Implant Costs Consume a Large Proportion of the Reimbursement in Revision Hip and Knee Arthroplasties

BACKGROUND: Revision total hip arthroplasty (rTHA) and revision total knee arthroplasty (rTKA) burdens continue to increase while overall reimbursement decreases. We sought to evaluate the percentage and variability of the diagnosis-related group (DRG) reimbursement spent on implants in revision arthroplasty. METHODS: A consecutive series of 199 rTHAs and 187 rTKAs performed between June 1, 2019, and June 1, 2021, was reviewed at one academic medical center. Patient characteristics, preoperative diagnosis, implant records, and billing data were recorded for DRG 466 (revision hip or knee arthroplasty with major complication), 467 (revision with complication or comorbidity), and 468 (revision without comorbidity or complication). Data were stratified by DRG and diagnosis. Implant, surgery type, and patient comorbidity factors were analyzed for association with increased costs. RESULTS: Implant costs comprised an average of 24% of reimbursements for DRG 466 (range, 2.4 to 133), 36.7% for DRG 467 (range, 3.5 to 118), and 35% for DRG 468 (range, 2.5 to 175). When stratified by diagnoses, groups with the largest ranges in implant costs as a percentage of the reimbursement were aseptic loosening (range, 6.6 to 178.2), infection (range, 3.2 to 129.3), and metallosis (range, 2.4 to 108.6%). Implants for rTKA were significantly more of the overall reimbursement than rTHA across all DRGs (33.3 versus 25.7%, P < 0.001). Factors associated with higher implant costs included more prior arthroplasty surgeries on the same joint (P < 0.001) and an American Society of Anesthesiologists (ASA) score of ≥ 3 (P = 0.006). CONCLUSIONS: A major portion of the DRG reimbursement is spent on implants in revision arthroplasty. However, there is a wide range in cost determinants, making it difficult to determine the profitability associated with individual diagnoses. Our findings highlight the limited ability of the DRG system to capture the complexity and variability of costs in revision total joint arthroplasty (rTJA).