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Urban Cost Pressures vs. Medicare Reimbursement Trends
Nancy Qin^*1, Annie B. McVeigh¹, Lucy Wei¹, Anna M. Vaeth¹, Makayla Kochheiser¹, David Otterburn^2
1Weill Cornell Medical College, New York, NY; ²Division of Plastic and Reconstructive Surgery, New York Presbyterian, NY, NY

BACKGROUND
In recent years, the cost of living (COL) in major U.S. cities has risen, while Medicare reimbursement rates across specialties have stagnated or declined. This study examines how inpatient breast-related plastic surgery reimbursement has changed relative to COL in the 20 largest U.S. cities from 2010 to 2024.

METHODS
Changes in COL from 2010 to 2024 were calculated for each city using the Council for Community and Economic Research (C2ER) database. Medicare reimbursement trends for breast-related plastic surgery procedures were analyzed by city using Medicare Administrative Contractor (MAC) codes, Current Procedural Terminology (CPT) codes, and the Medicare Physician Fee Schedule Database. Gross reimbursement rates were adjusted to 2010 dollar estimates for inflation using the Consumer Price Index (CPI) from the U.S. Bureau of Labor Statistics. A cross-sectional analysis was then performed to evaluate discrepancies between changes in reimbursement rates and changes in COL by city.

RESULTS
Between 2010 and 2024, COL increased by an average of 42.9% across the 20 largest U.S. cities, with the highest rise in Seattle (+64.3%) and the lowest in Philadelphia (+10.4%). During the same period, Seattle experienced the greatest increase in average gross Medicare reimbursement for breast-related plastic surgeries (+8.8%), while Columbus saw the largest decline (−6.2%). In every city, however, reimbursement changes failed to keep pace with rising COL (Table 1). The largest gaps were observed in Dallas and Seattle (55.6% each), while Philadelphia and San Antonio had the smallest disparities (16.3% and 33.6%, respectively). After adjusting reimbursement rates for inflation, these gaps widened further, ranging from 45.2% to 89.0% (mean: 74.4%).

CONCLUSIONS
Medicare reimbursement rates for breast-related plastic surgeries have not kept pace with the rising COL in the 20 largest cities in the United States. The significant regional disparities, particularly in Seattle and Dallas, highlight the need for policy reforms to sustain and expand access to reconstructive care.