Spatiotemporal Medicare Reimbursement Trends and Economic Clusters in Otologic/Neurotologic Surgery

Objectives To characterize national trends in Medicare reimbursement for otologic/neurotologic procedures from 2012 to 2024, quantify the relative contributions of service volume, procedural mix, and within‐code reimbursement to aggregate spending, and identify clusters of procedures with similar economic behavior. Methods Medicare Part B claims data from 2012 to 2024 were utilized and financial data were inflation‐adjusted to 2024 USD. National trends in volume, spending, and reimbursement per service were evaluated. A Shapley decomposition framework quantified the contributions of service volume, procedural mix, and within‐code reimbursement to changes in aggregate spending. Unsupervised clustering with principal component analysis, hierarchical clustering, and k‐means classified CPT codes by reimbursement growth, variability, and service volume. Geographic and rural–urban reimbursement variation were also assessed. Results Annual otologic/neurotologic procedural volume increased from 1.85 million to 2.15 million services, while inflation‐adjusted mean reimbursement per service declined from $80.47 to $57.07. Total inflation‐adjusted spending fell from $147.1 million in 2012 to $121.9 million in 2024. Decomposition showed that rising service volume increased spending by $20.0 million, but this was offset by adverse shifts in procedural mix (−$7.7 million) and declining within‐code reimbursement (−$37.5 million). Clustering identified three economic phenotypes: low‐volume stable codes, high‐volume moderate‐variability codes, and high‐cost volatile codes. Geographic analysis demonstrated widening interstate and rural–urban reimbursement variation over time. Conclusion Despite growing demand for otologic/neurotologic services, inflation‐adjusted Medicare reimbursement has steadily declined. Aggregate spending reductions were driven primarily by reimbursement erosion rather than reduced utilization, highlighting structural vulnerabilities in current fee‐schedule valuation for otologic/neurotologic care. Level of Evidence III.