Declining Reimbursement or Runaway Charges? Medicare Payment for Distal Radius Fixation

Suresh K Nayar, MD1, Adi Wollstein, MD2, Majd Marrache, MD2, Matthew J Best, MD2, Keith T Aziz, MD3, Aviram M Giladi, MD, MS4 and Dawn M. Laporte, MD5, (1)Johns Hopkins University, Baltimore, MD, (2)Johns Hopkins Hospital, Baltimore, MD, (3)Johns Hopkins University School of Medicine, Baltimore, MD, (4)The Curtis National Hand Center, Baltimore, MD, (5)Orthopaedics, Johns Hopkins Hospital, Baltimore, MD

Introduction

Distal radius fractures (DRF) are the second most common fracture experienced by the elderly and as a result, surgical management constitutes a sizeable portion of Medicare expenditure for upper extremity surgery. With concerns for recent declines in Medicare reimbursement across orthopaedic surgery, physicians and practices are pressured to maintain revenue goals which may inadvertently result in higher patient charges. Using Medicare’s Physician Fee Schedules from 2012 to 2017, our primary aim was to describe temporal changes in physician payment for DRF fixation. We hypothesized that physician payment has decreased, resulting in overall lower reimbursement.

Methods

We examined actual submitted charges and surgeon payments from 2012 to 2017 for four DRF surgical CPT codes: closed reduction percutaneous pinning (CRPP) (25606), open reduction internal fixation (ORIF) of extra-articular fractures (25607), ORIF of intra-articular (IA) (<2 fragments) fractures (25608), and ORIF of IA (>3 fragment) fractures (25609). Reimbursement was defined and calculated as the ratio of submitted charges to Medicare payment. Growth rates of charges and payment were adjusted for inflation using annual consumer-price-index inflation rates.

Results

During this period, the number of CRPP cases fell 47% while ORIF has increased by 17%, 13%, and 45% for codes 25607, 25608, and 25609, respectively. From 2012 to 2017, reimbursement rates declined from 3.0 to 4.4% for each procedure. However, contrary to our hypothesis, after adjusting for inflation using year-to-year consumer price indices, Medicare payment to physicians has actually increased by ≥ 18% for all procedures except for CRPP, which had a s1% decline (Table 1). Submitted charges during this same period increased from 14 to 42%.

Conclusion

While reimbursement is technically falling, it is due to the asymmetric growth of charges which have outpaced surgeon payment. The absolute amount physicians receive is increasing at a rate that outpaces inflation by as high as 21% for ORIF of both EA and IA (>3 fragment) fractures. In summary, declines in reimbursement may be more closely tied to an increase in submitted charges as opposed to actual decreases in surgeon payment (Figure 1), suggesting that reimbursement (charge-to-payment ratio) may be an inaccurate metric to gauge compensation. Further, this study highlights the need to adopt cost-saving measures to curtail increased patient charges.

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