Do Medicare rates impact total joint replacement surgeons' ability to earn an average income? 5 insights

Orthopedic Sports Medicine

A study, presented at annual meeting for the American Association of Hip and Knee Surgeons in 2013, examined whether adult reconstruction surgeons who perform total joint replacements could generate an average adult reconstruction income at Medicare reimbursement rates.

Researchers used the following to create a model to calculate collections that could be realized by an AR surgeon performing 300 TJR per year at the 2013 Medicare reimbursement rate:


•    2009 MGMA Cost Survey
•    2011 MGMA Academic and Private Practice Compensation Survey
•    2010 Sullivan Cotter Physician Compensation and Productivity Survey
•    CMS locality reimbursement data
•    Internal billing and collection data


The collections calculated using the model was compared to the actual salary earned by an AR orthopedic surgeon in a mixed payer reimbursement model.


Here are five insights:


1. Average Medicare reimbursement data for AR orthopedic surgeons indicated that surgical collections would total $493,563 and average outpatient collections would total $183,480.


2. Total possible Medicare collections reached $677,043.


3. Thus, an AR orthopedic surgeon would earn approximately $453,618 in a Medicare-only environment, given a 33 percent contribution to overhead and benefits. A 50 percent contribution would result in a $338,521 salary.


4. According to Sullivan Cotter, the mean salary for an AR orthopedic surgeon was $606,439 in a mixed reimbursement model.


5. The Medical Group Management Association's regional average for an AR orthopedic surgeon was $563,339, with a 33 percent fringe contribution.


“Using Medicare compensation as a basis for modeling the projected salary realied by an AR orthopedic surgeon, the projected total is well below the average compensation in a mixed reimbursement mode,” concluded the study authors. “As reimbursement levels decrease under healthcare reform, the trend calls intot question the viability of pure private practice AR surgeon models going forward.”


The study authors suggest alternative reimbursement initiatives could create opportunity to preserve private practice.


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