Trends in shoulder and elbow procedures: declining inflation-adjusted Medicare reimbursement for hospitalizations

As the utilization of shoulder and elbow procedures increases, it is not clear whether the hospital reimbursement for these cases has proportionally increased in the United States. This study investigated trends in reimbursement for shoulder and elbow hospitalizations.

The Centers for Medicare and Medicaid Services Inpatient Utilization and Payment Public Use Files from 2015 to 2022 were retrospectively queried for all diagnosis-related groups (DRGs) (483, 507, 508, 510, 511, and 512) related to shoulder and elbow procedures, including primary and revision upper extremity arthroplasty cases. After adjusting for inflation to 2022 US dollars with the US Consumer Price Index, the mean, median, and standard deviation of the Medicare payments were determined to analyze the total number of procedures performed each year and over the study period. These same calculations were also performed for the submitted charges by hospital for the reported hospital expenses. A multiple linear mixed-model regression analysis and an analysis of covariance were performed to assess the change in reimbursement and charges over time for each code and the proportional rate of change between codes, respectively.

The inflation-adjusted average Medicare payment for DRG 483 per procedure decreased by $1295.57 (-7.2%) from $17,874.69 in 2015 to $16,579.12 in 2022. The inflation-adjusted average submitted charge for DRG 483 per procedure increased by $16,453.29 (19.1%) from $86,314.46 in 2015 to $102,767.76 in 2022. The inflation-adjusted Medicare payments for DRG 483 significantly decreased year-over-year over the study period (P < .001), showing consistent declines across years relative to the reference year.

The decrease in reimbursement for DRG 483, including revision upper extremity arthroplasty procedures, shows that fewer resources have been allocated for shoulder and elbow hospitalizations. These results necessitate further examination of Medicare payment algorithms to accurately account for case complexity in allocating fair reimbursement to hospitals for upper extremity procedures.