The Near-Term Ramifications of Long-Term Trends in Orthopedic Surgical Reimbursement

Abstract

Background: There has been 25-year trend of decreasing value for orthopedic surgical work based on the Resource-Based Relative Value Scale (RBRVS) for Medicare reimbursement. This study was undertaken to estimate the time that Medicare payment rates for time spent in the office doing cognitive work will equal time dedicated in the operating room to performing procedural work based on long-term negative payment trends.

Methods: The RBRVS Update Committee database was accessed to extract the time elements for 2 procedures, total knee arthroplasty and total hip arthroplasty (27447 and 27130), on the day of surgery. The evaluation and management code mix for 2 mid-sized orthopedic practice was averaged to create an amalgamated rate for the reimbursement of office work on an hourly rate. A graph of the 25-year trend line in Medicare reimbursement for arthroplasty procedures was used to create a trend line. The trend line was then extrapolated to estimate the time in the future that the hourly rate for office work would equal the hourly rate for surgery.

Results: Time inputs and the Medicare conversion factor for 2021 were used in this analysis. Total procedural time for both 27447 and 27130 was 204 minutes (3.4 hours) on the day of surgery. An amalgamated hourly office rate of 7.9 relative value unit was calculated from the average of the 2 mid-sized private practices for an overall in office Medicare reimbursement of $318.89/h, with $1083.04 for the 3.4 hours allowed in the RBRVS Update Committee database for a joint replacement. When the trend line for reimbursement was extrapolated to the $1083.04 price point, the year corresponding to the point where hourly office reimbursement would equal hourly surgical work was 2024.

Conclusion: Policymakers in Washington and practicing orthopedic surgeons need to consider the looming economic parity of surgical and cognitive work for Medicare. Continued negative reimbursement rates are likely to decrease patient access to necessary surgical care and result in de facto rationing of arthroplasty services for Medicare patients. The deployment of the orthopedic workforce is likely to change to accommodate the decreases in the value of surgical work. This trend will have significant impact on the practice of musculoskeletal medicine and patient access to orthopedic services.

Keywords: Medicare; RBRVS; arthroplasty; health policy; reimbursement.