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Abstract

Background:

Healthcare costs in the United States are rising in conjunction with an increased utilization of outpatient centers, particularly in sports medicine.

Purpose/Hypothesis:

The primary purpose of this study was to utilize Medicare data to compare the overall cost of sports medicine procedures performed in the ambulatory surgery centers (ASCs) and hospital outpatient department (HOPD) settings. The secondary purpose of this study was to compare facility fees, surgeon fees, Medicare payments, and patient payments between ASCs and HOPDs. It was hypothesized that procedures performed at ASCs would demonstrate a lower overall cost than those performed at HOPDs.

Study Design:

Cross-sectional study.

Methods:

Publicly available data from the Centers for Medicare & Medicaid Services (CMS) were accessed via the Medicare Procedure Price Lookup Tool. Current Procedural Terminology (CPT) codes were used to identify sports medicine procedures approved for the outpatient setting by CMS. Facility fees, surgeon fees, total costs, Medicare payments, and patient payments were extracted. Descriptive statistics were utilized to calculate the mean and standard deviation for each category of fee and payment.

Results:

A total of 62 CPT codes were identified. Compared with HOPDs, shoulder procedures (n = 25) at ASCs had lower total costs ($3622 ± $1160 vs $6261 ± $1759; P < .001), facility fees ($2777 ± $1020 vs $5416 ± $1606; P < .001), Medicare payments ($2898 ± $928 vs $5009 ± $1407; P < .001), and patient payments ($724 ± $232 vs $1252 ± $352; P < .001) compared with HOPDs. Knee procedures (n = 31) at ASCs had lower total costs ($4236 ± $2741 vs $6668 ± $3341; P = .006), facility fees ($3408 ± $2507 vs $5840 ± $3116; P = .006), Medicare payments ($3389 ± $2193 vs $5458 ± $2955; P = .006), and patient payments ($847 ± $548 vs $1209 ± $429; P = .011). Hip procedures (n = 6) at ASCs had lower total costs ($3583 ± $698 vs $6671± $1451; P = .025), facility fees ($2725 ± $669 vs $5813 ± $1431; P = .025), Medicare payments ($2866 ± $558 vs $5336 ± $1161; P = .025), and patient payments ($716 ± $139 vs $1333 ± $290; P = .025) compared with HOPDs.

Conclusion:

Our study demonstrates that sports medicine procedures performed at ASCs for Medicare recipients result in considerable overall total cost savings when compared with those performed at HOPDs. Sports medicine providers should be aware of differences in costs when determining the best setting for these procedures.

Keywords

ambulatory surgery center cost Medicare outpatient surgery savings sports medicine

Healthcare costs in the United States are on the rise and are expected to continue increasing. The national health expenditure grew 2.7% in 2021 to $4.3 trillion. The Centers for Medicare & Medicaid Services (CMS) expects this number to rise by 5.4% annually through 2028, which amounts to nearly $13,000 per person, of which 21% is secondary to Medicare spending.²⁹ Given these expenditures, government insurance providers are continuously looking for ways to save money for both the institution and patients. This downward pressure has resulted in decreasing Medicare reimbursement for orthopaedic surgeons and facilities.^9,21

Partly as a result of this financial stress, there has been an increasing proportion of orthopaedic surgeries being performed on an outpatient basis.^2,7 Outpatient facilities consist of both hospital outpatient departments (HOPDs) and ambulatory surgery centers (ASCs). HOPDs are facilities owned and attached to a hospital, while ASCs are standalone facilities.²⁷ ASCs have been shown in the literature to not only provide cost savings compared with HOPDs but also to be safe and effective for many common orthopaedic procedures.^{3,11,12,14,16,20} It has been postulated that competition between ASCs and HOPDs is beneficial in controlling and reducing costs to the healthcare system.⁴ A 2022 study by Wang et al³² investigated trends in ASC and HOPD usage and surgical costs for 6 of the most common orthopaedic procedures from 2013 to 2018. The authors found that ASC utilization increased by 3% while total costs decreased by 0.1% yearly. During the same period, costs at HOPDs increased by 2.5% yearly, with the mean total costs 26% higher than those at ASCs.³² Our group previously showed that shoulder and elbow procedures performed at ASCs resulted in cost savings when compared with HOPDs.¹¹ However, no studies to this point have looked more broadly at all of the most common sports medicine procedures.

The primary purpose of this study was to utilize Medicare data to compare the overall cost of sports medicine procedures performed at ASCs and HOPDs. In addition, this study aimed to compare facility fees, surgeon fees, Medicare payments, and patient payments between these 2 settings. We hypothesized that procedures performed at ASCs would demonstrate a lower overall cost than those performed at HOPDs.

