In the 2015 Physician Fee Schedule (PFS) Final Rule, released Oct. 31, 2014, the Centers for Medicare and Medicaid Services (CMS) confirmed its intention to convert all 10- and 90-day global procedure codes to 0-day global codes.

According to the Final Rule, CMS believes “it is critical that the relative value units (RVUs) under the PFS be based as closely and accurately as possible on the actual resources involved in furnishing the typical occurrence of specific services.”

Global payments for procedures
The use of bundled (global) payments for procedural services has been in effect for Medicare services since 1992. As the scope and volume of services expanded, global payments were developed to provide administrative simplification, eliminating the need to submit a claim for each postoperative visit. The global payments were also part of an overarching plan to establish a uniform fee schedule for all Medicare patients.

Bundled payment for a procedure includes reimbursement for the following:

• preprocedure services that occur prior to surgery, such as evaluation (within 24 hours of surgery), patient positioning, and scrub, dress, and wait time
• intra-service work covering the surgery itself, “skin-to-skin”
• postprocedure services, which are further defined as immediate, facility, and office postservices. (Immediate postservice—the time a physician spends in the operating room with the patient after finishing the procedure; facility postservice—the number of evaluation and management [E&M] visits conducted by the physician in the hospital facility prior to discharge. Many services will have no facility postservice time or will only include a discharge visit time. Office postservice—the number of E&M visits conducted in the office or outpatient facility subsequent to discharge.)

CMS has stated its intention to retain global bundles for surgical services, but to refine bundles by transforming all 10- and 90-day global codes to 0-day codes over the next few years. Reimbursement for postoperative visits would be removed from the global payments to physicians. After this transition, all medically reasonable and necessary visits would be billed individually and separately during the postoperative period, outside of the day of the surgical procedure.

CMS proposes to make this transition in two stages due to the time required to revalue codes: Current 10-day global codes would end in 2017 and current 90-day global codes would end in 2018, pending the availability of data on which to base updated values for the global codes.

The impetus for change
The current global packages have several problems, according to CMS. For example, the nature of postoperative visits has changed since global surgical packages were developed in 1992, and the global packages have not kept up with current medical practice.

CMS also notes that payment rates for global packages have not been updated on a regular basis and that packages are not based on actual costs. The PFS does not include separate values for the procedure and the follow-up care, making it difficult to estimate the costs of the individual global code component services.

CMS points out that under the global surgery packages, Medicare pays practitioners for E&M services during postsurgery periods, regardless of whether the services are actually furnished. However, practitioners who do not perform procedures covered by global payments are paid only for the E&M services they actually furnish. This is interpreted as giving preferential treatment to proceduralists over primary care specialists.

The Office of the Inspector General (OIG) has examined postoperative visits in the global period in two small studies. In 2005, an OIG report based on 300 cases involving eye and ocular adnexa global surgery fees found that, in about two-thirds of the sampled claims, surgeons furnished fewer E&M services during the postoperative period than were included in the global surgical package payment for each procedure.

Similarly, in 2012, the OIG released a report on musculoskeletal global surgery fees. Based on a sampling of 300 musculoskeletal global surgeries, OIG found that, in the majority of cases, physicians furnished fewer E&M services than were included in the global period payment for that service. Although a total of 1,776 E&M services were included in the global surgery fees for these surgeries, physicians provided just 1,427 E&M services.

Both the 2005 and the 2012 reports concluded that the RVUs for these global surgical packages were too high because they include more E&M services than were typically furnished within the global period for the reviewed procedures.

Problems with revaluing codes
Since 1992, values for all procedure and E&M codes have been based on the results of either the Harvard Survey or a survey conducted by the American Medical Association’s (AMA) Relative Value Scale Update Committee (RUC). The RVU values are published in the PFS and the dollar value of each for Medicare patients is established by a multiplier determined each year by CMS.

Some services with global periods have been valued using a “building block” method. The work RVUs of the surgical procedure itself are added to all pre- and postoperative E&M services included in the global period. Revaluing these codes to a 0-day global payment may be achieved by subtracting the postoperative visits from the 10- or 90-day global value. This appears to be fair and technically sound.

However, for some procedures, the total work RVUs for surgical procedures and postoperative visits in global periods have been estimated as a single value, without any explicit correlation to the time and intensity values for the individual service components. This process has been used by the AMA’s RUC, based on surveys of physicians who estimate the value of the packaged services. Simply subtracting the postoperative visits from a 10- or 90-day global period to value a corresponding 0-day global may not be possible for codes valued by this “magnitude estimation” method. (See “Pluses and Minuses in Revaluing Codes.”)

With some codes, subtracting the value of the postoperative visits from the whole global package may actually result in a negative RVU total. These procedures would clearly need a more thoughtful means of revaluation.

According to the RUC, the PFS has more than 4,200 services with either 10- or 90-day global periods. This is a huge number of services that would have to be revalued in a relatively short period. CMS has acknowledged the difficulty, and is considering a wide range of approaches to revaluation of the global services and appropriate coding for postoperative care.

Potential unintended consequences
This action may not only create access-to-care problems for patients; it may also result in an increased financial burden for patients. Postoperative patients may be less likely to keep follow-up visits for medically necessary and appropriate care if they have a substantial financial copayment responsibility. The rate of complications may rise and outcomes may suffer if patients do not return for needed postoperative care.

Providers will have an additional requirement to bill separately for each postoperative visit—whether in the hospital or in the office. Adding to this administrative burden will be the need to document “medical necessity” for each postoperative visit. This results in an additional increment of work for each postoperative visit.

Physician practices that make budgeting decisions based upon a predicted number of procedures and the full global reimbursement may find that their predictions are unreliable, because the exact number of postoperative visits will be unknown.

Currently, procedural modifiers -50 and -51 are used when multiple procedures with duplicative postoperative services are performed at the same time. If all codes are 0-day global, the amount of duplicative preoperative work would be unclear. New multiple-procedure modifiers may need to be developed.

Impact for orthopaedics
Individual practices must find a way to document and charge for each postoperative visit in the hospital (including discharge day management) and each subsequent outpatient visit. Medical necessity for each visit must be specified. Patients must be convinced of the necessity to return for postoperative visits—even if there is a required copayment fee.

Revaluing all the procedure codes that currently have 90- and 10-day global periods will require a great deal of administrative work. This effort will likely be coordinated over the next few years by CMS, the AMA, and the relevant specialty societies—including the AAOS and orthopaedic specialty societies.

The AAOS is already working on this issue and has submitted comments on both the proposed and the final rule. The AAOS will continue to be engaged with both CMS and members of Congress as these changes unfold. The AAOS has made a significant effort to educate members of Congress on the implementation and patient care challenges such a policy would create. As a result, the report that accompanied the recently passed Appropriations Act of 2014 includes language that sends a strong signal to CMS that Congress is aware of the challenges the agency faces in testing and applying correct methodology to execute this drastic change in policy. In addition, the language mirrors AAOS concerns about the impact to patient care and access

R. Dale Blasier, MD, chairs the AAOS Coding, Coverage, and Reimbursement Committee. He can be reached at blasierrobertd@uams.edu

Bottom Line

• CMS intends to convert all 10- and 90-day global procedure codes to 0-day global codes.
• Current 10-day global codes would end in 2017 and current 90-day global codes would end in 2018.
• All current 10-day and 90-day global codes would have to be revalued.
• AAOS has expressed its concern that such a move could increase administrative costs without changing the quality of physician services.