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Spatiotemporal Medicare Reimbursement Trends and Economic Clusters in Otologic/Neurotologic Surgery
Akshay Warrier1,2, Shahid Iqbal3, Daniel Bu2
1Department of Otolaryngology-Head and Neck Surgery, Rutgers New Jersey Medical School, Newark, New Jersey, USA.
Objectives:
To characterize national trends in Medicare reimbursement for otologic/neurotologic procedures from 2012 to 2024, quantify the relative contributions of service volume, procedural mix, and within-code reimbursement to aggregate spending, and identify clusters of procedures with similar economic behavior.
Methods:
Medicare Part B claims data from 2012 to 2024 were utilized and financial data were inflation-adjusted to 2024 USD. National trends in volume, spending, and reimbursement per service were evaluated. A Shapley decomposition framework quantified the contributions of service volume, procedural mix, and within-code reimbursement to changes in aggregate spending. Unsupervised clustering with principal component analysis, hierarchical clustering, and k-means classified CPT codes by reimbursement growth, variability, and service volume. Geographic and rural-urban reimbursement variation were also assessed.
Results:
Annual otologic/neurotologic procedural volume increased from 1.85 million to 2.15 million services, while inflation-adjusted mean reimbursement per service declined from $80.47 to $57.07. Total inflation-adjusted spending fell from $147.1 million in 2012 to $121.9 million in 2024. Decomposition showed that rising service volume increased spending by $20.0 million, but this was offset by adverse shifts in procedural mix (-$7.7 million) and declining within-code reimbursement (-$37.5 million). Clustering identified three economic phenotypes: low-volume stable codes, high-volume moderate-variability codes, and high-cost volatile codes. Geographic analysis demonstrated widening interstate and rural-urban reimbursement variation over time.
Conclusion:
Despite growing demand for otologic/neurotologic services, inflation-adjusted Medicare reimbursement has steadily declined. Aggregate spending reductions were driven primarily by reimbursement erosion rather than reduced utilization, highlighting structural vulnerabilities in current fee-schedule valuation for otologic/neurotologic care.
Level Of Evidence:
III.
