Regional Variation of Medicare Payments for Hand Surgery Procedures in the United States

Background: Medicare reimbursement payments for inpatient orthopedic surgeries, such as total joint arthroplasty and spinal fusion, have been shown to exhibit geographic variation. We seek to evaluate whether similar geographic variations exist in Medicare reimbursement payments for outpatient hand surgeries. Methods: We analyzed 2012 and 2013 Medicare Provider Utilization and Payment Data provided by Centers for Medicare & Medicaid Services (CMS) to evaluate average allowed charges and reimbursement payments for the four most common hand surgeries performed across the country. Results: Open carpal tunnel surgery was the most commonly performed outpatient Medicare hand procedure (n= 21,944), followed by trigger finger release (n= 15,345), endoscopic carpal tunnel surgery (n = 7,106), and basal joint arthroplasty/LRTI (n= 2,408). In terms of dollars per procedure, institutions received the highest Medicare reimbursement payments for basal joint arthroplasty ($613), followed by endoscopic carpal tunnel surgery ($363), open carpal tunnel ($295), and trigger finger release ($195). Open Carpal tunnel, trigger finger release, and endoscopic carpal tunnel surgery showed statistically significant variation across geographic regions for both allowed charges and reimbursement. Institutions in the West and Northeast on average had the highest charges and received the highest payments for the surgeries, while hospitals in the South and Midwest generally charged the least and received the lowest payments (Table 1). The percent reimbursement throughout the regions and surgeries remained similar with rates between 77-79% (Table 2). Conclusion: Similar to Medicare payment trends in total joint arthroplasty and spinal fusion, hand surgery payments exhibit statistically significant variation across geographic regions. Further research must be done to determine why these regional variations exist and whether cost of living is the primary explanation for these disparities. Tables/Figures: Table 1: Average Charges and Medicare Payments for Outpatient Hand Surgeries