery centers aren't reimbursable under Medicare and don't necessarily fall under APC codes, either.

"For all the contracts you have in place, or want to get in place, or that are up for renewal and renegotiation, work with your insurers to find out what you can be reimbursed for," says David Moody, RN, administrator of the Knightsbridge Surgery Center in Columbus, Ohio. As a starting point, he says, "Tell them what procedures you're going to be doing. Tell them, 'This is how much they're costing us, and this is how much we'd like to be reimbursed.'"

Those who add a specialty under existing contracts, says Mr. Faro, run the risk of getting paid a default rate and losing money with every procedure performed. When negotiating reimbursement rates with your insurers, he says, one important goal is arranging specific carveouts for spine implants. Rates of 100 percent or 110 percent, if attainable, are ideal, he says.

Mr. Moody also stresses the importance of familiarity with your local state's regulations. "In Ohio, we can't do worker's comp spine procedures. We'd lose money," he says. "Those, the surgeons do at hospitals." Let your doctors know if worker's comp cases or those involving other third-party payers are less-than-fiscally-practical to perform at your center.

At Diagnostic & Interventional Spine Care, a physician-owned medical facility and surgery center in Marina Del Rey, Calif., participating practices rely on PPOs instead of contracts with third-party payers for reimbursement. "Out-of-network benefits for spine are fairly high," says Karen Reiter, RN, CNOR, RNFA, the center's COO. By selecting patients with plans that reimburse for procedures and implants, and by knowing the amount those plans will reimburse, physicians can reap higher returns from a lower, selective volume of cases, she says.

Regardless of reimbursement strategy, be aware that coding for spine procedures can be a complex undertaking, with multiple codes applicable to a single case depending on the procedure, implants and even imaging equipment used. Experts recommend enlisting the abilities of a certified coder or outsourcing your coding and billing to a firm with spine experience. Your spine surgeons may be able to provide recommendations from their experiences at other facilities. (See "Getting Reimbursed for Spinal Procedures," September, page 33.)

Surgeons on board
If you're considering adding spine surgery, it's more than likely that you already have neuro- or orthopedic surgeons associated with your facility who are championing the cause and who've provided you with a business plan for the specialty. If that's not the case - if you're a multi-specialty center recruiting spine professionals to meet a perceived demand for the specialty - keep in mind that you'll need two or three spine surgeons on board to make the addition financially worthwhile, especially if it involves significant capital investments. (Single-specialty spine centers will need at least five surgeons to stay above water, says Mr. Faro.) And be aware that the results might not be immediate.

Mr. Faro warns of an initial period of adjustment. "It's going to be an 'as-needed' basis," he says. "You're not going to have a spine surgeon consistently bringing in five cases every single week. It'll be more like three a month."

If you've kept your equipment budget for the new services under control, that might be more manageable. "We didn't buy a spine scope, and still don't have one," says Mr. Moody, whose two neurosurgeons use surgical loupes for their procedures. "One day a month of spine is very profitable for me."

Spine surgery is not a specialty that lends itself to thrifty fixes, but outpatient surgery's time and money budgets do impose certain demands that surgeons need to be aware of. "You have to make sure your surgeons are comfortable doing these procedures outpatient," says Mr. Faro. "These guys live in an inpatient world."

Adds Mr. Moody, "I was fortunate. I had neurosurgeons who understood the realities of outpatient surgery. They know the facility doesn't have everything the hospital has, in terms of patient selection and instruments, and limits the things you can do to keep costs and supplies down."

You'll also want to staff your physicians with a team of OR personnel with ortho or neuro spine experience, perhaps even bringing assistants from the physician's practice on board for the procedures.

Recovery and PACU nurses also need to know what they're dealing with, says Mr. Moody. With any luck, your surgery center's staff possesses a wealth of collected experience from other facilities. "Most of our nurses are mature," he says, "and we have a lot of past experience. One nurse had most of the neuro experience, so we gave the OR to her, as our champion. We have a champion nurse for every specialty."

Equipping your OR
"Spine surgeons don't need a lot of equipment," says Ms. Reiter, "but it's expensive equipment."

The cost of equipping your OR could total $300,000 to $350,000; specialized procedures have specialized needs, says Mr. Faro.

"Before you do your first case, you're going to want those things in there," he says. On the bottom line, however, the cash spent or the principal amount on the lease signed should be balanced by the actual, consistent volume of cases you can expect, he notes.

Perhaps the most necessary piece of equipment is an OR table suitable for spine procedures. Spine tables require the customized flexibility to position patients for access to vertebral anatomy while also allowing access to C-arms or other surgical imaging devices.

"Spine tables are where people can fall into a rut," says Mr. Faro. "They order a table, then find out they have to buy a different type, or retrofit it with expensive accessories to make it work." With tables listing at $30,000 to $40,000 and attachments adding another $15,000 to $20,000, this isn't a decision you'll want to approach without hands-on trialing time for your surgeons.

Spine scopes differ from other specialties' scopes in that they have a xenon light source instead of a halogen one for stronger illumination; a longer focal distance to accommodate standing surgeons and instrument access; and dual stereo optics to allow both the surgeon and his assistant a three-dimensional view of surgery. A new spine scope can cost between $100,000 and $200,000, though refurbished models can be had at a discount. As it's the largest capital purchase necessary to equip your facility for spine, "that's where you'll have to make concessions with your surgeons," says Mr. Moody, by arranging trials and perhaps talking them out of some high-priced bells and whistles.

Specialized instrument trays and power tools may add another $100,000 or more to the bill. This expense is driven largely by physician preference, so aim for standardization and work with vendors to discover your purchasing possibilities. At Mr. Moody's facility, vendors supplied a demo tray of retractors for surgeons to use. As cases were performed with the demo instruments - and the facility was reimbursed for the surgeries - administrators and materials managers determined which tools the surgeons never used and which ones they did. "Then we could just buy those," he says.

Patient selection, scheduling
In any type of surgical procedure, some patients are ideally suited for outpatient surgery and others are better suited for hospital stays. Outpatient spine procedures find their highest rates of success among patients who can rebound quickly.

"Selecting healthy patients typically allows for more successful outcomes and timely post-op discharge," says Mr. Moody. "The doctor is the gatekeeper on that," he says, since proper patient selection is based on a patient's history, physical and needs. "You should bring anesthesia in on it, too. These patients are lying on their bellies. That's more difficult anesthesia."

Mr. Faro also notes the importance of agile scheduling, for all players, to spine procedures. "Anesthesia should prepare for a potentially longer recovery period," he says. "Not just one hour, but maybe four. As a result, you'll have to start spine cases very early in the morning."

The need for early-morning OR time combined with the inconsistent arrival of spine cases at your facility may spell conflict, so you'll need to practice diplomacy among your spine surgeons and those with long-standing block time.

"You'll have to be able to move your schedule around," says Mr. Faro. "You need to be able to make room."

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