Divergence of Procedural and Cognitive Reimbursement in Hand Surgery: A 17-Year Analysis of the Medicare Physician Fee Schedule, 2010–2026

Purpose Medicare reimbursement for hand surgery procedures has declined in real terms over the past two decades. The purpose of this study was to characterize trends in procedural and cognitive reimbursement in hand surgery over a 17-year period spanning the 2021 revaluation of office Evaluation and Management (E&M) codes, implemented under statutory budget-neutrality. We hypothesized that inflation-adjusted procedural and cognitive reimbursement would diverge in the years following the 2021 revaluation and that this divergence would widen through 2026. Methods Annual Medicare Physician Fee Schedule reimbursement was extracted for 25 high-volume hand and upper-extremity Current Procedural Terminology (CPT) codes and nine office E&M codes (99202–99205, 99211–99215) between 2010 and 2026. Conversion factors were obtained from Centers for Medicare & Medicaid Services final rules and verified against the American Medical Association historical record. Reimbursement was adjusted for inflation using both the Consumer Price Index for All Urban Consumers and the Medicare Economic Index, the latter capturing practice cost inflation specifically. Compound annual growth rates were computed for the full study period and for the segments before (2010–2020) and after (2021–2026) the E&M revaluation. A segmented linear regression with a 2021 breakpoint tested whether the slope and level of inflation-adjusted reimbursement differed significantly across eras. Results From 2010 to 2026, inflation-adjusted (Consumer Price Index for All Urban Consumers) Medicare reimbursement for hand surgery procedures fell 33.9% (compound annual growth rate, −2.55%), while E&M reimbursement fell 10.1% (−0.66%). When adjusted using the Medicare Economic Index, hand surgery reimbursement fell 24.3%, whereas E&M reimbursement increased 2.9%. Segmented regression demonstrated significant level shifts at 2021 of −5.7 index points for hand surgery ( P = .002) and +6.5 index points for E&M ( P = .021). Slope acceleration in the post-2021 segment was significant for both baskets. The E&M-to-hand reimbursement ratio increased from 100 (2010 baseline) to 120 in 2021, rising to 136 by 2026, coinciding with the 2026 efficiency adjustment applied selectively to procedural codes and other 2026 valuation changes. Conclusions The 2021 E&M revaluation was temporally associated with a structural divergence between procedural and cognitive reimbursement in hand surgery that has compounded under continued conversion factor cuts and the 2026 efficiency adjustment. Clinical relevance These findings have implications for hand surgery workforce sustainability, practice site selection, and ongoing advocacy for inflationary updates indexed to the Medicare Economic Index. Type of study/level of evidence Economic/Decision Analysis III.