A Spinal Implant Loophole Costs the State of California Millions in Workers Compensation

A recent study found a spinal implant loophole in workers compensation that cost the state of California $67.5 million in 2010. At the heart of the issue is the fact that hospitals are allowed by law to double bill workers compensation insurance for the hardware used in spinal implant surgeries.

In 2004, a state law combined with the adoption of Medicare fee schedules created a loophole that led to the double billing, also known as a pass-through. A hospital is able to bill up to 120 percent for medical costs, and can bill separately for the hardware and related materials used in spinal implants. As a result, the hospital creates charges for the surgery and hardware under one bill, and then creates a second bill for the hardware and materials alone, even though, the cost of the hardware and materials was taken into consideration when the reimbursement level was established.

The study found that the duplicate payments on all procedures performed in 2010 averaged $20,137, and identified a total of 4,718 back surgeries performed under workers compensation. Researchers estimated that 3,350 of the back surgeries required hardware which triggered the duplicate payments for a total of $67.5 million paid out.

For more information on workers compensation and the spinal implant loophole, contact Chivaroli & Associates Insurance Services to talk to a team member today.