Published 10/1/2015
Elizabeth Fassbender; Jennifer Hersh

AAOS Urges Changes to 2016 Fee Schedule

On Sept. 8, 2015, the American Association of Orthopaedic Surgeons (AAOS) submitted comments to the Centers for Medicare and Medicaid Services (CMS) on two important proposed rules that address payment policies under Medicare. In both cases, the AAOS recommended significant changes to address concerns by the orthopaedic community about the impact of the proposed rules.

AAOS comments on the proposed 2016 physician fee schedule (PFS) addressed new policies and potential changes related to the implementation of a Merit-based Incentive Payment System (MIPS) and issues surrounding coding for orthopaedic services. In addition, the AAOS urged CMS to make significant changes to its proposed Comprehensive Care for Joint Replacement program that tests bundled payment and quality measures for an episode of care associated with hip and knee replacements.

Medicare Physician Fee Schedule
Most of the provisions in the 2016 PFS proposed rule, which pays for services furnished by physicians and other practitioners in all sites of services, go into effect on Jan. 1, 2016. However, CMS also included several new policies and requested feedback for future implementation.

The proposed rule finalizes changes to the quality reporting initiatives associated with PFS payments. These include the Physician Quality Reporting System (PQRS) and the Physician Value-Based Payment Modifier. For the 2018 PQRS payment adjustment, it outlines the steps necessary for satisfactory reporting of individual quality measures via claims and registries.

The proposed rule also suggests changes to the Electronic Health Record (EHR) Incentive Program and the Physician Compare website. For example, CMS seeks comments on the possibility of including Open Payments data on individual physician profile pages on the Physician Compare website.

“Among other things, this proposed rule takes important steps to align various physician payment, efficiency, and quality improvement reporting programs to reduce the burden on eligible professionals and group practices that participate in those programs,” stated David D. Teuscher, MD, AAOS president. “Improvements and increased flexibilities should encourage more widespread physician participation in Medicare quality measure improvement programs. However, some suggestions in the proposed rule—like that to combine the Physician Compare website and Open Payment data—could cause confusion among patients and impede their ability to select a healthcare provider.”

Importantly, this is also the first PFS proposed rule since the repeal of the sustainable growth rate (SGR) formula. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which repealed the SGR, also required the implementation of a merit-based incentive payment system. The proposed rule begins that implementation process.

In its response to the rule, the AAOS emphasized that it is critical for CMS to work closely with medical societies and other key stakeholders in developing the MIPS system. “As CMS prepares to implement the recently-passed MACRA legislation, the agency must work closely with AAOS and other specialty societies and should provide information on its policies to implement the MIPS program prior to the release of the 2017 Medicare PFS proposed rule,” wrote Dr. Teuscher.

Code valuations
The proposed rule also included provisions that would affect the relative value units (RVUs) for specific services and procedures. In particular, the proposed rule covered the following:

  • valuing new, revised, and potentially misvalued codes
  • relative value adjustments for misvalued services
  • valuation of specific codes relevant to orthopaedic surgery/practice

CMS is proposing to change the review and stakeholder input process for suggested changes to RVUs. Specifically, CMS wants to publish all proposed changes in the summer proposed rule, a significant and beneficial change from the previous process. In the past, CMS would propose new or updated values in the final rule, which provided no time for stakeholder input prior to implementation. AAOS has long advocated for similar changes in previous meetings with and comments to CMS and supports this shift in announcement timing.

CMS also recommended updated proposed values for some orthopaedic-related services. The codes reviewed in the proposed rule were CPT code 20240, Open bone biopsy, superficial; and a series of spinal instability x-ray codes. For CPT code 20240, CMS changed the global period from 90 days to 0 days, a change that AAOS supports.

However, CMS also proposed a work RVU of 2.61 for CPT code 20240, which is considerably lower than the 3.71 work RVU recommendation from the AAOS and the AMA/Multi-specialty Relative Value Update Committee (RUC). In its comment letter, the AAOS disagreed with the CMS proposed value and supported the RUC’s recommendation.

Similarly, CMS disagreed with the work RVUs recommendation from the AAOS and the RUC for the four spinal instability x-ray codes and proposed lower levels. The AAOS comment letter supports using the RUC’s recommended values.

