A new report has raised questions about alleged inappropriate billing for elective spinal surgeries in Australia, but the Australian Medical Association says compliance issues are overwhelmingly innocent mistakes.

Concerns have been raised about the possible exploitation of Australia’s health care system, with new analysis finding inconsistencies in the private health insurance billing records of more than 23 000 patients who have undergone spinal surgery.

The analysis, obtained by ABC’s Four Corners, found 77% of patients were billed for more complex services than the service actually provided.

It also found 10% of patients were billed for longer services than the service provided, and 7% were billed for spinal fusions for chronic lower back pain without a diagnosis.

The deidentified data were supplied by six private health funds and was analysed by a UK-based health fraud investigation company.

In their findings, the analysts concluded that there was a strong suggestion of “a serious fraud, waste and abuse problem requiring urgent attention”.

Spinal surgery billing concerns - Featured Image
Inconsistencies were found in the private health insurance billing records of more than 23 000 spinal surgery patients (Roman Zaiets / Shutterstock).

In one example, a patient allegedly underwent three complex procedures, with the patient’s file listing a billing code of 23041, which is used for a surgery that generally lasts 20–35 minutes. An expert told the ABC that it was unlikely all three procedures would have been able to be completed in that time frame.

The ABC’s report follows the publication of research, in the Medical Journal of Australia, which examined the clinical need for the increase in privately funded elective spinal surgeries in Australia.

“Rates of privately funded spinal fusion and decompression procedures have increased much more rapidly in New South Wales than those of procedures that are publicly funded or covered by workers’ compensation,” Professor Ian Harris, Dr Duong Tran and their colleagues wrote.

The research investigated rates of elective spinal fusion, decompression, and disc replacement procedures for people with degenerative conditions in NSW by the funding types of public, private and workers’ compensation.

They drew on a previous study which showed the rate of privately funded spinal fusions in Australia increased by 167% during 1997–2006 (from 7.7 to 20.5 per 100 000 population), while the publicly funded rate increased by only 2% (from 5.1 to 5.2 per 100 000 population).

It was also informed by a government report which showed that, between 2012 and 2018, 83% of spinal procedures in Australia were performed in the private sector (as were about two-thirds of hip and knee replacement procedures).

“[This suggests] that financial considerations are important and that access to surgical interventions may consequently be inequitable,” they wrote.

“These differences may indicate that some privately funded procedures are unnecessary, or that the number of publicly funded procedures does not reflect clinical need.

The research was co-authored by Professor Ian Harris from the University of New South Wales, Sydney, who describes his main area of research interest as “determining the true effectiveness of surgical interventions”.

At the time the research was published in August 2023, one of the study’s authors, research Fellow Dr Duong Tran, told InSight+ the disproportionate increases in privately funded spinal surgeries needed further investigation.

“[The disproportionate increase] may suggest overutilisation of fusion in the private sector, underutilisation of fusion in the public sector, or both,” Dr Tran said.

The availability of private health insurance may also be a factor, Dr Tran said.

“Patients with private health insurance may actively seek surgery if non-surgical management has not provided relief, while surgery may not be readily accessible to patients without private health insurance,” Dr Tran said.

Private Health Australia (PHA), which represents Australia’s private health insurance providers, said it has asked the payment integrity experts within its health funds to investigate allegations of fraud, waste and abuse in spine surgery for back pain.

“We expect the Department of Health and Aged Care will launch its own investigation as a matter of urgency and we’ll be seeking confirmation of this,” PHA CEO Dr Rachel David said.

“Low value care is both dangerous for patients and a drain on our health system. Research has repeatedly pointed to spinal fusion procedures as a major culprit. Not only are these interventions often of little or no benefit to the patient presenting with pain, there is a serious problem with fraud, waste, and abuse in this field.”  

The PHA said the surgical trends identified in the ABC report were “shocking”.

“Surgeons were billing for implausibly short periods of time – three surgeries in 30 minutes – which suggest the surgeries billed were not performed,” the PHA said in a statement.

“One anaesthetist claimed a 14-hour anaesthetic time for a spinal decompression and fusion, while others involved in the same surgery claimed the procedure lasted less than an hour.”

The Australian Society of Anaesthetists (ASA) has responded to the claims, hitting back at the allegations made against anaesthetists’ billing practices.

“There is a lack of transparency in the availability and interpretation of that [billing] data that alleged self-interest above patient interest,” the ASA said in a statement.

“Allegations of misuse of Medicare damage the reputation of the health care system and cause unnecessary concern for patients. These claims were investigated by the Health Minister last year and the subsequent report could not substantiate what was alleged.”

The ASA is referring to the Independent Review of Medicare Integrity and Compliance, conducted by Dr Pradeep Phillip, last year.

“Some of the broad-brush claims made, not by the impacted patients, were inflammatory and try to bring into disrepute the work done by anaesthetists around Australia on a daily basis,” the ASA statement said.

The Australian Medical Association (AMA) told InSight+ that compliance issues are overwhelmingly innocent mistakes.

“The federal government looked forensically at the issue of Medicare compliance through both a departmental review and Independent Review of Medicare Compliance, which found compliance issues are overwhelmingly innocent mistakes caused by the complexity of the system,” the AMA said in a statement.

