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Published 12/1/2013
Matthew J. Twetten

CMS Releases 2014 Medicare Physician Fee Schedule Final Rule

Changes in work RVUs for TKA, THA will affect payments

On Wednesday, November 27, 2013, the Centers for Medicare and Medicaid Services (CMS) released the 2014 Medicare Physician Fee Schedule final rule. In addition to covering rules and regulations proposed for implementation in calendar year 2014, the rule includes Relative Value Units (RVU) for every procedure with a code in the current fee schedule.

Every year, CMS makes changes to the RVUs for procedures, including orthopaedic procedures, within the fee schedule. This year, the following four high-volume lower extremity orthopaedic procedures were reviewed and the RVUs either revised or left at their current value:

  • 27130—Arthroplasty, acetabular and proximal femoral prosthetic replacement (total hip arthroplasty [THA]), with or without autograft or allograft. The work RVU has been changed from 21.79 to 20.72, a decrease of 5 percent.
  • 27236—Open treatment of femoral fracture, proximal end, neck, internal fixation or prosthetic replacement. The work RVU remains the same at 17.60.
  • 27446—Arthroplasty, knee, condyle and plateau; medial OR lateral compartment. The work RVU has been changed from 16.38 to 17.48, an increase of 6.7 percent.
  • 27447—Arthroplasty, knee, condyle and plateau; medial AND lateral compartments with or without patella resurfacing (total knee arthroplasty [TKA]). The work RVU has been changed from 23.25 to 20.72, a decrease of 11 percent.

These new values will go into effect as of January 1, 2014.

Why the changes?
To be clear, this review was not initiated by either the American Association of Orthopaedic Surgeons (AAOS) or by the American Association of Hip and Knee Surgeons (AAHKS). Rather, CMS itself undertook the review as part of its periodic review of the values of high-volume and high-cost established procedures. The AAOS was asked to conduct member surveys on the amount of time and intensity required to deliver these services. The results of the survey were then used to calculate relative work RVUs.

The AAOS, in collaboration with the AAHKS, surveyed members about the procedures as requested. The results reflected current trends to reduce hospital length of stay and to accelerate rehabilitation. Procedure times also differed from previous estimates.

Although the survey results indicated a difference in procedure time, the AAOS and AAHKS pointed out that this was a function of the survey methodology, not a change in the actual work involved in performing the surgery.

AAOS and AAHKS recommended that CMS and the American Medical Association’s Multi-Specialty Relative Value Update Committee (RUC) make no change in work RVUs for THA (27130) and a small (4 percent) decrease in work RVUS for TKA. Although the RUC rejected these recommendations and proposed significant cuts in the work RVUs for both TKA and THA, CMS acknowledged the input from specialty societies and moderated the RUC’s recommendations, resulting in a far smaller decrease.

In addition, both the RUC and CMS accepted the AAOS and AAHKS recommendations on the treatment of hip fractures (27236) and unicompartmental knee arthroplasty (27446).

“Although we are disappointed with the devaluation of procedures that we know provide tremendous value to the individual patient and to society (See “What is the Societal Value of TKA?” AAOS Now, September 2013), and that CMS did not use the values recommended by AAOS and AAHKS,” said AAOS President Joshua J. Jacobs, MD, “we are pleased that CMS responded to our extensive regulatory and legislative advocacy efforts to alter the RUC’s recommendation of far deeper cuts. AAOS and AAHKS continue to strongly believe the AAOS/AAHKS recommended values are the correct RVUs for these procedures.”

Both AAOS and AAHKS have argued that the survey methodology is not a valid statistical measurement and is likely to produce flawed data (something that has been verified by independent reviews of survey times compared to other sources). Health economists and other experts also object to the reliance on survey data, and even Congress, in draft legislation to replace the sustainable growth rate formula, has directed CMS to investigate more reliable sources of time.

In fact, CMS’s own data collected on anesthesia time for these procedures indicate that procedures times for THA and TKA have not drastically changed between 2005 and 2012. These data provide additional evidence that the survey results were misleading or incorrect. In the opinion of AAOS and AAHKS, CMS should not take such drastic action based on less-than-reliable evidence of changes in the work being performed.

AAOS, AAHKS efforts
Of particular concern is that CMS did not publish the new values in the July 2013 Physician Fee Schedule Proposed Rule, but waited until publication of the Final Rule to release the values. AAOS and AAHKS believe that CMS has an obligation, as a public agency, to solicit and consider stakeholder and public feedback prior to implementing major policy changes such as these. However, CMS choose to ignore requests by AAOS and AAHKS to publish the values earlier, which would have allowed for public comment and input.

AAOS President Joshua J. Jacobs, MD, along with AAHKS President Thomas Fehring, MD, others in the AAOS and AAHKS leadership ranks, AAOS staff in the office of government relations, and AAOS and AAHKS outside counsel, attended meetings with CMS officials in April, June, and August, 2013. In addition, Dr. Jacobs met with many members of Congress—in both the House of Representatives and the Senate—to discuss the issue and the concerns of the orthopaedic community.

AAOS and AAHKS also worked with both Republican and Democratic members of Congress to contact CMS officials. Dozens of letters from members of Congress were sent to both CMS administrator Marilyn Tavenner and other CMS officials, asking them to reconsider the recommended reductions. Additionally, patients themselves—those who will be affected most by these rulings—sent thousands of letters and emails to their legislators and Director Tavenner encouraging them to consider the consequence these rulings may have on access.

AAOS and AAHKS worked closely with several leading outside experts to develop regulatory and legislative strategies in an effort to convince CMS to accept the values recommended by the orthopaedic community. In addition, AAOS and AAHKS leaders have dedicated hundreds of hours to developing materials and to meeting with CMS and RUC officials. These efforts will continue to bring pressure on CMS to change its values and accept the values proposed by AAOS and AAHKS.

Next steps
These changes will be of significant impact for many surgeons and, more importantly, to Medicare patients with painful, mobility-limiting orthopaedic conditions that could be helped by these procedures. These patients now face the potential of having less access to these highly valuable and successful surgeries. Implementation of the CMS values will be a significant setback for the collective health of Medicare beneficiaries. In addition, they might have unintended consequences for society, based on recent studies showing the cost-effectiveness of TKA. (See “
What Is the Societal Value of TKA?AAOS Now, September 2013.)

It is critical that all interested parties take advantage of the open comment period to provide written comments to CMS between now and Dec. 31, 2013. AAOS members are also urged to contact their Congressional representatives and urge them to force CMS to accept the AAOS and AAHKS recommended values.

The AAOS will submit extensive comments to CMS on this final rule and will be developing a regulatory advocacy plan. AAOS members will be contacted by email and should watch for information on resources and contacts at CMS and in Congress. This information will be available on both the AAOS website (www.aaos.org) and the AAHKS website (www.aahks.org)

Matthew Twetten is the senior manager policy and medical affairs in the AAOS office of government relations. Questions can be directed to twetten@aaos.org

Read the entire rule…http://www.ofr.gov/OFRUpload/OFRData/2013-28696_PI.pdf