Falling Medicare Reimbursement Rates for Orthopaedic Trauma Care
The amount that Medicare reimburses for orthopaedic trauma surgery has fallen by nearly one third over the past 2 decades, according to a study from NYU Langone Health published online ahead of print by the Journal of Orthopaedic Trauma.
“When adjusted for inflation, [Medicare] reimbursement for common procedures in orthopaedic trauma surgery has steadily decreased from 2000 and 2020,” according to the new research by Kenneth A. Egol, MD, and colleagues from NYU Langone Health. “Given increasing volumes and costs associated with medical practice in the United States, continued change may be necessary to ensure the financial health and success of physicians and hospitals caring for victims of orthopedic trauma.”
RELATED: Register for the 18th Annual Current Solutions in Orthopaedic Trauma, November 12-14 in Tampa, Florida
Using publicly available data from the Centers for Medicare & Medicaid Services (CMS), the researchers examined reimbursement trends from 2000 to 2020 for the 20 most commonly billed surgical procedure codes in orthopaedic trauma. The majority of the surgical procedures were for traumatic bone fractures requiring surgical repair with some type of hardware (internal fixation). Costs were adjusted for inflation to 2020 dollars, based on the Consumer Price Index (CPI), a widely used measure of inflation.
During the study period, the CPI increased by 52.8%, compared with an average increase in Medicare reimbursement for the 20 orthopaedic trauma surgery procedures of only 4.9%. After correction to 2020 dollars, average reimbursement for health care procedures for orthopaedic trauma actually decreased by 30%. Annual data showed a steady decline of 1.5% per year, demonstrating that reimbursement from the federal government is failing to keep up with increases in the cost of living
The trends varied by procedure type:
- 42.6% decrease for foot and ankle procedures
- 31.9% decrease for hip fracture surgery (often a life-saving procedure)
- 30.9% decrease for lower extremity long bone procedures
- 23.7% decrease for shoulder and upper extremity procedures
Medicare reimbursements are calculated using Relative Value Units (RVUs) for individual procedures, an arbitrary multiplier that is supposed to reflect the value of the physician’s work, practice expenses, and malpractice coverage. Average total RVUs for the 20 procedures increased 4.4% from 2000 to 2020. The majority of the increase was in malpractice RVUs, with a small decrease in practice expense RVUs despite evidence showing that practice costs have increased in recent years.
Orthopaedic surgery has been a major focus of Medicare payment reforms, with experiments including bundled payment programs for joint replacement surgery. “[T]he decisions made by the Centers for Medicare and Medicaid Services have had a large-scale impact on reimbursement, influencing both the public and private healthcare sectors,” according to the study authors.
They reviewed policy actions that have led to declining Medicare reimbursements, as well as the possible impact of new initiatives designed to incentivize quality and value of care rather than quantity of care. “Despite … uncertainty regarding the future, the evidence demonstrates a clear trend of decreasing Medicare reimbursement in orthopedic trauma surgery,” they said, concluding that “[i]ncreased awareness and consideration of these trends will be important for policy-makers, hospitals, and surgeons in order to assure continued access to high quality surgical orthopedic trauma care in the United States.”
The authors said they hope their findings will serve as a “springboard” for efforts to develop sustainable policies to provide fair reimbursement for essential trauma surgery for the growing population of older adults covered by Medicare.
Haglin JM, Lott A, Kugelman DN, Konda SR, Egol KA. Declining medicare reimbursement in orthopedic trauma surgery: 2000-2020. J Orthop Trauma. 2020 Sep 17. doi: 10.1097/BOT.0000000000001947. Online ahead of print.