Hospitals billed Medicare nearly 6 times what they were paid for the most complex spinal fusions in 2023. That number, a charge-to-payment ratio of 5.92 for combined anterior and posterior spinal fusion with major complications (DRG 453), is up from 4.34 a decade earlier. The procedure itself got modestly more expensive for Medicare: average payments rose from $89,076 in 2013 to $92,100 in 2023. But submitted charges went from $386,570 to $545,285 over the same period. The gap between what hospitals ask for and what they receive has never been wider.

That divergence is the defining feature of spinal fusion's financial trajectory inside Medicare, and it plays out differently depending on where a patient lives.

Maryland Costs 62% More Per Discharge Than Pennsylvania

State-level spending variation in spinal fusion is not a rounding error. In 2023, Maryland's Medicare payment per 100 discharges reached $5,255,979, the highest of any state. Pennsylvania, with more than twice as many discharges (3,413 vs. 1,990) and 44 hospitals billing for the procedure, came in at $3,241,519 per 100 discharges. That's a 62% gap between two mid-Atlantic states separated by a few hours of highway.

California had the highest raw spending total at $382,940,402 across 7,623 discharges and 84 hospitals. Maryland's total was $104,593,986, less than a third of California's. But on a per-discharge basis, Maryland led the country. Its 24 hospitals averaged $55,295 per discharge, compared to $31,063 in Pennsylvania. For Medicare, which pays fixed rates under the inpatient prospective payment system, that kind of variation reflects real differences in patient complexity, hospital cost structures, and how DRG weights interact with local wage indexes.

For patients, the implication is more direct: where you have surgery shapes what Medicare spends on your behalf, which in turn shapes what the program can sustain over time.

Volume Grew, But Pricing Pressure Grew Faster

DRG 460, the highest-volume spinal fusion code covering procedures without major complications, processed 70,778 discharges and $1.72 billion in Medicare payments in 2013. By 2014, that had grown to 74,291 discharges and $1.80 billion. The volume trend continued upward through the decade, driven by an aging Medicare population and expanded surgical indications.

But the more telling story is in the complex end of the spectrum. DRG 453 (combined anterior and posterior fusion with major complications) saw its charge-to-payment ratio climb from 4.34 in 2013 to 5.92 in 2023, a steady, uninterrupted increase with only minor dips in 2016 and 2019. Hospitals submitted an average of $545,285 per case in 2023 while receiving $92,100. The spread between those two numbers, now $453,185 per case, represents the negotiating fiction at the center of hospital pricing: list prices that bear little relationship to actual reimbursement, but that matter enormously for uninsured patients and for commercial insurers whose contracts are often anchored to Medicare rates.

A Decade Without Self-Correction

Spinal fusion is classified as elective or discretionary in the sense that clinical guidelines leave substantial room for physician judgment on timing and candidacy. That discretion has produced a market where volume and spending have moved in one direction for ten years without meaningful reversion.

The charge-to-payment ratio for DRG 453 rose in eight of the ten years between 2013 and 2023. Medicare payments for DRG 453 barely moved in real terms, from $89,076 to $92,100. But submitted charges grew 41% over the same period. Hospitals are not receiving more from Medicare for these cases. They are asking for more, and the distance between the ask and the answer keeps widening.

Given that Maryland's Medicare payment per 100 discharges is 62% higher than Pennsylvania's, the question the data leaves open is whether that gap reflects genuinely sicker patients, higher hospital costs, or something in how Maryland's provider market has structured its billing, and whether any of those explanations would survive a rigorous audit.