Published 11/1/2017
Dena McDonough, PA-C, MHCDS

AAOS Responds to Medicare Rulemaking in 2018

AAOS office of government relations is optimistic the rules will offer regulatory relief

In recent months, the U.S. Centers for Medicare & Medicaid Services (CMS) has released four proposed rules and finalized a fifth. While each rule has a particular focus, there were recurring issues about which rules CMS solicited stakeholder input.

CMS issued a broad request for guidance on how to relieve the regulatory burden that has heavily impacted physician practice. The current requirements are largely unsustainable, particularly for small, solo, and rural practices. These practices are the most vulnerable to the resource-intensive changes required for continued participation in Medicare.

In addition to a request for information (RFI) on healthcare flexibilities and efficiencies, CMS sought feedback on how to address social factors in risk stratification and how to incentivize participation in quality programs.

Below are some highlights from each rule and corresponding comments from AAOS.

Quality Payment Program Year 2 Proposed Rule
The most notable changes in this proposed rule were the added flexibilities for small and solo practices throughout the program. These measures included participation exemptions, bonus points, reporting concessions, and hardship. CMS proposed a dramatic increase to the low-volume threshold, which would exclude an additional 134,000 clinicians from mandatory Merit-based Incentive Payment System (MIPS) enrollment, while continuing to allow voluntary participation.

CMS continues to seek other ways to ease the burdens placed on rural practices, which were largely unaffected by the proposed threshold change. For example, proposed new regulations on virtual groups seek to address the needs of rural and small practices. Small practices (solo practitioners or groups of 10 or fewer clinicians) would be allowed to form virtual groups, without geographic restriction, to ease reporting requirements and increase opportunities within the Quality Payment Program (QPP) payment structure. CMS fell short, however, in addressing the logistics for implementing this model. The AAOS commented that the complexity of creating a virtual group and significant resource costs (eg, technology, third-party reporting) may preclude the very practices it is meant to aid.

The AAOS also strongly advocated to CMS against the required use of 2015 Certified Electronic Health Record Technology (CEHRT). In this rule, not only has CMS responded by proposing to allow hardship exceptions for small and rural practices, it has proposed a bonus for 2015 CEHRT use in 2018. Additionally, the AAOS urged CMS to implement the laws requiring provision of real-time claims data and tackling the issues of data blocking and interoperability of electronic health records.

In 2017, the inaugural year of the QPP, the MIPS cost category is weighted at 0 percent. CMS had originally planned a step-wise increase to 10 percent for 2018. The AAOS pressed CMS to further delay incorporating the cost category until CMS devises a way to accurately measure resource use and attribute costs. CMS responded by proposing to keep cost weighted at zero in 2018, However, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) statutorily requires a 30 percent weight designation in 2019, and the AAOS will continue to lobby Congress for legislative fixes.

2018 Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems Proposed Rule
CMS asked for comment on whether total knee arthroplasty and total hip arthroplasty procedures could be removed from the Inpatient Only List and added to the Ambulatory Surgical Center-eligible procedures list. The AAOS supports the move, with certain contingencies. The determination of the appropriate site of care should fall under the purview of the patient-surgeon relationship, as these are the individuals who shoulder the risk of these procedures. This decision must be based on clear criteria for surgical site selection and shared decision making. Furthermore, the AAOS asked that this change be explicitly stated in the final rule. The AAOS proposed similar considerations for total shoulder arthroplasty and total ankle arthroplasty (TAA).

This rule also proposes to implement, in 2018, another MACRA statute requiring that CMS reduce payments furnished for computed radiography (CR) services. CMS favors the newer digital radiography (DR) systems. DR systems do not require the photo-stimulated luminescence screens contained in CR cassettes. Rather, DR systems use a flat panel with a detection layer deposited over an active matrix of thin film transistors and photodiodes. By incorporating image processing into the acquisition cycle, DR systems are faster and offer higher radiation dose efficiency. Unfortunately, they can cost tens to hundreds of thousands of dollars. The AAOS believes that its providers improve access and offer convenience to patients and should not be penalized for an inability to make these high fixed-cost investments. The AAOS also asked that the additional burden of the proposed modifier requirement for those using CR should instead fall to the provider using digital radiography.

