A Comprehensive Monetary Analysis of Inpatient Total Hip and Knee Arthroplasties Billed to Medicare by Hospitals: 2011-2017

Medicaid Reimbursement for Total Hip and Knee Arthroplasty: A State-by-State Analysis Compared With Medicare

BACKGROUND

Medicare (MCR) reimbursement for arthroplasty procedures has been declining, but little has been reported on Medicaid (MCD) reimbursement. We sought to determine MCD reimbursement rates using state MCD data for nine arthroplasty procedure codes and compare them to MCR rates.

METHODS

The Centers for Medicare & Medicaid Services physician fee schedule was used to collect MCR reimbursement rates, and state MCD fee schedules were accessed to collect MCD rates for nine procedures encompassing primary and revision hip and knee arthroplasty surgery. State MCR and MCD rates were compared to determine the mean dollar difference and dollar difference per relative value unit. A cost of living adjustment was performed using the Medicare Wage Index for each state. Coefficients of variation were calculated for each state to determine overall variability between the two systems.

RESULTS

The mean reimbursement rates for MCD were lower for eight of the nine codes used in the study. Medicaid reimbursed physicians an average of 11.3% less overall and 23.1% less when adjusted for cost of living. The amount of variability in the MCR rates was low with a consistent coefficient of variation of 0.06, but was higher in the MCD rates with a range of 0.26 to 0.29 in the unadjusted rates and 0.34 to 0.37 in the adjusted rates. There was a mean $6.73 decreased reimbursement per relative value unit for MCD procedures.

CONCLUSIONS

For the most common arthroplasty procedures, MCD reimbursed physicians less than MCR on average. MCD also demonstrated increased variability when compared to MCR rates between states.

Trends in Costs and Professional Reimbursements for Revision Total Hip and Knee Arthroplasty

BACKGROUND

With increasing numbers of revision total hip and total knee arthroplasties (rTHAs and rTKAs), understanding trends in related out-of-pocket (OOP) costs, overall costs, and provider reimbursements is critical to improve patient access to care.

METHODS

A large database was used to identify 92,116 patients who underwent rTHA or rTKA between 2009 and 2018. The OOP costs associated with the surgery and related inpatient care were calculated as the sum of copayment, coinsurance, and deductible payments. Professional reimbursement was calculated as total payments to the principal physician. All monetary data were adjusted to 2018 dollars. Multivariate regressions evaluated the associations between costs and procedure type, insurance type, and region of service.

RESULTS

From 2009 to 2018, overall costs for rTHA significantly increased by 35.0% and overall costs for rTKA significantly increased by 32.3%. The OOP costs for rTHA had no significant changes, while OOP costs for rTKA increased by 20.1%, with patients on Medicare plans having the lowest OOP costs. Professional reimbursements, when measured as a percentage of overall costs, decreased significantly by 4.4% for rTHA and 4.0% for rTKA, with the lowest reimbursements from Medicare plans.

CONCLUSION

From 2009 to 2018, total costs related to rTHA and rTKA significantly increased. The OOP costs significantly increased for rTKA, and professional reimbursements for both rTHA and rTKA decreased relative to total costs. Overall, these trends may combine to create greater financial burden to patients and the healthcare system, as well as further limit patients' access to revision arthroplasty care.

Lower Revenue Surplus in Medicare Advantage Versus Private Commercial Insurance for Total Joint Arthroplasty: An Analysis of a Single Payor Source at One Institution

BACKGROUND

Since the Affordable Care Act was passed in 2010, reductions in Medicare reimbursement have led to larger discrepancies between the relative cost of Medicare patients and privately insured patients. The purpose of this study was to compare reimbursement between Medicare Advantage and other insurance plans in patients undergoing total hip arthroplasty (THA) and total knee arthroplasty (TKA).

METHODS

Patients of a single commercial payor source who underwent primary unilateral TKA or THA at 1 institution between the dates of January 4 and June 30, 2021, were included (n = 833). Variables included insurance type, medical comorbidities, total costs, and surplus amounts. The primary outcome measure was revenue surplus between Medicare Advantage and Private Commercial plans. t-tests, Analyses of Variance, and Chi-Squared tests were used for analysis. A THA represented 47% of cases and a TKA 53%. Of these patients, 31.5% had Medicare Advantage and 68.5% had Private Commercial insurance. Medicare Advantage patients were older and had higher medical comorbidity risk for both TKA and THA.

RESULTS

Significant differences were observed in medical costs between Medicare Advantage and Private Commercial insurance for THA ($17,148 versus $31,260, P < .001) and TKA ($16,723 versus $33,593, P < .001). Additionally, differences were seen in surplus amounts between Medicare Advantage and Private Commercial insurance for THA ($3,504 versus $7,128, P < .001) and TKA ($5,581 versus $10,477, P < .001). Deficits were higher in Private Commercial patients undergoing TKA (15.2 versus 6%, P = .001).

CONCLUSION

The lower average surplus associated with Medicare Advantage plans may lead to financial strain on provider groups who care for these patients and face additional overhead costs.

Poor Patient Compliance Limits the Attainability of Patient-Reported Outcome Measure Completion Thresholds for the Comprehensive Care for Joint Arthroplasty Model

BACKGROUND

The Centers for Medicare and Medicaid Services (CMS) links patient-reported outcome measures (PROMs) with hospital reimbursement in some value-based models for total joint arthroplasty (TJA). This study evaluates PROM reporting compliance and resource utilization using protocol-driven electronic collection of outcomes for commercial and CMS alternative payment models (APMs).