Methods

Data Collection

Medicare publishes publicly available data on an annual basis that details volume, reimbursement rates, and costs for medical procedures. This database has been utilized in orthopaedic literature for a variety of studies.^{1,11,13,17,18,21,28} For this study, the Medicare Procedure Price Lookup Tool³⁰ was queried using individual Current Procedural Terminology (CPT) codes for sports medicine procedures approved for outpatient surgery by the CMS. The American Board of Orthopaedic Surgeons sports medicine subspecialty case list was used to identify common sports medicine CPT codes.⁶ Details on which CPT codes were included can be found in the appendix. Procedures were categorized based on anatomic region. These categories included shoulder, knee, hip, and combined cohorts. Data on the total cost, facility fees, surgeon fees, Medicare payments, and patient payments for each procedure were collected. The total cost is equal to the facility fee plus the surgeon’s fee. The Medicare payment is reported as 80% of the total cost, and the remaining amount is the patient’s payment.³¹ These costs were compared between ASCs and HOPDs.

Statistical Analysis

Descriptive statistics were utilized to calculate the mean and standard deviation for each category of fee and payment. Differences in costs between ASCs and HOPDs for shoulder, knee, and hip procedures were included. An analysis of all procedures combined was also conducted. Total costs, facility fees, surgeon fees, Medicare payments, and patient payments were all analyzed. The means of each type of fee were calculated and compared between ASCs and HOPDs to assess mean savings. The Mann-Whitney U test was utilized, given the nonparametric distribution of the data. All statistical analysis was performed using Stata Version 17.0 (StataCorp). All tests were 2-sided, with statistical significance set at a probability value of P < .05.

Results

Shoulder Codes

In this study, 25 of the most commonly utilized CPT codes were included (See Appendix). ASCs demonstrated lower cost of procedure ($3622 ± $1160 vs $6261 ± $1759; P < .001), facility fees ($2777 ± $1020 vs $5416 ± $1606; P < .001), Medicare payments ($28982 ± $928 vs $5009 ± $1407; P < .001), and patient payments ($724 ± 232 vs $1252 ± $352; P < .001) compared with HOPDs (Table 1). Compared with procedures performed at HOPDs, those performed at ACSs showed a 42% reduction in total costs, Medicare payments, and patient payments. They also demonstrated a 49% cost saving for facility fees. Surgeon fees were the same regardless of the surgery setting.

Table 1

Costs Associated With ASCs and HOPDs for Shoulder, Knee, Hip, and Combined Cohorts^a

	ASC	HOPD	^b P
Shoulder
Total cost	3622 ± 1160	6261 ± 1759	<.001
Doctor fee	846 ± 216	846 ± 216	≥.999
Facility fee	2777 ± 1020	5416 ± 1606	<.001
Medicare payment	2898 ± 928	5009 ± 1407	<.001
Patient payment	724 ± 232	1252 ± 352	<.001
Knee
Total cost	4236 ± 2741	6668 ± 3341	.006
Doctor fee	828 ± 291	828 ± 291	≥.999
Facility fee	3408 ± 2507	5840 ± 3116	.006
Medicare payment	3389 ± 2193	5458 ± 2955	.006
Patient payment	847 ± 548	1209 ± 429	.011
Hip
Total cost	3583 ± 698	6671 ± 1451	.025
Doctor fee	858 ± 155	858 ± 155	≥.999
Facility fee	2725 ± 669	5813 ± 1431	.025
Medicare payment	2866 ± 558	5336 ± 1161	.025
Patient payment	716 ± 139	1333 ± 290	.025
Combined
Total cost	3926 ± 2089	6504 ± 2631	<.001
Doctor fee	838 ± 249	838 ± 249	≥.999
Facility fee	3088 ± 1909	5666 ± 2450	<.001
Medicare payment	3140 ± 1671	5265 ± 2287	<.001
Patient payment	784 ± 418	1238 ± 384	.002

Values are presented in US$ as mean ± SD. Bold P values indicate statistical significance (P < .05). ASC, ambulatory surgical center; HOPD, hospital outpatient department.

P values calculated using the Mann-Whitney U test.

Knee Codes

For this study, 31 of the most commonly utilized knee CPT codes were identified (see Appendix). ASCs demonstrated lower total costs ($4236 ± $2741 vs $6668 ± $3341; P = .006), facility fees ($3408 ± 2507 vs $5840 ± $3116; P = .006), Medicare payments ($3389 ± $2193 vs $5458 ± $2955; P = .006), and patient payments ($847 ± $548 vs $1209 ± $429; P = .011) (Table 1). ASCs had 36% lower total costs, a 42% lower facility fee, 38% lower Medicare payments, and 30% lower patient payments. Surgeon fees were the same regardless of the surgery setting.

