Rising Costs and Diminishing Surgeon Reimbursement From Primary to Revision Total Hip and Knee Arthroplasty: An Analysis of Medicare Advantage and Commercial Insurance

Abstract

Background: Revision total joint arthroplasty (rTJA) is a resource-intensive procedure addressing failed primary total joint hip (total hip arthroplasty [THA]) and knee arthroplasty (total knee arthroplasty [TKA]). Despite predictions of increased demand, reimbursement for rTJA has not kept pace with increasing costs and may be insufficient compared with primary procedures. The study aimed to highlight the diminishing surgeon reimbursement between primary and revision THA (rTHA) and TKA. Methods: This study is a retrospective analysis of billing data for primary and rTHA and TKA procedures from a single institution between 2019 and 2022. Insurance claims and charges data were provided by a local affiliate of a major national carrier which includes Medicare Advantage (MA) and commercial patients. Using insurance data, the study evaluates the total surgery costs for primary and rTHA and TKA and the individual charges that make up the total surgery cost. Results: Nine hundred five patients insured by the same carrier, who underwent a primary or rTJA, were identified. Irrespective of MA or commercial insurance, the average surgery cost for a primary THA was $26,043, compared with $53,456 for rTHA. Surgeon reimbursement for primary THA was 20% ($5,323) of the total surgery cost. Despite the doubled surgery cost for rTHA, surgeon reimbursement was 10% ($5,257) of the total surgery cost. Primary TKA surgery costs were $24,489, while revision costs were $43,074. Surgeon reimbursement for primary TKA was 20% ($4,918) of the total surgery cost, while reimbursement for revision TKA was 13% ($5,560). MA reimbursement was markedly lower than commercial reimbursement for primary and revision cases. Conclusion: Despite the higher total costs for rTJA, surgeon reimbursement is disproportionately diminished. The findings highlight the lack of incentive for revision cases. Surgeon reimbursement from MA and commercially insured patients for rTJA remains inadequate. This may limit patient access-to-care, leading to suboptimal outcomes and increased healthcare utilization.