State Disparities in Medicaid Versus Medicare Reimbursement for Hand Surgery

The purpose of the study was to compare the Medicaid and Medicare professional service reimbursement rates for a select group of hand surgery procedures.

Medicare rates for 26 common hand procedures were obtained from the Center for Medicare & Medicaid fee schedule database using Medicare Administrative Contractor localities to approximate state lines. Medicaid rates were found at each state Medicaid online fee schedule website. State rates were compared with corresponding Medicare rates using mean values and dollar differences. Each state's reimbursement values were also adjusted using the Medicare Wage Index, a relative scale comparing state wages with the national average, to account for regional wage differences. Variability between states and between procedures was analyzed using the coefficient of variation values.

Medicaid reimbursement was lower than that of Medicare for 22 of the 26 procedures included in the analysis. On average, Medicaid reimbursement rates were 18% lower than Medicare for the same procedure, a difference that increased to 29% when accounting for wage differences via the Medicare Wage Index. The coefficient of variation values were low across Medicare procedures, indicating low variability between states. The coefficient of variation values were much higher for Medicaid rates and increased when adjusted for state wage differences, indicating high variability between state Medicaid rates.

Professional fee reimbursement for select hand surgery procedures is substantially lower with Medicaid compared with Medicare, and there is a high degree of variability between states. Wage differences do not explain differences in state pricing.

Low Medicaid reimbursement for hand surgery procedures may have negative implications for health care access in some states. The wide variability in reimbursement between states is concerning, given that Medicaid is supported mostly by federal funding.