Outrageous spine surgery costs in California – now we know why

The FBI caught two California politicians allegedly accepting bribes to stop legislation that would have drastically cut reimbursement for spine surgeries.

Here’s the money quote:

“We’ve been keeping him [a spine surgery hospital CEO] in business now for the last four years, because the governor kept pushing these regs (sic) to cut the funding on these spinal surgeries for workers’ comp,” [CA State Senator] Calderon was quoted as telling an agent during a conversation on Nov. 2, 2012.

“All we’ve been trying to do is hold off that cut so they continue paying for that. The way it is now, they are leaving it up to the administrator at workers’ comp to decide how much they pay for these implants, and if they get cut out of that, they are out of business. So that’s what we’ve been working the last four or five years. You know, we’ve kept them going. We’ve pushed it off, pushed it off, pushed it off.”

Now we know why employers have been forced to pay for the implants twice; a loophole in California WC reimbursement requirements allowed hospitals to bill for the devices as part of the facility bill then again separately (that’s not exactly it but pretty close).

The Calderon brothers allegedly accepted bribes well in excess of $28,000 from Pacific Hospital of Long Beach and related parties to stall or stop legislation that would have fixed the loophole.  According to an FBI affidavit obtained by Al Jazeera;

[State Senator} Ronald Calderon..accepted approximately $28,000 in bribes from [Pacific Hospital CEO Michael] Drobot in exchange for directly enriching Drobot’s business by supporting legislation that would delay or limit changes in California’s workers’ compensation laws relating to the amount of money medical care providers are reimbursed for performing spinal surgeries.

So, there was malfeasance perpetrated by plundering profiteers who were looking to suck money out of California’s taxpayers and employers.  That’s bad – very bad.  A complaint filed by California’s State Compensation Insurance Fund, Drobot and his affiliates “alleges that [Drobot] received $161 million through inflated surgery room and spinal implant reimbursement fees in what the state calls “multiple fraudulent schemes.”

What’s worse is it is likely many of the work comp back surgeries were unnecessary at best and harmful at worst. 

Most of the procedures involving devices (the driver of Calderon’s scheme) were spinal fusions, a highly controversial procedure.  In 2011, more than 465,000 spinal fusions were performed in the US, and “some experts say that a portion of them — perhaps as many as half — were performed without good reason. (WaPo)

According to the article in the Washington Post;

The rate of spinal fusion surgery has risen sixfold in the United States over the past 20 years, [emphasis added] according to federal figures, and the expensive procedure, which involves the joining of two or more vertebrae, has become even more common than hip replacement.

Kudos to Al Jazeera for breaking the news. Gotta love those local papers…