Medical Episode Grouper Analysis Case Study - Truven Health

Case Study

Treatment of Intervertebral Disc Disorders of the Lumbar Spine: An Analysis Using the Medical Episode Grouper (MEG)

September 2013

Table ofContents

Introduction 1

Lumbar Disc Disorder Prevalence and Price 2

Episode Price Components 3

Inpatient Care 4

Outpatient Care 5

Treatment Pathways 5

Inpatient Care 7

Outpatient Surgery 8

Outpatient Medical 9

Variation in Treatment Patterns 10

The Impact of Severity 11

Geographic Variation 12

Provider Variation 13

Summary 15

1An AnAlysis Using the MedicAl episode groUper

Considerable controversy exists among medical professionals regarding the most effective treatment for lower back spinal disc disorders. Potential treatments include surgery, minimally invasive spinal injections, physical therapy, chiropractic treatment, or a combination of these. The Journal of Bone and Joint Surgery has published a thorough article that summarizes multiple studies regarding the efficacy of various treatment protocols.1

The objective of this study was to analyze the variation present in treatment patterns and to quantify the differences in pricing/payment for the different options. The data source used was the Truven Health MarketScan® Commercial Claims Database, which contains the healthcare experience for more than 140 million privately insured individuals spanning 18 years. The dataset includes professional and facility inpatient and outpatient claims, as well as pharmacy claims and eligibility information. The data are linked by a common enrollee identifier, allowing for person-level analysis across the spectrum of care. A sample of the 2011 MarketScan data consisting of approximately 4.4 million enrollees with 20 million episodes was selected for use in this study.

Introduction

2 An AnAlysis Using the MedicAl episode groUper

Lumbar Disc Disorder Prevalence and PriceWithin the sample population, the musculoskeletal body system (MUS) is the top

contributor to medical payments, representing more than 18 percent of the total as

shown in Figure 1

Figure 1: Episode Medical Allowed Amount Percent of Total by Body System

Figure 2 illustrates that within the musculoskeletal body system, lower back

disorders represent the second costliest episode summary group in terms of total

payments (after Osteoarthritis) and the second most prevalent (after Arthropathies/

Joint Disorders)

Figure 2: Price and Prevalence of Musculoskeletal Episodes

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$0

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Musculoskeletal Episodes

% Allow Amt % Epis Mean Allow Amt


There are two episode groups that fall within the low back disorders summary group:

Intervertebral Disc Disorders: Lumbar and Lumbosacral and Other Spinal and Back

Disorders: Low Back The two groups contribute similar total allowed amounts

despite the fact that there are far fewer disc disorder episodes The disc episodes also

have a considerable amount of variation despite being a more specific diagnosis See

Table 1

Table 1: Low Back Disorder Episode Groups

Medical Allowed Amount

Episode Group Episodes % Total $ Mean $ Standard Deviation $

Intervertebral Disc Disorders: Lumbar and Lumbosacral

24,138 44.13% $4,320 $12,319

Other Spinal and Back Disorders: Low Back

220,141 55.87% $600 $3,549

Episode Price ComponentsTo analyze the significant price variation within the low back disc disorder episodes,

the 24,138 low back disc disorder episodes identified in the prior section were

limited to those that started and ended between March and October of 2011 This

is to exclude possible “incomplete” episodes that may exist at the beginning or end

of the data time period (episodes for which not all claim data is present in the 2011

dataset) In addition, only episodes paid under a fee-for-service arrangement with

medical allowed amounts greater than zero dollars were included in the sample so

that in-depth financial analysis could be performed Finally, episodes for individuals

who were not continuously enrolled between March and October were excluded

A total of 9,862 low back disc disorder episodes remained in the dataset with an

average medical allowed amount of $3,388 The list was then further constrained

to only qualified episodes to ensure that rare outlier episodes were excluded The

qualification criteria for low back disc disorder episodes are shown in Table 2

Table 2: Low Back Disc Disorder Disease Stages

Stage Qualifying Criteria

1.01 – 1.02 >= 1 face-to-face visit or >= 1 admission or >= 1 major procedure*

2.01+ >= 1 admission or >= 1 major procedure*

* Major procedures include: laminectomy or other decompression; vertebral corpectomy; lumbar fusion; epidural or subarachnoid injection (lumbar or sacral); injection of anesthetic agent and/or steroid and transforaminal epidural, with imaging guidance (lumbar or sacral).


