Reimbursement for Orthopaedic Surgeries in Commercial and Public Payors: A Race to the Bottom

Introduction: The purpose of this study was to compare surgeon professional fee reimbursement and trends from Medicare versus commercial payors for inpatient orthopaedic surgeries: total knee arthroplasty (TKA), total hip arthroplasty (THA), total shoulder arthroplasty (TSA), anterior cervical diskectomy and fusion (ACDF), and posterior lumbar fusion (PLF). Methods: Patients undergoing TKA, THA, TSA, single-level ACDF, and single-level PLF from 2010 to 2018 were queried in a commercially insured claims database. Medicare reimbursements and the work relative value unit (wRVU) of each procedure were obtained from the Medicare Physician Fee Schedule. All costs were adjusted for inflation and reported in 2018 real dollars. Compound annual growth rates were calculated to assess the mean growth rate for each procedure. Linear regression was done to assess trends. Results: On average, payments from Medicare were 57% less than payments from commercial payors. From 2010 to 2018, both Medicare and commercial payments decreased significantly for each surgery (P, 0.05 for all). Compared with inflation- adjusted commercial payments, Medicare payments decreased 2.1 times faster for TKA (22.1% versus 21.0%), 2.8 times faster for THA (21.4% versus 20.5%), 1.3 times faster for TSA (21.0% versus 20.8%), and 1.9 times faster for ACDF (21.1% versus 20.6%). PLF was the only procedure for which Medicare payments declined slower than commercial payments (20.6% versus 21.21%). Medicare payments per wRVU markedly declined for TKA (20.83%), THA (20.80%), TSA (20.75%), and ACDF (21.10%), whereas commercial payments per wRVU for those surgeries showed no notable change. For PLF, there was a notable decrease in both Medicare (20.63%) and commercial (21.21%) payments per wRVU. Conclusion: Over the past decade, both commercial and Medicare surgeon payments for commonly performed inpatient orthopaedic surgeries decreased markedly, with Medicare payments decreasing an average of 1.5 times faster than commercial payments. The impact of declining reimbursements on access and quality of care merits additional investigation.