Hip Codes

When comparing the 6 most common hip CPT codes (See Appendix), ASCs showed significant cost savings in the total procedure cost ($3583 ± $698 vs $6671 ± $1451; P = .025), facility fees ($2725 ± $669 vs $5813 ± $1431; P = .025), Medicare payments ($2866 ± $558 vs $5336 ± $1161; P = .025), and patient payments ($716 ± $139 vs $1333 ± $290; P = .025) (Table 1). This amounted to approximately 46% cost savings for total costs, Medicare payments, and patient payments, as well as 53% for facility fees. Surgeon fees were the same regardless of the surgery setting.

Combined Sports Medicine Procedures

When all 62 procedural codes were combined into a single cohort, ASCs once again had lower costs across all variables outside of surgeon fees. The total cost ($3926 ± $2089 vs $6504 ± $2631; P < .001), facility fees ($3088 ± $1909 vs $5666 ± $2450; P < .001), Medicare payments ($3140 ± $1671 vs $5265 ± $2287; P < .001), and patient payments ($784 ± $418 vs $1238 ± $384; P = .0024) were all significantly lower if performed at an ASC (Figure 1). On average, total costs and Medicare payments were 40% lower, facility fees were 45% lower, and patient payments were 37% lower when procedures were performed at ASCs.

Figure 1.

Cost breakdown for the combined sports medicine cohort (shoulder, knee, and hip), comparing ambulatory surgery centers and hospital outpatient departments.

Discussion

The major findings of this study were that shoulder, knee, and hip sports medicine procedures all have a lower mean total cost when performed at ASCs compared with HOPDs. In addition, ASCs had lower facility fees, Medicare payments, and patient payments for all cohorts. This study also revealed that Medicare payments typically fully covered the facility fee for procedures performed at ASCs, whereas Medicare payments were consistently lower than the higher facility fee of HOPDs. The surgeon’s fees were equivalent for all procedures, regardless of site. As the emphasis on cost-conscious healthcare spending grows, reducing extraneous costs while maintaining optimal outcomes is the goal. The present study sought to investigate differences in the cost to Medicare beneficiaries between ASCs and HOPDs for sports medicine procedures.

Medicare expenditures continue to rise yearly, and the results of this study suggest that transitioning care to ASCs from HOPDs when medically appropriate results in a mean total cost savings of 42% for shoulder procedures, 36% for knee procedures, and 46% for hip procedures. Our findings are in line with those of Wang etal,³² who found a 26% decrease in cost for procedures done at ASCs compared with HOPDs in a cohort from 2013 from 2018. These procedures included carpal tunnel release, lumbar microdiscectomy, anterior cruciate ligament reconstruction (ACLR), knee arthroscopy, arthroscopic rotator cuff repair, and bunion repair. The present study indicates that the cost-savings gap between facilities may potentially be widening. The reasons behind ASC cost savings are multifactorial but are theorized to lower overhead costs, reduced inventory, narrower scope of practice, faster operating room turnover, decreased postoperative resource utilization, and fewer staff.^5,10 The lower expense of ASCs puts market pressure on HOPDs to reduce costs and streamline care, ultimately resulting in lower costs to insurance and the patient. Lopez etal¹⁵ found an 8.8% increase in annual procedure volume in a Medicare population at ASCs, with a 10.5% increase in reimbursement per case at these sites from 2012 to 2017. In 2019, CMS updated reimbursement modalities for both facilities to move toward site-neutrality in cost, although they estimated that most changes were expected to be a reduction in HOPD costs.⁸ ASCs have also been shown in the literature to be as safe as HOPDs with equivalent low complication rates for procedures such as hip arthroscopy, ACLR, shoulder surgery, and others across orthopaedic subspecialties.^23-25 Physician ownership in ASCs has certainly played a role in the movement of cases away from HOPDs. Physicians who own a stake in an ASC ultimately garner a portion of the revenue the facility generates. Thus, there is a financial incentive to bring cases to their ASC instead of an HOPD.

Procedures performed at HOPDs were also associated with a mean increase of $400 to $500 in patient payments compared with ASCs. As the surgeon’s fees were equal between sites for all procedures, this does not explain the observed increase. The higher patient payment appears to stem from the higher facility fees at HOPDs compared with ASCs. Facility fees were consistently higher at HOPDs, and while Medicare payments were also higher at these sites, they generally did not fully cover the increased facility fee. This led to a mean cost increase of nearly $450 to the patient when a procedure was performed in an HOPD compared with an ASC, amounting to 30% to 46% higher out-of-pocket expenses to the patients for the same procedure. Schoen etal²⁶ in 2017 found that ~one-fourth of Medicare recipients pay ≥20% of their income on insurance premiums and medical care. Therefore, these savings provided by ASCs are especially valuable to Medicare beneficiaries who already have costly medical bills on top of traditionally lower or fixed incomes. To our knowledge, this study is the first assessment of the differential patient payments between HOPDs and ASCs for these sports medicine procedures.