METHODS

We analyzed a consecutive series of patients undergoing total hip arthroplasty (THA) and total knee arthroplasty (TKA) from 2016 and 2019. Compliance rates were obtained for reporting hip disability and osteoarthritis outcome score for joint replacement (HOOS-JR.), knee disability and osteoarthritis outcome score for joint replacement (KOOS-JR.), and 12-item short form survey (SF-12) surveys preoperatively and postoperatively at 6-months, 1 year, and 2- years. Of 43,252 THA and TKA patients, 25,315 (58%) were Medicare-only. Direct supply and staff labor costs for PROM collection were obtained. Chi-square testing compared compliance rates between Medicare-only and all-arthroplasty groups. Time-driven activity-based costing (TDABC) estimated resource utilization for PROM collection.

RESULTS

In the Medicare-only cohort, preoperative HOOS-JR./KOOS-JR. compliance was 66.6%. Postoperative HOOS-JR./KOOS-JR. compliance was 29.9%, 46.1%, and 27.8% at 6 months, 1 year, and 2 years, respectively. Preoperative SF-12 compliance was 70%. Postoperative SF-12 compliance was 35.9%, 49.6%, and 33.4% at 6 months, 1 year, and 2 years, respectively. Medicare patients had lower PROM compliance than the overall cohort (P < .05) at all time points except preoperative KOOS-JR., HOOS-JR., and SF-12 in TKA patients. The estimated annual cost for PROM collection was $273,682 and the total cost for the entire study period was $986,369.

CONCLUSION

Despite extensive experience with APMs and a total expenditure near $1,000,000, our center demonstrated low preoperative and postoperative PROM compliance rates. In order for practices to achieve satisfactory compliance, Comprehensive Care for Joint Replacement (CJR) compensation should be adjusted to reflect the costs associated with collecting these PROMs and CJR target compliance rates should be adjusted to reflect more attainable levels consistent with currently published literature.

Are Trends in Revision Total Joint Arthroplasty Sustainable? Declining Inflation-Adjusted Medicare Reimbursement for Hospitalizations

BACKGROUND

While the burden of revision total joint arthroplasty (TJA) procedures increases within the United States, it is unclear whether health care resource allocation for these complex cases has kept pace. This study examined the trends in hospital-level reimbursements for revision TJA hospitalizations.

METHODS

The Centers for Medicare and Medicaid Services (CMS) inpatient utilization and payment public use files from 2014 to 2019 were queried for diagnostic-related groups (DRGs) for revision TJA: DRG 467 (revision of hip or knee arthroplasty with complication or comorbidity [CC]) and DRG 468 (revision of hip or knee arthroplasty without CC or major CC). From 2014 to 2019, 170,808 revision TJA hospitalizations were billed to Medicare, and revision TJA procedures increased by 3,121 (10.7%). After adjusting to 2019 US dollars with the consumer price index, a multiple linear mixed-model regression analysis was performed. Analysis of covariance compared regressions from 2014 to 2019 for mean-adjusted Medicare payment and mean- adjusted charge were submitted for these DRGs.

RESULTS

Mean-adjusted average Medicare payment for DRG 467 decreased by $804.37 (-3.5%) from 2014 to 2019, whereas, that for DRG 468 decreased by $647.33 (-3.6%). The average inflation-adjusted Medicare payment for DRG 467 decreased at a greater rate during the study period, compared to that for DRG 468 (P = .02).

CONCLUSION

The decline in reimbursement for DRGs 467 and 468 reveals decreasing incentives for revision TJA hospitalizations. Further research should assess the efficacy of current Medicare payment algorithms and identify modifications which may provide for fair hospital level reimbursements.

Recent Trends in Medicare Utilization and Reimbursement for Lumbar Fusion Procedures: 2000-2019

OBJECTIVE

Lumbar fusions are commonly performed spinal procedures. Despite this, publicly available lumbar fusion procedural and monetary data are sparse. This study aimed to evaluate trends in utilization and reimbursement for Medicare patients from 2000-2019.

METHODS

Medicare National Summary Data Files were used. Data were collected for true physician reimbursements and procedural rates for posterolateral fusion, anterior lumbar interbody fusion, posterior lumbar interbody fusion (PLIF), and combined PLIF and posterolateral fusion from 2000-2019. Reimbursement was adjusted to inflation utilizing the 2019 Consumer Price Index.

RESULTS

From 2000-2019, 1,266,942 lumbar fusion procedures were billed to Medicare Part B. Annual number of lumbar interbody fusion procedures increased by 57,740 procedures (+95%) from 61,017 in 2000 to 118,757 in 2019. This change in annual volume varied by procedure type, with posterolateral fusion increasing from 24,873 procedures in 2000 to 45,665 procedures in 2019 (+20,792, +83.59%), anterior lumbar interbody fusion increasing from 4227 in 2000 to 29,285 procedures in 2019 (+25,058, 592.81%), PLIF increasing from 5579 procedures in 2000 to 5628 procedures in 2019 (+49, +0.88%), and combined PLIF and posterolateral fusion increasing from 26,338 procedures in 2012 to 38,179 procedures in 2019 (+11,841, +44.96%). The mean inflation-adjusted reimbursement decreased for posterolateral fusion from $1662.96 to $1245.85 (-$417.11, -25.08%), anterior lumbar interbody fusion from $1159.45 to $750.33 (-$409.12, -35.29%), PLIF from $1225.02 to $1223.72 (-$1.3, -0.11%), and combined PLIF and posterolateral fusion from $1541.59 per procedure in 2012 to $1467.08 per procedure in 2019.

CONCLUSIONS

Lumbar fusions have increased in the last 2 decades, although reimbursement for all procedures has decreased. Knowledge of these trends is important to ensure adequate resource allocation to surgeons as treating lumbar pathologies becomes more common among the aging Medicare population.