Excluding the nonqualified episodes resulted in a dataset of 9,075 episodes with

an average medical allowed amount of $3,532 (Table 3), which were used for the

remainder of the study

Table 3: Episodes in Sample

Qualified? # Episodes Average Medical Allowed Amount

No 787 $1,210

Yes 9,075 $3,532

Total 9,862 $3,347

The distribution of allowed amount within these episodes is quite high, even after

limiting to qualified episodes, as shown in Figure 3

Figure 3: Episode Distribution by Medical Allowed Amount

Because the Medical Episode Grouper (MEG) retains a link to all claim-level

information included in the episode, one can determine what types of treatment

were included in a given episode of care

Inpatient CareInpatient care is uncommon among low back disc disorder episodes, with only 431

of the 9,075 episodes (4 7 percent) including an inpatient admission The admissions

that occur are overwhelmingly for surgical spinal procedures The two main types

of procedures performed are disc surgeries (excision or repair of disc) and spinal

fusion, with the former being much more common and less expensive (Table 4)

The Journal of Bone and Joint Surgery article (referenced earlier in this paper)

does not address fusion surgery as one of the surgical treatment options for disc

disorders The Milliman Care Guidelines for lumbar fusion consider the procedure

medically necessary in only very specific situations involving lumbar disc disorders:

“As a surgical adjunct to disc excision or reoperative discectomy in patients

with radiculopathy secondary to a herniated disc in whom there is documented

radiographic evidence of preoperative lumbar spinal instability (e g , anterolisthesis,

retrolisthesis, spondylolisthesis) ”2 In other words, disc herniation alone is not

justification for spinal fusion; an instability issue in the spine must also be present

0%

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80%

$250

$500

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00

$2,0

00

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00

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00

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Episode Distribution by Medical Allowed Amount

Qualified Episodes, n=9,075


Table 4: Top Inpatient Admissions in Low Back Disc Disorder Episodes

Base DRG % Cases Avg Length of Stay (LOS)

Average Admission Allowed $

490 Back and Neck Procedure Excluding Spinal Fusion

54.8% 1.49 $14,581

459 Spinal Fusion Excluding Cervical 28.9% 2.72 $52,714

551 Medical Back Problems 10.1% 2.87 $9,845

Outpatient CareThe following are the most common service types occurring in the outpatient setting

for these episodes The listed service types were selected based on their inclusion in

at least 15 percent of the episodes

Table 5: Top Outpatient Service Types in Low Back Disc Disorder Episodes

Service Type % Episodes With Service Type

Average Allowed Amount for Service Type per Episode

Specialist Office Visits 49% $171

Radiology 40% $734

Nonspecialist Office Visits 34% $175

Physical Therapy 26% $479

Injections and Medications 23% $450

Major Procedures 20% $4,819

Chiropractic Services 19% $166

Radiology: For these episodes, radiology services consist of a mix of major imaging

procedures (CT and MRI) as well as X-rays The average allowed amount for an X-ray

is about $100, while for a CT or MRI, the price ranges from $500 to $1,000

Injections and Medications: For these episodes, the most common injections used in

treatment are spinal injections of either a steroid or nerve-blocking agent

Major Procedures: This category clearly represents the biggest contributor to

outpatient medical payments within these episodes Most of the major procedures

within these episodes consist of low back surgeries (most often laminotomies)

Treatment PathwaysWith the previous major price contributors identified, the episodes were examined to

identify common patterns in treatment The following basic treatment profiles were

identified:

