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Kyphoplasty settlement the latest case of growing federal scrutiny

July 3, 2013

    Hanna Jaquith, Daily Briefing

    Maybe the biggest story in health care on Tuesday—until it was overshadowed by news that the White House would delay the ACA's employer mandate—was an announcement that 55 hospitals had settled with the Justice Department over charges related to overbilling for kyphoplasty procedures.

    I spoke with Ashley Ford, one of the Advisory Board's service line experts, to get some context on the case and better understand the oft-used spinal procedure. (Our condensed Q&A appears in today's issue.) But she made an additional point that I didn't include because the interview was running long—I've pulled it out and bolded it below.

      Ford: So because many kyphoplasty procedures have moved to the outpatient setting and can safely be performed in this site, the remaining controversy has been generally driven by finances. A hospital wishing to introduce kyphoplasty to its interventional spine service faces significant variable costs of approximately $3,600 per single level procedure, with an estimated additional $2,100 for every vertebral level after the first. [And] kyphoplasty is often more profitable when performed in an inpatient setting rather than outpatient, where it appears potentially difficult to break even.

    My conversation with Ashley reminded me of another interview that I did with the Advisory Board's Rachel Klein about a month ago, following a steep rise in complaints and lawsuits surrounding the da Vinci robot. In some of those cases, hospitals felt pressured to deploy the robot, which costs a whopping $2 million, to get return on their investment.

    While the procedures, and circumstances, are very different, this has been a common thread in several of our recent stories: patients and hospitals may want these newer procedures and technologies, but behind-the-scenes financial tension is helping open hospitals up to growing government scrutiny.

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