Differences in Medicare payment and practice characteristics for orthopedic surgery subspecialties

Abstract

Background

Medicare payment, practice, and patient characteristics give perspective on the lifestyle, challenges, and attractiveness unique to each orthopedic surgery subspecialty. Changes to Medicare reimbursement may also affect health care delivery, warranting policy change. We analyzed differences in orthopedic surgery subspecialty characteristics and Medicare payments.

Methods

The Centers for Medicare and Medicaid Services data set was filtered by Current Procedural Terminology (CPT) codes unique to each orthopedic surgery subspecialty in 2019. After filtering by unique CPT codes, 100 randomized physicians were validated for each subspecialty: adult reconstruction and arthroplasty, trauma, sports medicine, hand surgery, shoulder and elbow surgery, foot and ankle surgery, and spine surgery. Data gathered included unique procedural codes, number of beneficiaries, services provided, and the total Medicare allowed amount. Differences were assessed with post hoc tests. Subspecialty changes in Medicare payment were assessed using the Physician Fee Schedule and compared using a single-factor analysis of variance.

Results

On average, hand surgery recorded the most unique CPT codes (106) and the highest volume of beneficiaries (571). Adult reconstruction and arthroplasty had the fewest unique codes (60) and the greatest total Medicare payment ($328,000). Spine surgery had the lowest number of beneficiaries (387) and lowest number of services provided (1752). Lastly, sports medicine provided the largest volume of services (4221). Mean total codes, unique codes, and total patients differed between subspecialties. Varying differences in average Medicare payment, total billed codes, total unique codes, total patients, patient race, patient age, patient sex, and patient health were found for all orthopedic surgery subspecialties in 2019.

Conclusions

These data may illustrate financial incentives for orthopedic surgery residents to pursue certain subspecialties.

Medicare is the government-managed health insurance program in the USA that was established in 1965. This program provides health insurance for the elderly or disabled population in the United States, and the sister program Medicaid provides health insurance for low-income citizens. These programs are governed by the Centers for Medicare and Medicaid Services. The Medicare program is currently insuring nearly 15% of the US population, and that number is projected to increase significantly due to the aging US population.¹

Medicare payments have a significant impact on nearly all physicians. Though some physicians do not see a large proportion of elderly patients, many physicians receive payment from a combination of Medicare, Medicaid, and private health insurance companies. Many private health insurance companies use Medicare reimbursement rates as a guide for their own reimbursement rates. Though regional variation in reimbursement rates exists in the USA, there remains a significant relationship between private insurance reimbursement and Medicare reimbursement rates.^2,3

Medicare reimbursement rates are primarily determined by the Relative Value Scale Update Committee. This committee, comprising physicians, administrators, and government officials, examines a variety of factors when adjusting Medicare reimbursement rates, including difficulty of procedures, patient satisfaction, and regional variance.⁴ Although this committee was designed to equalize Medicare payments across the country, some studies have suggested that the Relative Value Scale Update Committee undervalues many procedures, particularly orthopedic surgery procedures.^4,5

Current data indicate that Medicare reimbursement for many orthopedic surgery subspecialties has decreased since 2000. Orthopedic foot and ankle surgery reimbursement decreased by nearly 30% from 2000 to 2020.⁶ Orthopedic sports surgery Medicare reimbursement decreased by 33% from 2000 to 2020.⁷ Orthopedic trauma surgery also incurred a 30% decrease in Medicare reimbursement in the same 20-year time frame.⁸ Upper-extremity surgical procedure Medicare reimbursement also decreased by 29% since 2000. Regional variation within the USA was also observed in this change in reimbursement, with Northeastern states seeing the largest decrease in reimbursement.⁹ Reimbursement for total adult reconstruction and arthroplasty decreased by 38.9% from 2000 to 2019. This is the largest decrease in reimbursement for an orthopedic surgery subspecialty. However, unicompartmental knee arthroplasties had a 16% increase in reimbursement across the study time frame. These data suggest that policymakers favor some procedures at the expense of other procedures when determining reimbursement rates.¹⁰ After adjusting for inflation, Medicare reimbursement for spine procedures has steadily decreased from 2000 to 2021. The average decrease across all spine procedures was 33%.¹¹ Orthopedic oncology saw a 13% decrease in inflation-adjusted Medicare reimbursement from 2000 to 2020. This study examined only 38 procedures; however, there were significantly lower reimbursement rates for metastatic management when compared to pelvic and spinal oncological procedures.¹²

The decrease in Medicare reimbursement rates observed for many orthopedic surgery subspecialties presents a concerning trend for orthopedic surgeons and illustrates a need for continued physician advocacy to protect patient access to orthopedic surgery services. To the authors’ knowledge, this is the first article to examine the financial impact of varying Medicare reimbursement per beneficiary and per procedure among orthopedic surgery subspecialties.