“In relation to the Synapse/Kirontech report, it would have been better for insurers to work with the Department of Health and Aged Care to look at the data, and have it properly assessed against MBS requirements — in consultation with clinicians who understand what is involved in a procedure. It’s our understanding the ABC did not approach any of the relevant specialist colleges or societies for comment or input before publishing its story.”

“The clinical effectiveness and appropriate use of these devices is already being looked at by the Therapeutic Goods Administration, which is conducting a post market review of spinal cord stimulators. Regulators, not insurers, should make these decisions.”

Read the research in the Medical Journal of Australia

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7 thoughts on “Spinal surgery billing concerns

  1. patrick Liston says:

    These claims -about overlong billing by anaesthetists- by the expert are made without ( and they admit it) any review of the patients’ case notes. Instead they use the surgeons and the radiographers data to ” work out ” the times. Many multilevel spinal surgeries take many hours, in fact some surgeons do the operation in 2 or even 3 parts because to do it in one sitting may take over 14 hours. The surgical time may be 2 or 4 hours less as the anaesthetist has to prepare the patient an insert the IV, CVC and arterial lines ( yes they are needed) then the patient needs to be induced then positioned correctly ( by proning) and only then the surgery can begin. Following that the patient needs to be extubated and and recovered in PACU. A good anesthetist will hang around until the patient is sufficiently awake and stable- this may be another hour or so.
    If they had used the case notes they could easily have double checked the Nurses in and out times, operation start and op finish time, the anesthetists charted time the anaesthetic nurses times and the PACU nurses times. If they thought this was one big conspiracy and everyone was lying they could easily double check the anaesthetic machine computer with the patients’ observations.
    The fact they failed to use the patient medical records and made such claims without them shows that their data is flawed.

  2. matthew scott-young says:

    In response to the press release criticising spine surgeons, here’s a retort that addresses the concerns raised:

    The recent critique of spine surgeons, notably from individuals lacking specialised expertise in the field, warrants a thorough examination of the allegations’ underlying motivations and factual accuracy.

    Firstly, it’s crucial to discern the credibility of the sources levelling these accusations. Dr Ian Harris’s commentary on spine surgery, while from the orthopaedic domain, needs a more nuanced understanding from dedicated specialisation in spine surgery. Similarly, Rachel David’s association with a private health association for-profit insurer inherently predisposes her perspectives towards profit margins rather than patient care.
    The specific case cited regarding billing discrepancies underscores the need for transparency and accountability within the medical profession. However, avoiding painting all spine surgeons with a broad brush based on isolated incidents is essential. Instances of erroneous billing should be addressed through appropriate channels without tarnishing the entire profession’s reputation.

    Moreover, the scrutiny of privately funded spinal surgeries overlooks the multifaceted factors contributing to the surge in demand. Access to private healthcare, patient preferences, and advancements in surgical techniques all play significant roles in driving these trends. Blanket assertions of overutilisation fail to acknowledge the individualised nature of medical decision-making and patient care.

    Furthermore, allegations of fraud and misuse of Medicare must be substantiated with concrete evidence before casting aspersions on the integrity of healthcare providers. The Australian Medical Association’s assertion that compliance issues are predominantly innocent mistakes underscores the need for a nuanced understanding of the complexities inherent in healthcare billing practices.

    In conclusion, while scrutiny and accountability are integral to maintaining high standards in healthcare delivery, it’s imperative to approach criticisms of spine surgeons with discernment and fairness. Baseless accusations and generalisations undermine the invaluable contributions of dedicated healthcare professionals striving to improve patient outcomes.

  3. Anonymous says:

    Re: “One anaesthetist claimed a 14-hour anaesthetic time for a spinal decompression and fusion, while others involved in the same surgery claimed the procedure lasted less than an hour.”
    The other person involved in the surgery was likely to be the radiographer helping with a level check.
    This takes a few minutes and then they leave. The Medicare code for the level check is “….imaging less than 30 minutes” (or similar) and probably forms the basis of this claim.
    That particular code is not related to actual length of the procedure.

  4. Anonymous says:

    I wonder whether any Australian clinicians who implant spinal cord stimulators have received “kick-backs” (i.e. monetary reward) from the manufacturers of the devices they implant.

  5. Prof Jane Andrews says:

    There is much high value surgery NOT being done in Public Hospitals – due to “value” judgements about those needing the surgery (Bariatrics) and/or access to beds for planned care (joint replacements).

    We should be looking at why we deliver low value care to some, and fail to make room in the system for high value care – just because it CAN wait, doesn’t mean it is good to wait

  6. Neil Warwick, Westmead Hospital says:

    Interesting to use a UK-based, therefore NHS-oriented company to do a review when any boy scout knows that spinal decompression/fusion procedures get low priority in the public system … plus, of course, the increasing mass of humans is contributing to spinal collapse. No-brainer, really.

  7. anonymous says:

    Observations from a non-orthopaedist:
    1. To conclude that the higher number of procedures performed in private facilities and by private surgeons, compared with those under the public system results from a desire to maximise financial reward is fallacious in an environment when “elective” orthopaedic surgery is almost inaccessible within the public system. Any available public-based surgical capacity would be appropriately reserved for those who cannot afford private health insurance.

    In the context of incapacitating chronic spinal, hip and knee pain, “elective” appears nonsecuteur, particularly when one observes the often dramatic improvement in quality of life in even quite elderly people after hip-replacement.

    The length of surgical procedures such as spinal surgery clearly varies, depending upon its complexity.
    I cannot comment on other matters raised.

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