AAOS Now

Published 7/1/2016
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Douglas W. Lundy, MD, MBA; Thomas C. Barber, MD

Acronyms 101: Sifting Through Alphabet Soup, Part 4

Part Four: Bundled Payments

In this our final article on healthcare policy acronyms, we address the acronyms and abbreviations seen in bundled payments and various practice-related terms. We understand that more could certainly be written on acronyms, but we believe that our four-part series has covered the most commonly used terms. As the MACRA legislation continues to unfold, there will undoubtedly be further proliferation of acronyms in the healthcare policy conversation.

BP: Bundled Payment
BPs are one of the alternative payment models that the Centers for Medicare & Medicaid Services (CMS) would like to see thrive in the healthcare arena. In their simplest form, bundled payments are a contract between the healthcare provider or system and the patient or payer. The healthcare provider guarantees the cost associated with the episode of care and assumes a certain degree of risk in that the expense of the patient's care could exceed the BP. The payer would then presumably identify the provider as "preferred."

MS-DRG: Medical Severity Diagnosis-Related Group
Diagnosis-related group (DRG) is a system that was first introduced in 1980; it classifies inpatient hospital cases. DRG is used to define the episode of care around a certain diagnosis. MS-DRG is specifically the DRG system used by Medicare. Orthopaedic surgeons are often confused by this terminology when the talk is with hospital administrators. The hospital considers a total knee arthroplasty an MS-DRG 470 (Major Joint Replacement or Reattachment of Lower Extremity without Major Complications or Comorbidities), whereas orthopaedic surgeons think of it as CPT code 27447.

BPCI: Bundled Payments for Care Improvement
BPCI is a CMS-driven, voluntary, bundled payment program developed by the Center for Medicare & Medicaid Innovation (CMMI). These bundles comprise several DRGs that are related to orthopaedic surgery, including total knee and hip arthroplasty as well as upper and lower extremity fractures. There are four different models within BPCI. Model 1 is limited to the inpatient care episode. Models 2 and 3 are similar in that the payment is retrospectively compared to a target price for the episode of care. Model 2 includes the inpatient stay and the following 90 days, whereas Model 3 only includes the episode after discharge from the inpatient facility. Model 4 is a prospective payment that is divided among all of the providers (hospital, physicians, skilled nursing facility, etc.) during the episode of care.

CJR: Comprehensive Care for Joint Replacement
CJR is a CMS-driven 5-year mandatory bundled payment program specifically for total hip and knee arthroplasty. This program was launched on April 1, 2016, in 67 Metropolitan Statistical Areas (MSAs) across the United States. This bundle applies to DRG 469 (Major Joint Replacement or Reattachment of Lower Extremity with Major Complications or Comorbidities) and DRG 470 (Major Joint Replacement or Reattachment of Lower Extremity without Major Complications or Comorbidities) from the initial inpatient admission until 90 days postdischarge. The target price for these participants is reset every year. All participants in these affected MSAs are required to participate in CJR unless they are enrolled in BPCI Models 1, 2, or 4.

IPPS: Inpatient Prospective Payment System
The IPPS determines how much inpatient acute care hospitals are paid for certain cases. These cases are classified into DRGs. The dollar amount that is designated per each DRG is dependent on labor and nonlabor factors. If a hospital cares for an increased number of low-income patients, it is eligible for additional funding for each DRG. These additional payments are known as DSH (disproportionate share hospital) subsidies.

TP: Target Price
The TP is the cost that the insurer sets as the goal that the providers are aspiring to beat. In most bundled payments, the surgeon is positioned to receive incentive payments if he or she provides care that is less expensive than the TP. Likewise, the surgeon will not receive an incentive payment if the cost of care is greater than the TP.

MSA: Metropolitan Statistical Area
MSA became common parlance to orthopaedic surgeons when the CJR bundle was popularized. An MSA is typically a city with a large population and surrounding suburbs that are economically linked to the city. Atlanta and Chicago are examples of MSAs, having a reasonably clear boundary around the surrounding areas that support the city center. Minneapolis-St. Paul is an example of an MSA that contains two population centers with the surrounding suburbs. CJR enforced its pricing structure throughout specific MSAs so that an entire community is included in the bundle rather than the strict boundaries of an incorporated metropolis.

ACE: Acute Care Episode
ACE is a term used by CMS that defines the actual period of care that is included in the payment. The ACE was the subject of demonstration projects by CMMI in 2009 and 2010. The ACE defines exactly when the care delivered is included in the bundled payment and when the care under the bundle is complete.

CPT: Current Procedural Terminology
Copyright to the CPT is owned by the American Medical Association, and it is the accepted system of coding and classifying medical, surgical, and diagnostic services. There are three types of codes in CPT, but clinical orthopaedic surgeons only use Category I. Most musculoskeletal procedural codes are between 20000 and 29999. These are the codes that orthopaedic surgeons submit to Medicare and other insurers for payment of services.

ICD-10-CM: International Classification of Diseases, 10th Revision, Clinical Modification
ICD-10-CM, which is owned by the World Health Organization, is a listing of 14,400 human diseases and conditions that can be subclassified into more than 16,000 codes. Although ICD-10 was established in 1992, the U.S. healthcare system was using its predecessor, ICD-9, until October 2015. Most diseases affecting the musculoskeletal system are found in Chapter VIII and include codes M00 through M99. ICD-10 is very granular, and many conditions are classified with seven alphanumeric identifiers.

NPI: National Provider Identifier
CMS started assigning NPI numbers to providers in 2006 as mandated by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). A physician's NPI is a 10-digit number that replaced the previously used Unique Physician Identification Number. HIPAA mandated that all electronic submission of claims had to be done with the provider's NPI. The NPI covers more than physicians; dentists, therapists, pharmacists, chiropractors, hospitals, home health agencies, and many other entities are required to have an NPI. A specific NPI is validated through a mathematical process known as the Luhn algorithm that incorporates a check digit to detect errors.

TIN: Taxpayer Identification Number
TIN is somewhat misused in the medical community in that an individual's social security number is also a TIN. When most physicians use TIN, they are actually referring to the Employer Identification Number (EIN). This number is extremely important because the physician's billing process requires it. When orthopaedic groups merge, they speak of "coming under the same TIN." An entity requires an EIN in order to file a federal tax return.

eCQM: Electronic Clinical Quality Measure
eCQMs are measures of quality that can be pulled from existing electronic systems. These are easier to report and monitor and are often preferred by Medicare.

MU: Meaningful Use
MU is being sunsetted and will henceforth be called the Medicare Electronic Health Records Incentive System. This is the program established to incentivize physicians and providers to adopt electronic medical records (EMRs). The program sets goals that are meant to ensure that a physician not only adopts EMRs, but uses them effectively.

Douglas W. Lundy, MD, MBA, is treasurer of the AAOS Orthopaedic PAC and copresident of Resurgens Orthopaedics in Atlanta. Thomas C. Barber, MD, is chair of the AAOS Council on Advocacy and a total joint surgeon in Oakland, Calif. Both are members of the AAOS Now editorial board.