Abstract
Background
While multiple studies have assessed the trends of Medicare reimbursement for orthopedic total joint arthroplasty (TJA) surgeries, none have forecasted reimbursement in relatable per-hour figures. The purposes of this study are to examine trends of reimbursement for primary and revision TJA and translate forecasted primary TJA reimbursement to relatable per-hour compensation.
Methods
The Center for Medicare and Medicaid Services reimbursement data from 1992 to 2024 were used to create a historical view of reimbursement for primary and revision TJA. All monetary values were converted to 2023 USD to account for inflation. Polynomial and linear forecast equations were used to predict the future of the TJA reimbursement to 2030. Relative Value Scale Update Committee standard times for procedures were used with the forecasts to establish per-hour rates.
Results
Total reimbursement for primary total hip arthroplasty/total knee arthroplasty is forecasted to decrease 85.36%/86.14% by 2030. Using prior trends in reimbursement, TJA procedures are predicted to reimburse at or less than $100.00 2023 USD per Medicare case by 2030. Moreover, TJA surgeons are forecasted to earn $13.93/h per primary total hip arthroplasty and $14.97/h per primary total knee arthroplasty by 2030.
Conclusions
This study highlights the concerning trends for both primary and revision arthroplasties as TJA surgeons are on a path to earn below minimum wage for primary TJAs by 2030. Mathematical models forecast a bleak future for orthopedic TJA reimbursement. This downward trajectory poses a risk to access and quality of care.
Keywords: Reimbursement, Total joint arthroplasty, Total knee arthroplasty, Total hip arthroplasty, Per-hour income, Medicare
Introduction
Over the last 31 years, the Center for Medicare and Medicaid Services (CMS) has been steadily reducing the reimbursement of various medical and surgical procedures. As of 2024, CMS has implemented a 3.37% cut to Medicare reimbursement across the medical field as a whole. These reductions are often touted as victories for physicians by lawmakers since they are less than the previously planned 8.5% decrease. Using a narrower focus, orthopedics has experienced more drastic cuts to both total and physician reimbursement than many other specialties [[1], [2], [3]]. Since 2009, Medicare has reduced its total spending on elective primary total joint replacement (TJA) by more than $1 billion annually [4]. From 2000 to 2015, orthopedic surgeons lost an average of 29% of their total reimbursement rates, with price per work relative value unit (wRVU) decreasing by an average of 39% [5]. In that same period, adult reconstruction physicians lost 39% and 45% of their reimbursements and wRVUs, respectively [5]. Moreover, current literature has predicted that orthopedic surgical work will be compensated at the same hourly rate as orthopedic clinical procedures as early as 2024 [6]. Given that these figures were made prior to the most recent CMS cuts, the outlook for orthopedic TJA reimbursement is concerning.
This history of decreasing Medicare reimbursement, combined with outpacing economic inflation, an already elevated level of burnout within the field of orthopedics, and the increasing size of the Medicare joint replacement patient population, poses a critical concern for the future of access to quality care [[7], [8], [9]]. Prior studies have examined historical rates of Medicare reimbursement over isolated periods of time. This study aims to (1) expand upon previous literature and predict the financial impact of The Center for Medicare and Medicaid Services (CMS) cuts into the year 2030 using established mathematical means of forecasting; (2) translate forecasted primary TJA reimbursement to per-hour compensation in 2023 US Dollars (USD), using Relative Value Scale Update Committee (RUC) standard times, such that the future financial sustainability of these procedures can be ascertained; (3) examine the reimbursement of Current Procedural Terminology (CPT) codes pertaining to revision TJA procedures and track their financial forecast out to 2030.
Material and methods
The CMS physician fee schedule lookup tool was used to capture the Medicare reimbursement rates, conversion factors, and wRVU from 2007 to 2030. The national payment amounts for the following CPT codes pertaining to primary and revision TJA were identified: 27130, 27440, 27132, 27134, 27137, 27138, 27486, 27487, 27488. These codes were chosen for their description of a primary TJA of any or all compartments, revision TJA of any or all components, and component swaps. Codes for irrigation and debridement procedures were excluded as no hardware is changed or revised in these procedures. A description of the CPT codes analyzed within this study can be found in Appendix 1. All values were then converted to 2023 USD using The Bureau of Labor Services Consumer Price Index (BLS CPI) calculator. The calculator was utilized in this study to directly convert the value of all reimbursement to 2023 USD to both provide a uniform standard of comparison and remove the confounding variable of inflation from past and future monetary values. The use of this calculator allows for reimbursement values from the past, as well as predictions from the future, to be directly comparable across years.
