Spinal surgery finances remain behind a very heavy curtain

The indictment of California State Sen. Ron Calderon (D-Montebello) on federal corruption charges last week was and is front-page news in my home base of Los Angeles, and it turns out the story has a lot to do with a key healthcare finance problem.

The details of the Calderon story were hazy until last week, when the U.S  Attorney's Office announced the indictments against him and his brother, a former lawmaker.

A former hospital owner, who admitted to bribing Ron Calderon to craft and pass legislation to the financial benefit of the spinal fusion surgery mill he ran out of the Long Beach facility, brought the brothers' alleged misdeeds to light. The five-figure kickbacks used to generate patient referrals were allegedly paid for by the inflation of so-called pass-through costs, which include the screws, pins and other devices used for the surgical repairs.

Altogether, as much as $500 million in fraudulent spinal surgery charges for workers' compensation patients may have passed through the postage stamp-sized Pacific Hospital over the course of just a few years.

Spinal surgery is healthcare journalism's great white whale. Many believe the procedure is overutilized and overpriced, earning some physicians millions of dollars a year. But the number of spinal surgeries performed and how they're paid for is underreported due to ongoing resistance by the medical community and bureaucratic slowness.

Only recently has the curtain begun to slowly lift on the financial opacity behind spinal surgeries. The Wall Street Journal, in one of the most significant acts of healthcare journalism in recent years, sued successfully to overturn a 40-year civil ban on publishing the names of physicians in association with the volume of procedures that they perform.

But whether the U.S. Department of Health and Human Services actually grants any Freedom of Information Act (FOIA) requests on this topic remains to be seen. Last month, it issued a modified policy stating that it would grant FOIA requests related to what Medicare pays individual physicians on a case-by-case basis only, saying it has to weigh the individual privacy rights of each physician.

I know for certain that one FOIA request under consideration is mine. I requested data on specific spinal procedures performed in California last year, not long after the Wall Street Journal prevailed to overturn the physician/volume data ban.

Palmetto GBA, California's Medicare administrative contractor, informed me within a few weeks that it had the data I requested. However, that data remains on the desk of a Centers for Medicare & Medicaid Services functionary in San Francisco awaiting "certification" for the past seven months.

CMS has a FOIA website that provides updates on all pending requests, and mine remains unchanged from "undetermined." When I call the contact number for the person handling my request, her voicemail message says to call the hotline instead--which routes me right back to the website. The hotline's recorded message also mentions a specific number to make FOIA requests regarding pass-through charges, which I find quite interesting in light of recent news developments.

I left a message this week with my CMS contact that the agency's response so far is unsatisfactory and I desire a clearer answer. 

However, I don't expect to get a clear answer anytime soon. But as the unfolding Calderon scandal makes very clear, it is time for journalists and the public to get answers regarding the growth, cost and necessity of the spinal surgeries now being performed in this country on a nearly pro forma basis. - Ron (@FierceHealth)

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