Hospitals in the Golden State received $67.5 million in duplicate payments for spinal surgeries performed during 2010, reported California Watch.
The extra money came in the form of "pass-through" payments that come to providers when they operate on patients covered by workers' compensation insurance, according to the article. It applies only to workers' compensation beneficiaries, although several other states have similar pass-through methods of payment.
In California, one out of six spinal surgeries that included spinal hardware was performed under a workers' compensation claim, according to a report from the California Workers' Compensation Institute. In a survey of more than 3,300 of the procedures, it concluded that the pass-through payments add $20,000 to the cost of every spinal procedure.
"The loophole has unfortunately led to a cottage industry where you have some hospitals that do a huge proportion of workers' compensation spinal injury surgeries, and they take advantage of the double payment," Ted Lieu, a state senator, told California Watch.
Potential payment abuses involving physician-owned spinal fusion companies and collection of hardware-related royalties throughout the United States have been extensively reported by the Wall Street Journal.
- read the California Watch article
- here's the California Workers' Compensation Institute report
- read the WSJ article on spinal fusion hardware royalties and the article on physician-owned spinal fusion surgical companies (subscription required)