Physician-specific total reimbursement for all procedures was calculated from (wRVU × conversion factor) × (1 + CPI) using BLS CPI values adjusted for inflation to 2023 USD, with 2024 USD values being back-converted to 2023 USD to show how new cuts follow the predicted forecasts. Using this information, along with data from previous literature to serve as both a benchmark for comparison as well as a data point to improve the sampling of the predictive models, several forecast graphs were created showing the trend of Medicare global period reimbursement from the year 1992 to May 2030 [10].
Within each forecast graph, a third-order polynomial and/or linear trend line was fit to all the Medicare reimbursement timelines and extrapolated to 2030. Using this modeling system allows for prior reimbursement to not be under- or over-assumed and for all values, both current and past, to contribute accurate predictive power for future predictions. Linear forecasts are included on graphs, where clearly legible, to demonstrate this phenomenon. In data sets where points from as far back as 1992 were not available, such as physician-specific reimbursement, the third-order models were extended back to that time to show accurately predicted proportional changes compared to documented prior values such as those seen in the fee schedule figures. Revision timelines do not include linear forecasts as the graphs would not be able to show clear comparison between procedures with 2 forecasts per CPT code.
The R2 correlation constants were calculated for each timeline independently and displayed within the graph. The equations for the lines of best fit were also captured and used to find the predicted values for reimbursement through 2030. A per-hour income rate for primary procedures was calculated, using both the predictive models and literature-established RUC times, by plugging the number identifier (0-43) of the year in question into the predictive equation associated with the said procedure and dividing that outcome by (RUC time in min/60(min/hour)) [11]. These times were not calculated within this study and do not exist within other literature for any of the revision CPT codes analyzed herein. Therefore, we were unable to calculate the per-hour rate for revisions as there was no uniform standard for time.
Results
Using the forecasting equations, Medicare primary and revision TJA global periods will be reimbursed at or less than $100.00 2023 USD by the year 2029/2030. The correlation constants derived from these trendline equations were all greater than 0.9619, with the linear trends being greater than 0.82 (Appendix 2).
Primary procedures
The total reimbursement, according to Medicare facility fee schedules and prior literature, of primary total hip arthroplasty (THA) and total knee arthroplasty (TKA) have decreased 66.67% and 68.86% since 1992, respectively [10]. The data fit the third-order polynomial trendline with a correlation constant of 0.9619 and 0.9646 for primary THA and primary TKA, respectively. The corresponding linear trend lines had correlation coefficients of 0.8239 and 0.864 for primary THA/TKA, respectively. The third-order system predicted total reimbursement decreases of 85.36% and 86.14% for THA and TKA, respectively, by 2030 (Figs. 1 and 2). The physician-specific reimbursement, which has not been previously examined, for Medicare primary THA decreased 48.90% since 2007, while TKA reimbursement declined 52.07% (Figs. 3 and 4). Overall, when compared to literature reports in 2015, Medicare reimbursement for primary TJA has decreased, on average, an additional 14.19%, equating to an additional 1.77% average loss in reimbursement per year [5]. When looking at literature reports from 1992, the average loss per year has equated to 2.12% [10].
Figure 1.
Medicare trends for primary THA from 1992 to present (2024).
Figure 2.
Medicare trends for primary TKA from 1992 to present (2024).
Figure 3.
Surgeon reimbursement forecast for primary THA.
Figure 4.
Surgeon reimbursement forecast for primary TKA.
For primary TJAs by the year 2030, it is predicted that surgeons will be earning $93.78/$101.55 for the entire global period of Medicare primary THA/TKA when adjusted to 2023 USD (Figs. 3 and 4). Applying the RUC standard times of 404 minutes for THAs and 407 minutes for TKAs with these predicted physician reimbursements, the projected per-hour income rates were $13.93 for THAs and $14.97 for TKAs in 2023 USD [11].
