Mark-Up Trends in Contemporary Medicare Primary and Revision Total Joint Arthroplasty

Understanding mark-up ratios (MRs), the ratio between a healthcare institution's submitted charge and the Medicare payment received, for high-volume orthopaedic procedures is imperative to inform policy about price transparency and reducing surprise billing. This analysis examined the MRs for primary and revision total hip and knee arthroplasty (THA and TKA) services to Medicare beneficiaries between 2013 and 2019 across healthcare settings and geographic regions.

A large dataset was queried for all THA and TKA procedures performed by orthopaedic surgeons between 2013 and 2019, using Healthcare Common Procedure Coding System (HCPCS) codes for the most frequently used services. Yearly MRs, service counts, average submitted charges, average allowed payments, and average Medicare payments were analyzed. Trends in MRs were assessed. We evaluated 9 THA HCPCS codes, averaging 159,297 procedures a year provided by a mean of 5,330 surgeons. We evaluated 6 TKA HCPCS codes, averaging 290,244 procedures a year provided by a mean of 7,308 surgeons.

For knee arthroplasty procedures, a decrease was noted for HCPCS code 27438 (patellar arthroplasty with prosthesis) over the study period (8.30 to 6.62; P = .016) and HCPCS code 27447 (TKA) had the highest median (interquartile range [IQR]) MR (4.73 [3.64 to 6.30]). For revision knee procedures, the highest median (IQR) MR was for HCPCS code 27488 (removal of knee prosthesis; 6.12 [3.83-8.22]). While no trends were noted for both primary and revision hip arthroplasty, median (IQR) MRs in 2019 for primary hip procedures ranged from 3.83 (hemiarthroplasty) to 5.06 (conversion of previous hip surgery to THA) and HCPCS code 27130 (total hip arthroplasty) had a median (IQR) MR of 4.66 (3.58-6.44). For revision hip procedures, MRs ranged from 3.79 (open treatment of femoral fracture or prosthetic arthroplasty) to 6.10 (revision of THA femoral component). Wisconsin had the highest median MR by state (>9) for primary knee, revision knee, and primary hip procedures.

The MRs for primary and revision THA and TKA procedures were strikingly high, as compared to nonorthopaedic procedures. These findings represent high levels of excess charges billed, which may pose serious financial burdens to patients and must be taken into consideration in future policy discussions to avoid price inflation.