Background: Downward trends in inflation-adjusted Medicare reimbursement to hand surgeons have been reported, likely to offset increasing costs associated with the aging population. Less is known regarding Medicaid reimbursement to physicians, but generally Medicaid reimbursement rates are thought to be lower than Medicare. Given the ability for each state to set rates for a given procedure, discrepancies exist in Medicaid reimbursements between states. This study compared Medicaid and Medicare rates for common hand surgery procedures to determine national and state differences in reimbursement.

Methods: Medicare rates for 26 commonly billed hand procedures, based on prior reimbursement studies, were obtained from the Center for Medicare & Medicaid fee schedule database. Corresponding work RVUs for each procedure were also collected here. Medicaid rates were found at states’ Medicaid online fee schedule website. State rates were compared to corresponding Medicare rates using mean values and dollar differences. These dollar differences were also divided by work RVUs. Each states’ reimbursement values were also adjusted using the Medicare Wage Index to account for regional wage differences. Variability between states and between procedures was analyzed using percentages as a function of Medicare reimbursement and by coefficient of variation values. Coefficient of variation values were calculated by dividing the standard deviation by the mean for each procedure, and values further from zero indicate higher variability within a dataset.

Results: Medicaid reimbursement was lower than Medicare for 22 of the 26 procedures included in the analysis. On average, Medicaid rates were 18% lower than Medicare, a difference that increased to 29% when accounting for wage differences. Average dollar differences by procedure ranged from $205 less to $110 more for Medicaid. Dollar differences per RVU ranged from $38 less to $48 more for Medicaid. State Medicaid rates ranged from 30% to 158% of Medicare. Variability was low among Medicare procedures, with a coefficient of variation of 0.06. Medicaid variability between states ranged from 0.26-0.57 for unadjusted data and 0.36-0.67 for wage-adjusted data.

Conclusion: On average, Medicaid reimbursement is substantially lower than Medicare for common hand surgery procedures. There was wide variability in Medicaid rates, both between states and procedures. Adjustment for wage differences increased the percent difference and variability, suggesting a lack of objective metrics used to set Medicaid prices. Hand surgeons should be aware of variable prices between states and advocate for policy that fairly reimburses them while promoting better access to care for this vulnerable population.