Revision procedures
From 2007 to 2024, Medicare revision THA and TKA saw a corresponding average decline of 43.30% and 43.13%, respectively (Figs. 5 and 6), equating to a 2.54% average loss per year. When examining the mathematical forecasts, all correlation constants were greater than 0.9699. Moreover, revision procedure codes could earn less than the equivalent of $200 2023 USD for the Medicare global period by the year 2029 and are expected to cost the surgeon money, when equated to 2023 USD, as early as 2030. Compared to previous literature, which described an average decline of 27.39% for rTHA from 2002 to 2019, this study has shown an additional average decline of 26.33% across all CPT codes examined from 2019 to 2024 [12]. Conversely, literature from the same time period showed an average decline of 24.52% in rTKA reimbursement while this study has shown an additional average decline of 26.33% for all CPT codes included since 2019 [13]. This decline equates to an average additional loss of 5.266% per year since last reporting.
Figure 5.
Surgeon reimbursement forecast for revision THA.
Figure 6.
Surgeon reimbursement forecast for revision TKA.
Discussion
This study demonstrated severe decreases in Medicare reimbursement for orthopedic adult reconstruction surgeons from 1992 to 2024 and Medicare direct physician reimbursement for primary and revision TJAs from 2007 to 2024. The forecasts created in this study predict further decreases for Medicare primary THAs and TKAs through 2030, which culminates in the prediction that Medicare physician reimbursement of primary TJAs could fall below a total of $200 in 2023 USD as early as 2028/2029. By 2030, Medicare reimbursements are projected at $93.78 for primary THAs and $101.55 for TKAs in 2023 USD. Using RUC standard times for patient care, the predicted hourly income rate of primary THA and TKA are less than the $15/h minimum hourly wage currently adopted by many states. For comparison, current publicly advertised travel nursing per-hour income is $87.97 [14]. Given the wide array of indications and perioperative monitoring required in revision settings, there is no established total global time standard for revision TJAs, so a per-hour income rate cannot be established using the models described in this study. It can be inferred, however, that due to the increased surgical and medical complexity of revision TJA care, the per-hour income rates for these procedures would be less than those of their primary counterparts.
These figures highlight a growing discrepancy between public perception of orthopedic reimbursement and reality, with studies showing patients viewing THA reimbursement as being 26 times greater than it truly is [15]. To date, few studies have attempted to quantify the entirety of work that goes into a full episode of care for a Medicare TJA patient and relate that work into a widely relatable metric such as per-hour income. Given the projected overall and per-hour income per Medicare TJA global period described in this study, concerns arise as to the ability for the field adult reconstruction to attract future surgeons to pursue this training. As of 2020, the only orthopedic fellowship that provided a net-positive impact on future earnings was spine, with adult reconstruction being net neutral [16]. These bleak forecasts for the financial landscape of adult reconstruction may shift talent to other orthopedic subspecialties or away from orthopedic surgery completely. Furthermore, prior studies were conducted before the extraordinary levels of inflation that the US economy has experienced since 2020, so the financial outlook for adult reconstruction has likely worsened further.
Ultimately, the greatest concern these predictions raise is the sustainability of access to quality primary and revision arthroplasty care going forward. Current literature predicts that primary TJAs will increase in incidence by as much as 71%-84.9% with revisions flowing suit by as much as 70%-182% by 2030 [7,9]. Moreover, as of 2020, it was reported that over 60% of all TJA procedures utilized Medicare as the primary payer, with that percentage expected to increase with the expected increase in average age of the US population [7,11]. The failure to meet this demand will only result in patients losing access to TJAs, which have been shown throughout literature to provide some of the greatest improvements to overall quality of life [[17], [18], [19], [20]]. Similarly, revision TJA are complex and often require highly trained reconstruction specialists to accept and perform these challenging surgeries.
The limitations of this study are that the forecasts of this study are based on 32 years of prior CMS financial data, and future trends can only be predicted using current data and policies. CMS reimbursement cuts proposed year to year change substantially and limit the accuracy of the mathematical forecasts provided herein. These past trends, however, are unsustainable and worthy of focus as they pertain to what could come. Moreover, while these past trends themselves do not affect future possible outcomes, they provide valuable insights as to a pattern or behavior. The healthcare/healthcare insurance industry, geo-political landscape, and economical welfare all have the potential for significant change in the future, which can drastically alter current predictions. Regardless, the current trends do not appear favorable for the primary stakeholders: the surgeon and patient. Industry leaders and politicians should consider the downstream impact of further reimbursement cuts in primary and revision TJA.
