Joint Replacements Cost Medicare $6.6 Billion in 2013

Joint replacements were the most common hospital procedure that Medicare paid for in 2013, accounting for nearly 450,000 inpatient admissions and $6.6 billion in payments, according to billing data released this week by the U.S. Department of Health and Human Services (HHS).

Among physicians, cancer specialists received the largest payments from Medicare, but much of their reimbursements went to cover the cost of expensive drugs to treat their patients, the data concluded.

Medicare turns 50 next month, and in the age of big data the more than $600 billion that taxpayers spend annually on the program is getting closer scrutiny than ever. Medicare covers 55 million people, a number that keeps growing as baby boomers reach age 65 and sign up. A recent trend of moderating medical spending has not dispelled concerns about the program’s long-term financial stability.

The government’s release of Medicare data marks the third year regulators have shared details on hospital spending, and the second year they’ve dispensed statistics on physician reimbursements.

The HHS data release shows that major joint replacement procedures averaged (nationally) about 12 per 1,000 Medicare beneficiaries. But in some areas of the country, the rate was nearly twice as high or even greater. HHS said its analysis shows joint replacement surgery rates are highest in the Midwest and Rocky Mountain states. Such regional variations have long been seen in Medicare data, and they remain a source of debate. Some experts claim they are an indicator of waste in the health care system, while others contend they reflect differences in the way medicine is practiced around the country.

The billing information also indicates that Medicare spends more money in total dollars for the services of family-practice doctors and adult medicine specialists — the kinds of doctors who follow patients day to day, treating blood pressure problems, high cholesterol and other common conditions. But on a per-visit basis, specialists command much higher reimbursement. HHS said its analysis showed that anesthesiologists, orthopedic surgeons, ophthalmologists and emergency medicine doctors are among the most highly paid specialists.

And while heart disease is the leading cause of death in the United States, a cursory look at Medicare’s hospital billing files does not reflect that, as coronary disease can be billed under many different payment codes. For example, there are two major codes for heart failure, depending on the severity of the case. Heart failure is a progressive disease, as the heart gradually loses its ability to adequately pump blood through the body. The two major heart failure billing codes accounted for more than 390,000 hospital admissions in 2013. Analysts must factor in bypass surgery, arrhythmias and other conditions for the full burden of heart disease to become clearer.

Last year’s release of doctor payment data for 2012 revealed that a tiny group of physicians — 344 out of more than 825,000 — received $3 million or more apiece from Medicare. That’s a threshold that raises eyebrows for the government’s own investigators. The HHS inspector general has recommended Medicare automatically scrutinize billings above a set level.

But some doctors complained the data created a misleading impression about their practices, because their total reimbursement included medication costs.

HHS responded this year by fine-tuning its analysis. The government now claims that drug costs account for a large portion of reimbursements for cancer doctors, ophthalmologists, rheumatologists and doctors who treat blood disorders.