Federal Regulatory Accomplishments

The AAOS Office of Government Relations' regulatory efforts ensure that orthopaedic concerns are addressed even after the conclusion of the legislative process and throughout agency rule-making and implementation stages. To this end, the regulatory staff works closely with Department of Health and Human Services agencies such as the Federal Drug Administration (FDA), Centers for Medicare and Medicaid Services (CMS), Agency for Healthcare Research and Quality (AHRQ) and the Centers for Disease Control and Prevention (CDC). In addition, expertise in coding, reimbursement and payment policy is shared across the Academy and with our members. OGR also houses the AAOS' practice management information and educational efforts. Both of these are key services to our fellowship and members.

Two Midnight Rul

After several letters from AAOS and other organizations, on August 2, 2016, the Centers for Medicare and Medicaid Services (CMS) published a final rule that eliminates the agency’s two-midnight policy, which cut Medicare inpatient reimbursements. CMS detailed the removal of the controversial 0.2 percent payment reduction associated with the agency’s two-midnight rule. CMS also announced that it will pay back hospitals for the years the cut was in place. Under the original two-midnight rule, which started in October 2013, CMS said Medicare Part A payment generally was not appropriate for hospital stays not expected to span at least two midnights. Instead, CMS felt that shorter stays are considered outpatient and should be paid at the lower outpatient rate.

Updates to the Comprehensive Joint Replacement (CJR) Model

On July 25, 2016, the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) announced changes that could allow the CJR model (and the new surgical hip/femur fracture treatment (SHFFT) model) to qualify as an Advanced Alternative Payment Model (APM) beginning in 2018. In addition, the rule announced CMS’ intent to build upon the BPCI initiative with a new voluntary bundled payment model to begin in calendar year 2018 that would also potentially qualify under the proposed criteria for Advanced APMs. The creation of new pathways for these models to qualify as Advanced APMs is a direct result of AAOS engagement with the CMS and CMMI leadership to discuss CJR methodology and bundling.

Orthopaedic Alternative Payment Model Development

AAOS is participating in the American College of Surgeons’ (ACS) Alternative Payment Model (APM) project.  AAOS has chosen three orthopaedic procedures – hip fractures, rotator cuff repair, and knee arthroscopy – for the ACS project for which AAOS will develop the components of the respective orthopaedic bundles.

Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)

MACRA which repealed the sustainable growth rate (SGR) and aims to improve Medicare payment for physicians’ services beginning with establishing the Merit-Based Incentive Payment System (MIPS), based on the following four categories: 1) Quality; 2) Resource Use; 3) Meaningful Use (MU); and 4) Clinical Practice Improvement Activities. The law also provides for and encourages physician participation in Alternative Payment Models (APMs), which include but are not limited to bundled payment initiatives (BPIs) and Accountable Care Organizations (ACOs) and involve financial risk but provide increased bonuses than what is available via MIPS, dependent quality of care and outcome measures as well as care coordination.

AAOS responded to CMS’ Request for Information (RFI) regarding MIPS implementation, APM promotion, and incentive payments for participation in eligible APMs. In addition, AAOS provided comments to CMS on its QPP/MACRA Proposed Rule, Quality Measure Development Plan (MDP), intended to support the transition to MIPS and APMs,on Episode Groups and their components as related to orthopaedic surgery as well as the MACRA RFI on patient relationship categories.
The Final Rule on MACRA is expected in the fall of 2016.

Medicare Site Neutral Payments

In addition, AAOS provided comments to the (1) US Senate Committee on Finance Chronic Care Workgroup on policy options for delivering and paying for chronic condition management and the (2) House Energy & Commerce Committee on the Medicare site-neutral payments issue.

CMS Position on Shoulder Coding Issues 

AAOS worked with CMS officials to successfully eliminate National Correct Coding Initiative (NCCI) edits for certain shoulder code pairs, arguing that the shoulder is technically three anatomic synovial joints and two articulations. The CMS policy had allowed the agency to deny payments when these procedures are performed or billed together. Specifically, their edits have denied CPT code 29823, Arthroscopic Shoulder Debridement, extensive, with several other arthroscopic shoulder procedures such as CPT code 29827, Arthroscopic Rotator Cuff Repair, or CPT code 29824, Arthroscopic Distal Claviculectomy.

CMS has shared a letter with the AAOS indicating that they will be remedying a shoulder coding issue after AAOS expressed concern about current coding practices.