Due to the impact of insurance reimbursement on orthopedic surgeons, Medicare payments give perspective on the lifestyle, challenges, and attractiveness unique to each orthopedic surgery subspecialty. This analysis provides insight into the financial appeal of each subspecialty and can be used as a framework for resident physicians to understand the financial implications of selecting certain orthopedic surgery subspecialties.

Methods

The Centers for Medicare and Medicaid Services Medicare Physician and Other Practitioners—by Provider and Service data set was filtered by Current Procedural Terminology (CPT) codes unique to each orthopedic surgery subspecialty in 2019. After filtering by unique CPT codes, 100 randomized physicians for each subspecialty were chosen via a Microsoft Excel randomization algorithm and validated using US News and World Report. The orthopedic subspecialties included adult reconstruction and arthroplasty, trauma, sports medicine, hand surgery, shoulder and elbow surgery, foot and ankle surgery, and spine surgery. Data gathered included the number of unique procedural codes, number of beneficiaries, number of services provided, and the total Medicare allowed amount.

Characteristic differences were assessed with post hoc tests (α = 0.05). Subspecialty changes in Medicare payment were assessed using the Physician Fee Schedule and compared using a single-factor analysis of variance.

Results

For 2019, 700 subspecialists were analyzed, with 100 physicians for each orthopedic surgery subspecialty. On average, hand surgery recorded the most unique procedural codes (106) and the highest volume of beneficiaries (571). Adult reconstruction and arthroplasty had the fewest unique codes (60) and the greatest total Medicare payment ($328,000). Spine surgery had the lowest number of beneficiaries (387) and lowest number of services provided (1752). Lastly, sports medicine provided the largest volume of services (4221). Mean total codes, unique codes, and total patients differed between subspecialties (P < 0.05).

When comparing volume of beneficiaries, hand surgeons (570.51) and shoulder and elbow surgeons (517.6) saw the greatest number of beneficiaries. Spine surgeons saw the fewest unique patients (387.3). All values for beneficiaries seen were significantly different between all specialties following analysis of variance. Foot and ankle surgery (109.8) billed the most unique codes, and adult reconstruction and arthroplasty (60.13) billed the fewest unique codes. All subspecialties showed significant variance in unique CPT codes with the exception of sports medicine and shoulder and elbow surgery. Sports medicine (4221.7) and shoulder and elbow surgery (4235.6) provided the most unique services when compared to the other specialties. These specialties had significantly more services than the other subspecialties; however, they did not differ significantly from each other (Table 1).

Table 1.

Medicare practice characteristic data reported for orthopedic surgery subspecialties, 2019

Subspecialty	Beneficiaries	Unique procedural codes	Services provided
Trauma	466.22*	98.4*	3637*
Sports medicine	529*	75.3	4221.7
Spine	387.3*	64.9*	1752.9*
Shoulder and elbow	517.6*	75.7	4235.6
Hand	570.51*	105.9*	3543.4*
Foot and ankle	458.4*	109.8*	2130.1*
Adult reconstruction and arthroplasty	482.4*	60.13*	3961.1*

*Significant difference from all other subspecialties (P < 0.05).

We also gathered data on total Medicare reimbursement, reimbursement per service provided, and reimbursement per beneficiary for each of the selected orthopedic surgery subspecialties (Table 2). Many of the orthopedic surgery subspecialties had significant variance in these values. When comparing total Medicare reimbursement, adult reconstruction and arthroplasty ($328,888) had the highest total Medicare payment, and foot and ankle surgery ($196,549) had the lowest reimbursement. All subspecialties varied significantly from each other in total Medicare payment. Spine surgery ($212.58) had the highest Medicare reimbursement per service, and hand surgery ($94.20) had the lowest value. With the exception of sports medicine and foot and ankle surgery, all other subspecialties varied significantly in payment per service. Spine surgery ($834.73) had the highest average Medicare reimbursement per beneficiary, and foot and ankle surgery ($439.98) had the lowest value for Medicare reimbursement per beneficiary. All of the values varied significantly for reimbursement per beneficiary except for trauma and adult reconstruction and arthroplasty, which were significantly different from all specialties except each other.

