OBJECTIVES: Spinal cord stimulation (SCS) is an FDA approved therapy for failed back surgery syndrome. In clinical practice typically patients undergo a trial phase, in which temporary electrodes are implanted in the patients. Only those patients who experience adequate pain relief progress to the next step where the SCS electrodes and the pulse generator device are permanently implanted (trial success rate). Centers for Medicare & Medicaid Services (CMS) policy mandates this two-stage process for reimbursement eligibility. CMS recognizes three places of service for reimbursements, namely, physicians private practice clinic, Ambulatory Surgery Centers (ASC), and Hospital Outpatient department (HOPD). This study assessed the potential budget impact of policy change from a two-stage process to a one-stage process from Medicare perspective.

METHODS: The budget impact was determined in an excel based model by the cost difference between the two-stage (trial + permanent) vs one-stage (direct permanent step by eliminating trial stage) processes. Published utilization and expenditure study provided base case data on place of service (31% physician office, 40% ASC, and 29% HOPD for trial and 38% ASC and 62% HOPD for permanent stage) and 65% trial success rate data. The sensitivity analysis ranges were determined based on newer published clinical trial data.

RESULTS: For a 10,000-patient sample size, in the base case scenario, the one-stage process compared to two-stage process leads to an annual cost increase of $37.6million. However, the study was sensitive to the trial success rate. If the trial success rate was increased from 65% to 90% (based on recent published clinical data), the results yield an annual cost savings of $41.3million in a one-stage process.

CONCLUSIONS: The results indicate that eliminating the need for a mandatory trial-implant step in SCS may lead to cost savings for CMS especially as the trial-to-permanent implant success rate increases.