§ Inpatient (IP) Surgical

§ IP Medical

§ Outpatient (OP) Surgical

§ Physical Therapy (PT)/Chiropractic

§ Spinal Injections

§ PT/Chiropractic and Spinal Injections

§ No PT/Chiropractic or Spinal Injections (office visits with or without imaging)


PT/Chiropractic are identified by ranges of procedure codes that often overlap and

have similar pricing profiles, therefore these two types of treatment were combined

into one treatment pathway

Spinal injections include both nerve block and steroid injections — patients

typically had one or the other, not both

Figure 4 describes the frequency and average medical allowed amount associated

with each pathway

Figure 4: Treatment Pathways for Low Back Disc Disorder

All Qualified Episodesn=9,075

Avg $ = $3,532

Outpatient Care n=8,644$2,145

Inpatient Admission

n=431$31,349

Surgicaln=389

$33,364

Medicaln=7,995$1,160

Surgicaln=649$14,278

Medicaln=42

$12,694

w/ OP PT or Injections

n=165, $36,181

no OP PT or Injections

n=224, $31,288

w/ OP PT or Injections

n=360, $14,835

no OP PT or Injections

n=289, $13,584

PT/Chiropracticn=2,484, $800

Spinal Injections n=1,788, $2,057

PT and Injections n=499, $4,065

No PT / Injections

n=3,274, $546


Specific characteristics of the various treatment pathways are shown in Table 6

Table 6: Treatment Pathway Characteristics

Average Number of Visits/Episode

Treatment Pathway

% Episode

Average Medical

$ Per Episode

Average Episode Length (Days) Injection PT* Chiro* Office

Major Image

IP Surgery Alone 2.47% $31,288 37.00 - - - 1.96 0.57

IP Surgery With Other OP Treatments

1.82% $36,181 96.42 0.88 4.75 0.64 4.19 0.89

IP Medical 0.46% $12,694 36.43 0.48 0.79 0.12 1.81 0.45

OP Surgery Alone 3.18% $13,584 29.59 - - - 2.23 0.60

OP Surgery With Other OP Treatments

3.97% $14,835 72.25 0.83 3.63 1.06 3.75 0.76

Injection 19.70% $2,057 33.97 1.42 - - 2.18 0.33

PT/Chiro 27.37% $800 36.78 - 4.38 3.10 1.68 0.16

PT/Chiro and Injection

4.95% $4,065 88.24 1.69 6.12 2.36 4.62 0.72

No Major Treatment

36.08% $546 15.06 - - - 2.14 0.24

* Note that these are visits with a PT or Chiropractic procedure code — these visits may sometimes overlap and be performed during the same encounter.

Inpatient Care Episodes including inpatient surgical procedures are the most expensive of the low

back disc disorder episodes Episodes with inpatient medical stays are the third most

expensive, although they are extremely rare The price variation is significant within

these inpatient episodes as shown in Figure 5

Figure 5: Distribution of Medical Allowed Amount, Episodes With Inpatient Care

50%

40%

30%

20%

10%

0%


Qualified, IP Surgery, n=389

Qualified, No Surgery, IP Medical n=42

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Episodes including inpatient surgeries vary significantly on the length of time

between the start of the episode and the surgery date The average lag is 37 days

However, a significant number of episodes start with an inpatient surgery within

the first two weeks This implies that no prior diagnoses of low back disc disorder

occurred for these patients Figure 6 shows the average total episode medical

allowed amount vs inpatient allowed amount based on the lag prior to surgery

Figure 6: Lag Time Effect of Price of Inpatient Surgical Episodes

The data show that the later the surgery, the more expensive the total episode

(most likely due to other modalities of treatment being attempted prior to surgery)

Interestingly, longer lag times are also correlated with more expensive inpatient

surgeries This is due to a higher likelihood of a spinal fusion procedure being

performed, rather than a less expensive disc surgery As mentioned in the Inpatient

Care section (page 4), disc surgeries have an average price of approximately $15,000,

while fusion surgeries are typically much higher (average of $53,000) Of the

surgeries that took place at the beginning of the episode, only 24 percent were spinal

fusion surgeries, while of those taking place more than 60 days into the episode,