Table 2.

Medicare reimbursement data reported for orthopedic surgery subspecialties, 2019

Subspecialty	Total Medicare payment	Payment per service	Payment per beneficiary
Trauma	$263,600*	$163.29*	$605.03
Sports medicine	$314,085*	$103.30	$581.12*
Spine	$287,284*	$212.58*	$834.73*
Shoulder and elbow	$300,466*	$161.81*	$562.60*
Hand	$289,449*	$94.20*	$499.71*
Foot and ankle	$196,549*	$103.72	$439.98*
Adult reconstruction and arthroplasty	$328,888*	$172.63*	$605.84

*Significant difference from all other subspecialties (P < 0.05).

Discussion

There are significant differences in practice characteristics and Medicare reimbursement between many of the orthopedic surgery subspecialties. Hand surgeons saw the most patients and spine surgeons saw the fewest patients. Based on these data, physicians who wish to see a larger volume of patients may pursue specialties such as hand surgery or sports medicine.

When comparing numbers of unique CPT codes, which is related to numbers of unique procedures, hand surgery and foot and ankle surgery performed the most unique procedures. Spine surgery and adult reconstruction and arthroplasty performed the lowest number of unique procedures. These data suggest that trainees with a desire to perform a wide range of procedures should pursue foot and ankle surgery. The data are similar to the number of services provided. Residents interested in performing high volumes of surgery should pursue sports medicine or shoulder and elbow surgery.

The data indicate that spine surgeons are reimbursed at a higher rate per patient and per service when compared to the other orthopedic surgery subspecialties. There may be financial incentives to pursue spine surgery, because spine surgeons require fewer patients and fewer services to achieve equivalent reimbursement when compared to hand surgeons. However, adult reconstruction and arthroplasty received the highest total Medicare payment, suggesting a possible financial incentive to pursue this subspecialty.

We accessed the Medical Group Management Association to gain insight into total physician compensation. They provided data on collections to work relative value units from the 2024 report based on 2023 data. The data included general orthopedics at $75.35, orthopedic trauma at $82.89, adult reconstruction and arthroplasty at $95.27, spine at $100.48, hand at $122.61, and sports surgery at $126.26.¹³ In contrast, our analysis found that spine surgery had the highest reimbursement per service. These data in connection with our analysis indicate a need for further research that incorporates private insurance company data sets to more fully clarify the relationship between subspecialty choice and revenue generated in orthopedic surgery.

We recognize that many factors influence an orthopedic surgery resident’s subspecialty choice. Various studies have examined reasons for choosing subspecialties with varying results. The most common reasons for choosing a subspecialty include mentorship, lifestyle, and personal interests.^14–16 These same sources indicated that men and women also gravitate toward different subspecialties in orthopedic surgery. Our analysis indicates some of the financial and practice characteristic incentives to choosing various subspecialties that play a role in choice but are not the determining factor in subspecialty choice.

Specialty choice in orthopedic surgery is influenced by a range of factors, including personal considerations such as location preferences, lifestyle goals, and interest in a specific field. Mentorship and clinical exposure play a key role in shaping these decisions by providing insights into various specialties. Practical factors such as the level of competition, on-call demands, and anticipated remuneration also impact applicants’ decisions. This study aimed to provide applicants with evidence-based insights to assist in their specialty selection process.

The primary limitation in this study was the lack of data from private insurance companies. Though multiple studies indicate that private insurance companies follow Medicare reimbursement,^2,3 variation between companies could impact the data. In addition, some specialties see a much higher volume of Medicare patients, such as adult reconstruction and arthroplasty, whereas other specialties see very few Medicare beneficiaries, such as sports surgery. These differences have an impact on total Medicare payment, and therefore the total Medicare payment may not be an accurate reflection of expected income for a given orthopedic surgery subspecialty.

In conclusion, this study analyzed orthopedic surgery subspecialties’ differences in payment, practice, and patient characteristics with Centers for Medicare and Medicaid Services data for 2019. Varying differences in average Medicare payment, total billed codes, total unique codes, total patients, patient race, patient age, patient sex, and patient health were found for all orthopedic surgery subspecialties. These data may illustrate financial or practice-based incentives for orthopedic surgery residents to pursue certain subspecialties, though these are not the only factors that influence subspecialty choice.

Disclosure statement/Funding

The authors report no funding or conflicts of interest.