CMS CY 2017 Payment System Rules 

AAOS submitted comments to the CMS on issues solicited and germane to the practice of orthopaedic surgery for the following proposed and final rules: CY 2017 Medicare Physician Fee Schedule (MPFS), CY 2017 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgery Center (ASC) Payment System Proposed Rule.

Global surgery codes in the 2017 MPFS

In the 2017 Medicare Physician Fee Schedule (MPFS) proposed rule, CMS outlined policies related to data collection of resources used in the provision of global services. Global services refer to services in the fee schedule with 010 or 090 day global periods. This proposal is in response to the Section 523(a) of the Medicare and CHIP Reauthorization Act (MACRA) of 2015 to not implement CMS’ previously announced policy to eliminate all 010 and 090 global periods and collect accurate data related to the resources utilized in these services starting January 1, 2017. CMS proposed a three-pronged approach to data collection:

  1. Claims-based reporting. Create eight G-codes that all providers would report in 10 minute intervals to capture inpatient, outpatient, office, and non-face-to-face post-operative patient encounters provided in a global period
  2. Conduct a survey of surgeons and providers who commonly perform global services
  3. Conduct field studies in a select number of sites with direct observation of practice patterns.

In response, AAOS commented that such an initiative is a great burden on physicians and practices who may need to report unpaid G-codes 20-50 times post-op in a 90 day global period. Such activities are likely to compromise patient care as time and resources are spent on reporting. Also, the burden will be greater on small practices. Consequently, higher reporting rated by larger (urban/suburban) practices may skew the resource use report. Further, typical services as defined by CMS may not be so ‘typical’ (see Table 10 in the proposed rule). This proposal exceeds Congressional intent in MACRA and CMS should review and revise their proposal.

AAOS attended a CMS Town Hall event and a webinar on the topic and AAOS is also conducting a parallel legislative advocacy action on this issue with the Surgical Coalition led by the American College of Surgeons.

TKA out of the IPO list in the 2017 OPPS 

CMS proposed to remove Total Knee Arthroplasty (TKA) from the Medicare Inpatient Only (IPO) List. AAOS joined AAHKS in commenting that all outpatient surgery centers may not be ready for that as yet since such a move would require very careful patient selection and infrastructure.

AAOS worked with AOSSM and the North Carolina Orthopaedic Association to oppose BCBS-NC policy on corticosteroid injections 

On September 1, 2016, AAOS sent a letter to several officials with the Blue Cross Blue Shield (BCBS) of North Carolina regarding a policy statement that they will not pay for corticosteroid injections for rotator cuff disease (and knee osteoarthritis), stating that it is “experimental.” In the letter, AAOS President Gerald R. Williams, Jr., MD expressed that this is a major issue for orthopaedic surgeons and the organizations representing them, and a number of groups have started gathering evidence against the policy. The voting panel for the AAOS Appropriate Use Criteria (AUC) on steroid injections for knee osteoarthritis recommended that across more than 500 scenarios, intraarticular corticosteroids were ‘appropriate’ for 73% of the population under study, ‘may be appropriate’ for 27% of the population, and ‘rarely appropriate’ for 0% of the population,” Dr. Williams wrote. “The lack of level one evidence does not undermine standard of care. Moreover, the AUC [Appropriate Use Criteria] on Rotator Cuff groups corticosteroids into a category called ‘non-operative treatment.’ In response, BCBS-NC noted that they received significant feedback from the local orthopaedic community since this policy was noticed and subsequently, “ have tabled the policy at this time.” AAOS is pleased with the BCBS decision and will continue to monitor this issue in North Carolina and other states. For more information, see BCBS Steroid Injections Policy.


The AAOS Medical Director met with CMS Acting Administrator, Andy Slavitt, regarding registries having access to Medicare claims data as directed under Section 105 (b) of MACRA and directing registries to use the Research Data Assistance Center (ResDAC) process which was insufficient and inconsistent.  As a result, CMS modified the regulations to allow Qualified Clinical Data Registries (QCDRs) to serve as Quasi-Qualified (QE) entities. In addition, AAOS has written to support CMS effort’s to expand how qualified entities may create non-public analyses and provide or sell such analyses to authorized users, as well as how qualified entities may provide or sell combined data, or provide Medicare claims data alone at no cost, to certain authorized users. The AAOS welcomes the expansion of the Qualified Entity (QE) program and also supports the implementation of certain privacy and security requirements, and imposed assessments on QE.

