Higher risk, lower reimbursement: medicare payment paradox in cranial neurosurgery

Background and purpose To quantify variations in Medicare reimbursement for cranial neurosurgical procedures from 2014 to 2022 and evaluate associations with sociodemographic, clinical, and geographic factors. Methods This retrospective cross-sectional regression analysis of state-level Medicare data reviewed cranial surgery-related DRGs (21–30, 61–63, 81–83, 113–115, 131–133). We used multivariable linear regressions with heteroscedasticity-robust standard errors to assess associations between standardized per capita Medicare payments and variables including age, gender, race/ethnicity, dual-eligibility status, risk category, procedure volume, and region. Results were reported using unstandardized and standardized coefficients across 459 state-year observations. ResultsMean cranial DRG payment was $25,234. The Northeast and West had significantly higher payments than the South (β = $3,952 and $3,781, respectively; P <.001). Each SD increase in the percentage of Black and other non-White beneficiaries was associated with $957 and $875 higher payments, respectively (P <.001). Dual-eligibility rates predicted higher payments (β = $1,300 per SD; P <.001). In contrast, high-risk status was associated with lower payments (β = –$1,616 vs. low-risk; P =.001). Payments demonstrated a consistent upward trend of $905 annually (P <.001), with older populations showing higher payments (β=$728 per SD, p =.002). Conclusions Medicare payments for cranial neurosurgery varied by region, race, socioeconomic status, and risk. High-risk patients received notably lower reimbursement, raising concerns about potential disincentives for treating complex cases. These findings highlight opportunities to improve risk adjustment and promote equitable neurosurgical reimbursement.