EPM cancellation and changes to CJR Proposed Rule
Over the last few years, the AAOS has strongly advocated for voluntary participation in the Comprehensive Care for Joint Replacement (CJR) and Surgical Hip Femur Fracture Treatment (SHFFT) models. In effect, because of the mandatory nature of these models, many surgeons and facilities that lack familiarity, experience, and proper infrastructure to support care redesign efforts would be forced into these bundled payment models. Further, the AAOS maintained that the SHFFT model was inherently flawed, due to the heterogeneity of the patient cohort (eg, fragility fracture versus traumatic injury). CMS recently responded to this feedback by cancelling the SHFFT Episode Payment Models (EPM) and has proposed to make CJR largely voluntary. The proposal would allow voluntary CJR participation for all providers in 33 of the 67 Metropolitan Statistical Areas (MSAs). In addition, low-volume and rural facilities would participate voluntarily in all 67 designated MSAs. The AAOS continues to utilize all advocacy options to make all payments models entirely voluntary with surgeons as head/co-head of the models.

2018 Medicare Physician Fee Schedule Proposed Rule
The AAOS also addressed several annual updates contained in the proposed rule. For one of the six sets of Current Procedural Terminology (CPT) codes for musculoskeletal services with new or updated Relative Value Unit (RVU) settings, CMS proposed lower RVUs than those recommended by the American Medical Association/Multi-specialty Relative Value Update Committee (RUC). CMS proposed different values for the CPT codes for nerve repair with allograft procedures (see Table 1). The AAOS supported adoption of the RVU recommendations submitted to CMS from the RUC for all six sets of musculoskeletal services.

In addition to the specific code RVUs, the AAOS also commented in support of a multi-stakeholder effort to update documentation guidelines for Evaluation and Management services. CMS last updated these guidelines in 1997 and the AAOS will actively participate in the update process should CMS choose to proceed.

The AAOS was also supportive of the CMS proposals in the Medicare Physician Fee Schedule to fully align CMS quality programs like the Physician Quality Reporting System (PQRS), Meaningful Use (MU), and the resource Value-Based Modifier (VBM). As previously noted, these programs now compose three of the four categories of measurement under the QPP MIPS but the legacy programs (PQRS, MU and VBM) remain in effect for CY 2018. The proposed rule called for retroactively meeting minimum thresholds for positive or neutral payment adjustments for FY 2016 that will match the thresholds under QPP MIPS. The AAOS was supportive of this proposal because it will make it easier for physicians to get positive or neutral payment adjustments in 2018.

2018 Inpatient Prospective Payment System Final Rule
The AAOS advocated for higher reimbursement for TAA by reassignment from MS-DRG 470 "Major Joint Replacement or Reattachment of Lower Extremity without Major Complications or Comorbidities (MCC)" to MS-DRG 469 "Major Joint Replacement or Reattachment of Lower Extremity with MCC." CMS then compared claims data and determined that TAA required greater resources and had significantly higher costs than the other procedures within MS-DRG 470. The average cost of a TAA procedure ($20,862) was $6,111 higher than for all cases with the MS-DRG 470 ($14,751). Based on that analysis, CMS agreed to payment of all TAAs at the MS-DRG 469 rate.

In this rule, CMS released an RFI on physician-owned hospitals (POHs), which have been shown to provide higher quality care at lower cost compared with those run by nonphysicians or appointed boards. The AAOS has encouraged the secretary of Health and Human Services to explore all regulatory avenues to lift the arbitrary ban on new and expanding POHs.

Next steps
There is not always a linear relationship between proposed and final rules. That is, comments provided for one rule may affect changes in other areas of the Medicare payment system. For this reason, the AAOS takes every opportunity to submit comments on each of these issues. Based on the fact that CMS has already responded to many of AAOS' concerns and, in some instances, quoted its comment letters in explaining regulatory change, the AAOS office of government relations is optimistic that the finalized rules will offer much needed regulatory relief.

Dena McDonough, PA-C, MHCDS, is a payment policy manager in the AAOS office of government relations. She can be reached at mcdonough@aaos.org.