43 percent were spinal fusions

Outpatient SurgeryWhile less expensive than inpatient surgery, outpatient surgery is still a significant

contributor to episode price, and is by far the most expensive outpatient treatment

option Typically, only disc surgeries are performed on an outpatient basis (spinal

fusions usually require inpatient admission) Although the average price of

outpatient surgery is lower than inpatient disc surgeries, the price variation is still

significant within these outpatient surgical episodes as shown in Figure 7

0%

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Price and Frequency of Inpatient Surgical Episodes by Lag Time

Avg Episode Allowed Amt Average Inpatient Allowed Amt Percent of Epis


Figure 7: Episode Price Distribution: Episodes With Disc Surgery

Similar to inpatient surgeries, outpatient surgical episodes vary in terms of the lag

from when the episode starts until the surgery date Figure 8 shows that while the

average wait is 38 days, there is wide variation in this average

Figure 8: Lag Time Effects on Price of Outpatient Surgery

Unlike in the case of inpatient surgery, outpatient surgeries that are delayed do not

necessarily result in higher total episode price, nor in higher average surgical price

Outpatient MedicalFor episodes without surgical intervention, there are two main treatment modalities

— spinal injections and PT/Chiropractic (or a combination of both) As shown in

Figure 9, episodes including spinal injections have a significantly higher price

profile than those with PT/Chiropractic alone Episodes with neither of these

treatment protocols are the least expensive

0%

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$0

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Price and Frequency of Outpatient Surgical Episodes by Lag Time

Avg Epis Allowed Amt Average OP Surg Allowed Amt Percent of Episodes

80%

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Qualified, IP Surgery, Disc Only, n=239

Qualified, OP Surgery, n=649

Qualified, No Surgery or Admit, n=7,995


Figure 9: Episode Price Distribution, Episodes Without Surgery or Inpatient Care

Finally, the use of major imaging (CT/MRI) has a significant effect on any outpatient

medical episode Major imaging is used with varying degrees of frequency depending

on the treatment pathway as shown in Table 7

Table 7: Use of Major Imaging by Treatment Pathway

Treatment Pathway % With Outpatient Major Imaging

Average Episode $ With Imaging

Average Episode $ Without Imaging

IP Surgery Alone 49.11% $33,685 $28,976

IP Surgery w/ Other OP Treatments

69.09% $38,362 $31,305

IP Medical 38.10% $12,743 $12,664

OP Surgery Alone 54.67% $14,410 $12,588

OP Surgery w/ Other OP Treatments

70.28% $16,429 $11,067

Spinal Injection 31.38% $3,162 $1,551

PT/Chiropractic 15.38% $2,431 $504

PT/Chiropractic and Injection

67.71% $4,645 $2,847

No Major Treatment 22.66% $1,700 $207

Variation in Treatment Patterns The above analysis shows that the type of treatment provided is a very significant

contributor to the total price of a low back disc episode The next question is

whether these treatment variations are justified by the severity of the particular case,

or whether they are more likely to represent preferences of the provider or patient

Disease Staging within MEG offers a simple way to assess the severity of patients

70%

60%

50%

40%

30%

20%

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Qualified, No Surgery or Admit, n=7,995

Qualified, No Surgery or Admit, PT/Chiro, n=2,933

Qualified, No Surgery or Admit, Injection, n=1,788

Qualified, No Surgery or Admit, PT/Chiro and Injection, n=449

Qualified, No Surgery or Admit, No Major Treatment, n=3,274


The Impact of SeverityThe following Disease Stages are defined for low back disc disorder episodes

Table 8: Disease Stages for Low Back Disc Disorder Episodes

Stage Description

1.01 Prolapse of the intervertebral disc (herniated lumbar disc with localized symptoms/no nerve impairment)

1.02 Symptomatic prolapse of the intervertebral disc § pain radiating to leg(s) or arm(s) § OR weakness of arm(s) or leg(s) § OR cervical radiculopathy [physical examination or EMG report] § OR lumbar radiculopathy [EMG report]