Bundled payment model
In July, CMS released a proposed rule that would test bundled payment and quality measures for an episode of care associated with hip and knee replacements in 75 geographic areas (
Table 1). The new payment model would affect approximately 800 hospitals and more than 100,000 procedures annually. The program is scheduled to go into effect in January 2016. (See “Are Bundled Payments Here to Stay?” AAOS Now, August 2015.)

“The AAOS supports efforts by CMS to make appropriately structured alternative payment models available to physicians and other providers, including bundled and episode payment models,” states Dr. Teuscher in the comment letter. “In fact, many AAOS members have been leaders in developing, implementing, and evaluating episode of care payments. However, the AAOS has multiple concerns about the proposed rule and we urge CMS to strongly consider significant changes to the program as proposed.”

The AAOS comment letter outlines the following concerns with the proposal:

  • mandatory participation of all hospitals located in any of the 75 designated areas—In effect, all surgeons, providers, facilities, and other parties providing care related to hip or knee replacement procedures in any one of these designated areas must participate in the program.
  • the immediate and full implementation of the proposal beginning Jan. 1, 2016—This provides insufficient time for care providers to work out the provision of care and cost-sharing arrangements necessary for a successful bundled payment initiative.
  • a lack of designated physician leadership for episodes of care
  • the lack of infrastructure support from CMS necessary to properly administer and undertake the proposed changes
  • the absence of risk-adjustment in the program
  • inappropriate conditions included in the proposed episodes of care (such as hip replacement for hip fracture patients)
  • inappropriate proposed patient-reported outcome tools and risk variables.
  • the retrospective episode payment methodology
  • insufficient patient protections and incentives

AAOS strongly urged CMS to revise the mandatory nature of the proposal and instead create incentives for interested participants that would reward innovation and high-quality patient care. Specifically, AAOS recommended that CMS require any participating entity to have verifiable interoperability, infrastructure, and agreements between all necessary entities.

AAOS also addressed the immediate and full implementation of the program, stating that the 60 days between the deadline for comments on the final rule and implementation is far too brief to properly implement and transition into this model.

“Full scale implementation within 60 days of final rule publication of a mandatory bundled payment model is unrealistic and likely to cause disruption in normal patient access to care patterns, potentially causing financial harm to physicians and facilities,” Dr. Teuscher stated. “A gradual transition from a voluntary to mandatory program would be more realistic and provide ample time for assessing coordination, developing clinical pathways, and executing legal agreements between physician groups and managers of facilities.”

Further, AAOS highlighted that a number of additional factors, including ICD-10 and meaningful use barriers, are likely to add to the difficulty in implementing a mandatory model. As stated in the comment letter, providers continue to require the following:

  • better analytics and support
  • tools for best practices and ease of reporting
  • validated patient risk assessment measures
  • data sharing with physicians through required transparency by hospitals and payers

Although CMS has made progress in some of these areas, it needs to do more before it adds programs that require additional infrastructure investment and development.

“Infrastructural support is incomplete, meaningful use attestation is at 18 percent for physicians and 48 percent for hospitals, and EHR vendors have plagued practices with a lack of interoperability and errors in the 2014 PQRS program. Until these glitches are addressed and highly reliable systems are in place, no further mandates should be initiated,” wrote Dr. Teuscher.

Continued efforts
In short, although efforts by CMS to administer and improve payment systems while improving the quality of and increasing access to care for patients are commendable, AAOS believes that significant changes to both proposed rules are needed. In addition to the submitted comments, the AAOS Council on Advocacy, chaired by Thomas C. Barber, MD, met with members of Congress last month to discuss changes to the bundled payment model and related concerns with the CMS meaningful use program. Dr. Barber, together with Alexandra (Alexe) Page, MD, also hosted a roundtable to talk about the issues with press and other influencers in Washington, D.C. Finally, on Sept. 29, 2015, AAOS held a webinar, directed by Craig Mahoney, MD, discussing the proposed bundled payment program.

For ongoing updates, follow the AAOS office of government relations on twitter at @AAOSAdvocacy and watch for coverage in the Advocacy Now enewsletter.

Elizabeth Fassbender is the communications manager, and Jennifer Hersh is the manager, payment policy, in the AAOS office of government relations.

Additional Information:
Council on Advocacy video