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.