Conclusions
In conclusion, the downward trend in physician reimbursement for orthopedic TJA procedures continues to be alarming [1,[4], [5], [6],10,[21], [22], [23], [24], [25]]. We forecast that as early as 2030, orthopedic surgeons will be reimbursed $13.93/h for primary THA and $14.97/h for primary TKA (in 2023 USD). Without any corrections to these trends, there are significant risks to access to quality TJA care going forward [6,21,22,[26], [27], [28], [29]]. It is our hope that this study serves as a reference for decision makers and stakeholders when evaluating Medicare reimbursement and the future of TJA care as a whole. As time progresses, further studies will be required to re-evaluate these trends and consider the implications.
Funding
This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.
Conflicts of interests
The authors declare there are no conflicts of interest.
For full disclosure statements refer to https://doi.org/10.1016/j.artd.2024.101434.
CRediT authorship contribution statement
Evan Catton: Writing – review & editing, Writing – original draft, Visualization, Validation, Methodology, Investigation, Formal analysis, Data curation, Conceptualization. Alan Puddy: Writing – review & editing, Validation, Supervision, Methodology, Investigation, Data curation. Vineet Tyagi: Validation, Methodology, Investigation, Data curation. Gregory M. Kurkis: Validation, Methodology, Investigation, Data curation. David N. Shau: Writing – review & editing, Supervision, Methodology, Investigation, Formal analysis, Data curation, Conceptualization.
Appendix A. Supplementary Data
Appendix
Appendix 1.
Analyzed CPT codes
| CPT code | Description | wRVU for 2023 |
|---|---|---|
| 27130 | Arthroplasty, acetabular, and proximal femoral prosthetic replacement (total hip arthroplasty), with or without autograft or allograft | 19.60 |
| 27447 | Arthroplasty, knee, condyle, and plateau; medial and lateral compartments with or without patella resurfacing (total knee arthroplasty) | 19.60 |
| 27132 | Conversion of previous hip surgery to total hip arthroplasty, with or without autograft or allograft | 25.69 |
| 27134 | Revision of total hip arthroplasty; both components, with or without autograft or allograft | 30.28 |
| 27137 | Revision of total hip arthroplasty; acetabular component only, with or without autograft or allograft | 22.70 |
| 27138 | Revision of total hip arthroplasty; femoral component only, with or without allograft | 23.70 |
| 27486 | Revision of total knee arthroplasty, with or without allograft; 1 component | 21.12 |
| 27487 | Revision of total knee arthroplasty, with or without allograft; femoral and entire tibial component | 27.11 |
| 27488 | Removal of prosthesis, including total knee prosthesis, methylmethacrylate with or without insertion of spacer, knee | 17.60 |
Appendix 2.
Trendline equations and correlation constants
| CPT code | Trend line equation | R2 constant |
|---|---|---|
| 27130 Facility | y = −0.1264x3 + 8.9754x2 − 233.96x + 4052.8 | 0.9619 |
| 27130 Facility Linear | y = −53.113x + 3197.7 | 0.8239 |
| 27130 | y = −0.1562x3 + 11.956x2 − 319.58x + 3872.3 | 0.9802 |
| 27130 Linear | y = −23.195x + 1569.1 | 0.9274 |
| 27447 Facility | y = −0.1143x3 + 8.2507x2 − 230.69x + 4296.9 | 0.9646 |
| 27447 Facility Linear | y = −61.477x + 3476.3 | 0.864 |
| 27447 | y = −0.1066x3 + 8.1758x2 − 229.22x + 3316.4 | 0.9788 |
| 27447 Linear | y = −28.232x + 1735.3 | 0.9619 |
| 27132 | y = −0.232x3 + 12.503x2 − 229.6x + 2611.9 | 0.9707 |
| 27134 | y = −0.2759x3 + 14.905x2 − 274.26x + 3103.9 | 0.9713 |
| 27137 | y = −0.2759x3 + 14.905x2 − 274.26x + 3103.9 | 0.9709 |
| 27138 | y = −0.215x3 + 11.602x2 − 213.28x + 2419.8 | 0.9710 |
| 27486 | y = −0.1896x3 + 10.209x2 − 187.25x + 2136.8 | 0.9703 |
| 27487 | y = −0.215x3 + 11.602x2 − 213.28x + 2419.8 | 0.9708 |
| 27488 | y = −0.1896x3 + 10.209x2 − 187.25x + 2136.8 | 0.9699 |
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