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Whether compensation for professional services drives the use of those services is an important question that has not been answered in a robust manner. Specifically, there is a growing concern that spine care practitioners may preferentially choose more costly or invasive procedures in a fee-for-service system, irrespective of the underlying lumbar disorder being treated.(1) Were proportions of interbody fusions higher in the fee-for-service setting as opposed to the salaried Department of Defense setting? (2) Were the odds of interbody fusion increased in a fee-for-service setting after controlling for indications for surgery?Patients surgically treated for lumbar disc herniation, spinal stenosis, and spondylolisthesis (2006-2014) were identified. Patients were divided into two groups based on whether the surgery was performed in the fee-for-service setting (beneficiaries receive care at a civilian facility with expenses covered by TRICARE insurance) or at a Department of Defense facility (direct care). There were 28,344 patients in the entire study, 21,290 treated in fee-for-service and 7054 treated in Department of Defense facilities. Differences in the rates of fusion-based procedures, discectomy, and decompression between both healthcare settings were assessed using multinomial logistic regression to adjust for differences in case-mix and surgical indication.TRICARE beneficiaries treated for lumbar spinal disorders in the fee-for-service setting had higher odds of receiving interbody fusions (fee-for-service: 7267 of 21,290 [34%], direct care: 1539 of 7054 [22%], odds ratio [OR]: 1.25 [95% confidence interval 1.20-1.30], p < 0.001). Purchased care patients were more likely to receive interbody fusions for a diagnosis of disc herniation (adjusted OR 2.61 [2.36-2.89], p < 0.001) and for spinal stenosis (adjusted OR 1.39 [1.15-1.69], p < 0.001); however, there was no difference for patients with spondylolisthesis (adjusted OR 0.99 [0.84-1.16], p = 0.86).The preferential use of interbody fusion procedures was higher in the fee-for-service setting irrespective of the underlying diagnosis. These results speak to the existence of provider inducement within the field of spine surgery. This reality portends poor performance for surgical practices and hospitals in Accountable Care Organizations and bundled payment programs in which provider inducement is allowed to persist.Level III, economic and decision analysis.