Variation in Physician Charges and Medicare Payments for Hand Surgery

An Analysis of Procedural Medicare Reimbursement Rates in Hand Surgery: 2000 to 2019

BACKGROUND

Medicare reimbursement trends across multiple surgical subspecialties have been analyzed; however, little has been reported regarding the long-term trends in reimbursement of hand surgery procedures. The aim of this study is to analyze trends in Medicare reimbursement for commonly performed hand surgeries.

METHODS

Using the Centers for Medicare and Medicaid Services Physician and Other Supplier Public Use File, we determined the 20 hand surgery procedure codes most commonly billed to Medicare in 2016. Reimbursement rates were collected and analyzed for each code from The Physician Fee Schedule Look-Up Tool for years 2000 to 2019. We compared the change in reimbursement rate for each procedure to the rate of inflation in US dollars, using the Consumer Price Index (CPI) over the same time period.

RESULTS

The reimbursement rate for each procedure increased on average by 13.9% during the study period while the United States CPI increased significantly more by 46.7% (P < .0001). When all reimbursement data were adjusted for inflation to 2019 dollars, the average reimbursement for all included procedures in this study decreased by 22.6% from 2000 to 2019. The average adjusted reimbursement rate for all procedures decreased by 21.92% from 2000 to 2009 and decreased by 0.86% on average from 2009 to 2019 (P < .0001).

CONCLUSION

When adjusted for inflation, Medicare reimbursement for hand surgery has steadily decreased over the past 20 years. It will be important to consider the implications of these trends when evaluating healthcare policies and the impact this has on access to hand surgery.

Variability in Medicaid Reimbursement in Hand Surgery May Lead to Inequality in Access to Patient Care

BACKGROUND

Medicare (MCR) and Medicaid (MCD) remain the dominant providers of government-funded health insurance in the United States. The purpose of this study was to evaluate the variability between MCR and MCD reimbursements for common hand and wrist surgical procedures. We hypothesized that MCD reimbursement rates would have substantial variation between states, whereas MCR rates would remain relatively constant.

METHODS

Using the Medicare Physician Fee Schedule Database, the 2019 reimbursements for 7 common hand and wrist procedures were recorded via the respective Current Procedural Terminology codes. The MCD reimbursement rates were then obtained from each state's physician fee schedule database. Comparisons of reimbursement for these procedures were then calculated between states and between MCD and MCR while adjusting for cost of living using the Medicare Wage Index. Finally, the coefficients of variation were computed to compare the extent of variability between the insurance types.

RESULTS

Across all procedures, reimbursement rates for MCD ranged from 30.6% to 240% of the average MCR reimbursement, with the mean reimbursement for MCD valued at 78.3% of MCR. Endoscopic carpal tunnel release (CTR) is valued similarly by MCD compared with open CTR with an average of 77.7% and 78.2% reimbursement of MCR, respectively. The coefficients of variation for MCD reimbursements ranged from 0.25 to 0.45, whereas the value was 0.06 for all MCR procedures.

CONCLUSIONS

These findings demonstrate a wide variation in MCD payments between states. When compared with MCR, the lower average state MCD reimbursement questions the sustainability for hand surgeons to accept these patients in practice.

Are We Working Harder for Less Pay? A Survey of Medicare Reimbursement for Hand and Upper Extremity Surgery

BACKGROUND

Ongoing concern for declining Medicare payment to surgeons may incentivize surgeons to perform more cases to maintain productivity goals. The authors evaluated trends in physician payment, patient charges, and reimbursement ratios for the most common hand and upper extremity surgical procedures.

METHODS

The authors examined Medicare surgeon payment, patient charges, and surgical volume from 2012 to 2017 for 83 common surgical procedures, incorporating the year-to-year Consumer Price Index to adjust for inflation. The reimbursement ratio was calculated by dividing payment by charge. Weighted (by surgery type and volume) averages were calculated.

RESULTS

Total Medicare surgeon payment increased 5.6 percent to $272 million for the studied procedures. Patient charges were seven times greater than payment, growing 24 percent to $1.9 billion. Despite growth of total payment, the average overall weighted payment for a single surgery decreased 3.5 percent. The average weighted patient charge increased 8 percent, whereas the reimbursement ratio decreased 13 percent. A hand surgeon would need to perform three more cases per 100 in 2017 to maintain the same reimbursement received in 2012. After categorizing these 83 surgical procedures, distal radius fixation (>3 parts, 21 percent increase; >2-part intra-articular, extra-articular, and percutaneous pinning, 17 percent increase), bony trauma proximal to the distal radius (10 percent increase), and upper extremity flap (5 percent increase) were subject to the greatest increases in payment. Payment for forearm fasciotomy (39 percent decrease), endoscopic carpal tunnel release (30 percent decrease), and mass excisions proximal to the wrist (18 percent decrease) decreased the most.

CONCLUSIONS

From 2012 to 2017, despite a disproportionate increase in procedure charges, Medicare surgeon payment has not decreased substantially; however, total reimbursement is multifactorial and involves multiple sources of revenue and cost.

Volar Plate Fixation in Adults with a Displaced Extra-Articular Distal Radial Fracture Is Cost-Effective

BACKGROUND

To our knowledge, a health economic evaluation of volar plate fixation compared with plaster immobilization in patients with a displaced extra-articular distal radial fracture has not been previously conducted.

METHODS

A cost-effectiveness analysis of a multicenter randomized controlled trial was performed. Ninety patients were randomly assigned to volar plate fixation or plaster immobilization. The use of resources per patient was documented prospectively for up to 12 months after randomization and included direct medical, direct non-medical, and indirect non-medical costs due to the distal radial fracture and the received treatment.

RESULTS

The mean quality-adjusted life-years (QALYs) at 12 months were higher in patients treated with volar plate fixation (mean QALY difference, 0.16 [bias-corrected and accelerated 95% confidence interval (CI), 0.07 to 0.27]). (The 95% CIs throughout are bias-corrected and accelerated.) In addition, the mean total costs per patient were lower in patients treated with volar plate fixation (mean difference, -$299 [95% CI, -$1,880 to $1,024]). The difference in costs per QALY was -$1,838 (95% CI, -$12,604 to $9,787), in favor of volar plate fixation. In a subgroup analysis of patients who had paid employment, the difference in costs per QALY favored volar plate fixation by -$7,459 (95% CI, -$23,919 to $3,233).

CONCLUSIONS

In adults with a displaced extra-articular distal radial fracture, volar plate fixation is a cost-effective intervention, especially in patients who had paid employment. Besides its better functional results, volar plate fixation is less expensive and provides a better quality of life than plaster immobilization.

LEVEL OF EVIDENCE

Economic Level I. See Instructions for Authors for a complete description of levels of evidence.