How Medicare actually pays for a hip or knee replacement. Where we are today. How we got here. What changed in 2026 and what are we facing in 2027. About 94% of what Medicare pays for a joint replacement goes to the hospital or surgery center. About 6% goes to the surgeon who performs the operation — and that 6% is the only part of the payment with no inflation adjustment attached to it. In 2026 it was cut roughly 7%. The facility side was not. This series works through four things: what the 2026 Physician Fee Schedule final rule actually did and why the mechanism repeats, how the current fee was arrived at across three decades of individual decisions, and what twenty years of compensation data show when orthopaedics is compared against fifteen other high-skilled professions. Finally, we will dive into what is coming as early as 2027 and how will that affect physicians and patients. Every figure is drawn from peer-reviewed work, cited on screen and linked below. LeBrun DG, Bradley AT, Frisch NB, Rana AJ. The 2026 CMS Physician Fee Schedule Final Rule. J Arthroplasty. 2026;41(8):2238–2240. pubmed.ncbi.nlm.nih.gov/41967530/ Call CM, DeMik DE, Elbuluk AM, et al. The $1,200 Total Joint Arthroplasty Reimbursement. J Arthroplasty. 2025;40(6):1379–1384. pubmed.ncbi.nlm.nih.gov/40081607/ Pereira DE, Hannon CP, Courtney PM, Rana AJ, Frisch NB. Trends in Orthopaedic Surgeon Compensation. J Arthroplasty. 2025;40(7):1660–1666. pubmed.ncbi.nlm.nih.gov/39971206/ Nicholas B. Frisch, MD, MBA is a board-certified orthopedic surgeon specializing in hip and knee replacement, revision arthroplasty and outpatient joint replacement in Auburn Hills, Michigan. General education, not medical advice. frischortho.com · 248-484-2134