2.01 Intervertebral disc disorder with loss of bladder or bowel control

2.02 Intervertebral disc disorder with cauda equina syndrome or conus medullaris syndrome

2.03 Intervertebral disc disorder with paraplegia

2.04 Intervertebral disc disorder with quadriplegia

2.05 Intervertebral disc disorder with pneumonia (aspiration or bacterial)

3.01 Intervertebral disc disorder with sepsis

3.02 Intervertebral disc disorder with shock

It is reasonable to assume that for the higher severity cases (those above stage 2), a

more aggressive treatment might be the most appropriate option for rapid resolution

of symptoms Although The Journal of Bone and Joint Surgery article describes

the lack of evidence indicating that surgical intervention is more effective than

other treatments for symptomatic disc herniation, it does indicate that “for patients

with a progressive neurological deficient and cauda equina syndrome, urgent

decompression provides the best functional improvement ” An article published in

the European Spine Journal indicates that in the case of advanced symptoms (such

as those presented in stage 2 01 and higher), there should be no question of whether

surgery should be attempted, but instead the question is how quickly the surgery

should be performed to minimize long-term effects 3

Figure 10 describes the distribution of treatment pathways by stage

Figure 10: Distribution of Treatment Pathway by Disease Stage

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1.01 1.02 2.01+

Distribution of Treatment by Disease Stage

No Major Treatment


PT/Chiro

Injection

OP Surgery

Inpatient Care


As expected, patients with stages above 2 0 are far more likely to receive inpatient

(usually surgical) intervention Lower severity patients are much more likely to

receive care in an outpatient setting The profiles of stage 1 01 and 1 02 patients are

very similar

The vast majority of episodes (89 percent) have the lowest severity stage, that is,

localized symptoms without any nerve impairment (see Table 9) It is those cases

where one might expect to see the greatest impact of preferential treatment rather

than severity-based treatment decisions Therefore the remaining variation analysis

is focused on stage 1 01 only

Table 9: Distribution and Allowed Amount by Stage

Disease Stage Episodes Average $

1.01 8,093 $3,477

1.02 967 $3,635

2.01+ 15 $26,914

Total 9,075 $3,532

Geographic VariationGeographic variation is frequently seen in patterns of treatment for various

conditions Analyzing treatment patterns for low back disc episodes by geographic

area reveals the differences for patients in stage 1 01 described in Figure 11

Figure 11: Distribution of Treatments by Division

The West North Central and East South Central divisions have the highest rates of

surgery overall, while the South Atlantic division has the highest rate of inpatient

surgery Spinal Injections are far more common in the West North Central and East

South Central divisions as well The Mountain division is most likely to use no

significant treatment modalities, while PT/Chiropractic care are most common in the

Pacific and New England divisions

The use of major imaging also varies by geographic region as shown in Figure 12,

which compares the episodes without any major treatment protocol (no surgery, PT,

or spinal injections)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

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Distribution of Treatments for Stage 1.01 Episodes by Geographic Division

No Major Treatment


PT/Chiro

Injection

OP Surgery

Inpatient Care


Figure 12: Rates of Major Imaging by Division (Limited to Episodes With No Major Treatment)

The highest rates of major imaging are found in the West North Central and East

South Central divisions

Provider VariationMEG assigns both a managing and primary physician to each episode While

the primary physician is the physician with the most work effort in the episode

(measured by relative value units), the managing physician is the physician with

the most evaluation and management involvement with the patient The managing

physician, therefore, is the physician assumed to be directing the care pathway

for the patient Although MarketScan data do not allow for the identification of

individual physicians, the data do allow for the identification of physician types