Not all patients are candidates for outpatient surgery at an ASC. At HOPDs, surgeons are more equipped to care for patients with greater medical complexity, given access to medical specialists and the ability to admit patients who require extended observation. This has led to an environment where older, sicker patients are more likely to undergo surgery at HOPDs than ASCs. Differences in cost may reflect an attempt by HOPDs to recoup the cost of caring for these more complex patients to remain solvent. When selecting appropriate patients for outpatient success, orthopaedic sports medicine providers need to consider patient factors—including medical comorbidities and social circumstances.^19,22,33

Limitations

Limitations of this study pertain to the usage of publicly available Medicare data provided by the CMS. The validity of this data is based on proper CPT coding by surgeons and ongoing database maintenance. In addition, the database estimates the cost for individual CPT codes, whereas oftentimes orthopaedic sports medicine procedures include multiple CPT codes being billed, given the diverse nature of the specialty. We attempted to control for this by including all available outpatient CPT codes pertaining to sports medicine procedures in the shoulder, hip, and knee. This is a study of Medicare payors only, which is particularly important as relatively few patients undergoing sports medicine procedures have Medicare as their primary insurance. Yet the results may inform general payment trends that can be extrapolated to other medical payors. Future studies should evaluate the cost differences for various payor mixes apart from Medicare.

Conclusion

Supplemental Material

sj-docx-1-ojs-10.1177_23259671251333110 – Supplemental material for Cost Comparison of Sports Medicine Procedures in Ambulatory Surgery Centers Versus Hospital Outpatient Departments for Medicare Recipients

Supplemental material, sj-docx-1-ojs-10.1177_23259671251333110 for Cost Comparison of Sports Medicine Procedures in Ambulatory Surgery Centers Versus Hospital Outpatient Departments for Medicare Recipients by Johnathon R. McCormick, William E. Harkin, Vincent P. Federico, Vince K. Morgan, Robert B. Browning, Luis M. Salazar, Garrett R. Jackson, Zeeshan A. Khan, Daniel J. Kaplan, Nikhil N. Verma, Brian J. Cole and Jorge Chahla in Orthopaedic Journal of Sports Medicine

Footnotes

Final revision submitted November 23, 2024; accepted December 30, 2024.

Presented as a poster at the annual meeting of the AOSSM, Denver, Colorado, July 2024.

One or more of the authors has declared the following potential conflict of interest or source of funding: J.R.M. has received education payments from Medwest Associates; hospitality payments from Medical Device Business Services. W.E.H. has received education payments from Medwest Associates. V.P.F. has received education payments from Medwest Associates. V.K.M. has received hospitality payments from Medical Device Business Services; education payments from Medwest Associates. R.B.B. has received education payments from Medwest Associates. L.M.S. has received education payments from Titan Surgical Group.N.N.V. has received royalties from Arthrex, Smith & Nephew, and Graymont Professional Products IP; nonconsulting fees from Arthrex; hospitality payments from Abbott Laboratories, Spinal Simplicity, and Relievant Medsystems; and consulting fees from Stryker and Arthrex. B.J.C. has received consulting fees from Aesculap Biologics, Arthrex, Bioventus, DJO, Acumed, Vericel, Anika Therapeutics, OSSIO, Pacira Pharmaceuticals Incorporated, and Endo Pharmaceuticals; nonconsulting fees from Arthrex, Vericel, Terumo BCT, Pacira Pharmaceuticals Incorporated, and Aesculap Biologics; royalties from Arthrex; hospitality payments from GE Healthcare; and honoraria from Vericel. J.C. has received consulting fees from Smith & Nephew, RTI Surgical, Vericel, Arthrex, DePuy Synthes Products, and Linvatec; nonconsulting fees from Smith & Nephew, Synthes GmbH, Linvatec, and Arthrex; education payments from Medwest Associates, Arthrex, and Smith & Nephew; hospitality payments from Stryker and Medical Device Business Services; and a grant from Arthrex. AOSSM checks author disclosures against the Open Payments Database (OPD). AOSSM has not conducted an independent investigation on the OPD and disclaims any liability or responsibility relating thereto.

Ethical approval was not sought for the present study.

Supplemental Material

Supplemental Material for this article is available at .

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Supplementary Material

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