Medicaid reimbursement for shoulder arthroplasty procedures is substantially lower than Medicare and decreasing when adjusted for inflation

Shoulder arthroplasty utilization has grown significantly in the United States, driven by an aging population and the success of reverse total shoulder arthroplasty procedures. Despite this, Medicare (MCR) reimbursement for these procedures sharply declined over the past several decades. Medicaid (MCD) reimbursement is more difficult to ascertain due to the decentralized nature of state fee schedules. This study aimed to compare current MCD rates to 2024 MCR rates for primary and revision shoulder arthroplasty procedures.

We analyzed 4 Current Procedural Terminology codes representing primary and revision shoulder arthroplasty. MCD rates were obtained from state fee schedules online and adjusted using the Medicare Wage Index to study the effect of wage differences throughout the country. MCR rates were collected from the Centers for Medicare & Medicaid Services Physician Fee Schedule. These rates were compared to each other using national and state averages, dollar differences with and without adjustment for work Relative Value Units, and coefficient of variability values. Two primary shoulder arthroplasty codes were compared to a 2020 study using unadjusted and inflation-adjusted percentage differences.

Current MCD reimbursement for shoulder arthroplasty procedures was 13.1% lower than MCR on average. This difference increased to 24.6% when adjusting for wage differences. Reimbursement varied between 46% and 135% of MCR by state. The coefficient of variation ranged from 0.25 to 028 for unadjusted MCD data and from 0.34 to 0.37 for Medicare Wage Index-adjusted MCD data. From 2020 to 2024, the shoulder hemiarthroplasty code fell 32.2% when unadjusted and 43.3% when adjusted for inflation. Total shoulder arthroplasty rose by 1.1% but fell by 15.4% when adjusted for inflation.

MCD reimbursement for shoulder arthroplasty procedures is substantially lower than MCR on average but highly variable among states. The percentage difference between MCD and MCR for shoulder arthroplasty codes is greater than the percentage difference for total hip and knee arthroplasty. Compared to 2020, primary shoulder arthroplasty reimbursement is decreasing when adjusted for inflation.