The most common managing physician types for stage 1 01 low back disc episodes

are displayed in Figure 13

Figure 13: Distribution of Episodes by Managing Physician Type

0%

5%

10%

15%

20%

25%

30%

35%

East North

Central

West North

Central

Middle Atlantic

New England

East South

Central

South Atlantic

West South

Central

Mountain Pacific

% Epis with no Major Treatment with Major Imaging

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000

0% 2% 4% 6% 8%

10% 12% 14% 16% 18%

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Other

Sur

geon

Neuro

logy

Physic

al Med

icine

and

MultiS

pecial

ty P

hys G

rp

Distribution of Stage 1.01 Episodes by Managing Physician Type

Percent of Episodes Average Med Allowed Amt


Different managing physician types show different preferences in treatment protocol

as shown in Figure 14

Figure 14: Distribution of Treatment Pathways by Managing Physician Type

Not surprisingly, surgeons are more likely to manage patients who receive surgery

or spinal injections while other nonsurgeon physicians are more likely to promote

physical therapy It is likely that even within specialty groups, certain individual

physicians show a preference for specific treatment protocols In datasets with

consistent unique provider identifiers, MEG would enable this type of analysis to be

performed

Use of major imaging is also affected by provider type Figure 15 shows that after

limiting to episodes with no major treatment, considerable variation exists in terms

of the percentage of episodes that included major imaging

Figure 15: Major Imaging Rate by Managing Physician Type (Limited to Episodes With No Major Treatment)

0% 5%

10% 15% 20% 25% 30% 35% 40% 45%

Primar

y Car

e

Orthopae

dic Sur

gery

Chiro

pract

or/DCM

Neuro

logica

l Sur

gery

Medica

l Doct

or — M

D (NEC)

Anest

hesio

logy

Pain M

gmt/

Pain M

edici

ne

Other

Sur

geon

Neuro

logy

Physic

al Med

icine

and

Reh

ab

MultiS

pecial

ty P

hys G

rp

% Epis with no Major Treatment with Major Imaging

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

PCP

Orthopae

dic Sur

gery

Chiro

pract

or/DCM

Neuro

logica

l Sur

gery

Medica

l Doct

or — M

D (NEC)

Anest

hesio

logy

Pain M

gmt/

Pain M

edici

ne

Other

Sur

geon

Neuro

logy

Physic

al Med

icine

and

Reh

ab

MultiS

pecial

ty P

hys G

rp


No Major Treatment


PT/Chiro

Injection

OP Surgery

Inpatient Care 0%

10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

PCP

Orthopae

dic Sur

gery

Chiro

pract

or/DCM

Neuro

logica

l Sur

gery

Medica

l Doct

or — M

D (NEC)

Anest

hesio

logy

Pain M

gmt/

Pain M

edici

ne

Other

Sur

geon

Neuro

logy

Physic

al Med

icine

and

Reh

ab

MultiS

pecial

ty P

hys G

rp


No Major Treatment


PT/Chiro

Injection

OP Surgery

Inpatient Care


SummaryThrough use of MEG, we have analyzed the relative expense of low back disc

disorders in comparison to other musculoskeletal conditions We have also been

able to identify treatments that are the primary drivers of that expense, identify the

most common treatment pathways, and examine variations in utilization of those

pathways by geography as well as by provider type This type of analysis would

be extremely difficult to accomplish using claims data in an ungrouped form The

ability of MEG to group the related treatments, recognize the severity of the patient’s

condition, maintain links to the detailed claim data, and identify the managing

physician were all critical elements to this analysis

References1 Rhee JM, Schaufele M, Abdu WA Radiculopathy and the Herniated Lumbar

Disc. Controversies Regarding Pathophysiology and Management J Bone Joint

Surg Am 2006;88-9:2070-2080

2 Reducing Utilization Concerns Regarding Spinal Fusion and Artificial Disc

Implants Published online by AllMed Healthcare Management

(www allmedmd com)

3 Gardner A, Gardner E, Morley T Cauda equina syndrome: a review of the current

clinical and medico-legal position Eur Spine J 2011 May; 20(5): 690–697

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Medical Episode Grouper Analysis Case Study - Truven Health