Additional advocacy initiatives resulted in HHS Office of Human Research Protection (OHRP) posting guidance documents on their website clarifying applicability of the Common Rule to clinical data registries. AAOS also obtained language in House Energy & Commerce legislation directing the HHS OHRP to post guidance on applicability of the Common Rule to clinical data registries. Furthermore, AAOS supported the establishment of the definition for the term “clinician-led clinical data registry” that was presented in the HELP Health IT Bipartisan Staff Discussion Draft.

Adding UDI to Claim Form

AAOS continues to work to compel the Centers for Medicare and Medicaid Services (CMS) to add data entry fields to Medicare, Medicaid and private insurance forms to capture Unique Identifier Numbers (UDI) for medical devices. AAOS Advocacy efforts resulted in a letter signed by both CMS Acting Administrator Andrew Slavitt and FDA Commissioner Robert Califf on July 13 to ASC X12 Insurance Committee, the entity responsible for data fields on insurance claim forms. CMS had previously opposed putting UDIs data fields on Medicare and Medicaid claim forms. ASC X12 is now working to develop solutions to report UDIs for high-risk implantable devices. AAOS continues to advocate for UDI on all insurance claim forms to improve patient safety and quality reporting.

Health Information Technology 

AAOS submitted comments on the proposed rule and final rule on Medicare and Medicaid Programs: Electronic Health Record Incentive Program for Stage 3 and Modifications to Meaningful Use in 2015 through 2017. AAOS shared the unique Health Information Technology (HIT) needs of surgical specialist and offered suggestions to improve the meaningful use criteria for stage 3 to better reflect the needs of our surgical specialists and their patients and accelerate HIT adoption in the future by orthopaedic surgeons. The AAOS noted that we are ready to work with CMS in establishing specialty specific meaningful use standards and performance measures for all orthopaedic treatment domains, as AAOS is actively engaged in the development of orthopaedic performance measures. Based on AAOS and other organizations efforts’, CMS reduced the 2015 reporting period from 365 days to 90 days. AAOS also provided comments to the Office of the National Coordinator (ONC) for Health Information Technology regarding assessing interoperability for MACRA.


AAOS secured representation on the AMA Task Force to Reduce Opioid Abuse and continues to develop opioid positions and advocacy efforts to combat the opioid epidemic. In early July 2016, CMS proposed to remove the HCAHPS survey pain management questions from the hospital payment scoring calculation, which comes as a big win for orthopedists.  

Graduate Medical Education 

AAOS introduced and successfully passed a resolution on Equity in Graduate Medical Education Funding at the AMA House of Delegates Interim Meeting in November 2015. Along with AAOS, the resolution was co-sponsored by Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, and American Orthopaedic Foot and Ankle Society. The resolution resolved that the AMA strongly advocate that there be no decreases in the current funding of MD and DO graduate medical education while there is a concurrent increase in funding of graduate medical education (GME) in other professions. In addition, that the AMA advocate that there be at least proportional increases in the current funding of MD and DO graduate medical education similar to increases in funding of GME in other professions.

Performance Measures

AAOS is very active in the performance measures arena. We have provided input to The Joint Commission (TJC) that addressed Total Hip and Total Knee Replacement (THKR) Performance Measures. In addition, the AAOS has provided feedback to the National Quality Forum (NQF) to improve their new Endorsement and Ratification Process. AAOS submitted comments on the RFI on the Reporting of Quality Measures Under CMS Programs and on Safe Use of Opioids - Concurrent Prescribing Measure Development and Maintenance.

Medical Devices

The Orthopaedic Device Forum continues to serve as an essential communication hub where industry, the Federal Drug Administration and AAOS convene to settle mutual issues which include the operationalization of the unique device identifier (UDI), custom device policies, and post market surveillance. Additionally, AAOS works continuously and closely with the FDA Network of Experts, a vetted network of outside scientists, clinicians, and engineers to broaden Center for Devices and Radiological Health (CDRH)’s exposure to scientific viewpoints.


AAOS continues to work on issues related to coding and reimbursement including the proposed National Correct Coding Edits (NCCI) procedure-to-procedure edits, the proposed CMS Medical Unlikely Edits, and issues related to ICD-10CM and ICD-10PCS. In addition, AAOS develops educational material in preparation for the 2016 ICD-10CM and ICD-10PCS implementation and updates to the Academy’s coding products such as the Global Service Data for Orthopaedic Surgery publication and Code-X.