The American Association of Orthopaedic Surgeons (AAOS)—along with the American Association of Hip and Knee Surgeons (AAHKS), The Hip Society, and The Knee Society—responded in support of removing total hip arthroplasty and total knee arthroplasty from the IPO with contingencies, which are highlighted in the accompanying article.
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AAOS Now

Published 2/1/2018
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Wilford K. Gibson, MD, FACS, FAOA, FAAOS; Dena McDonough, PA-C, MHCDS; Shreyasi Deb, PhD, MBA

TKAs and the IPO List: Will Anything Change?

Late last summer, the U.S. Centers for Medicare & Medicaid Services (CMS) proposed removing total knee arthroplasty (TKA) from the list of procedures typically performed on an inpatient only (IPO) basis. CMS also sought comments on whether partial and total hip arthroplasty (THA) should be removed from the IPO list.

The American Association of Orthopaedic Surgeons (AAOS)—along with the American Association of Hip and Knee Surgeons (AAHKS), The Hip Society, and The Knee Society—responded in support of removing THA and TKA from the IPO with the following contingencies:

  • CMS must defer to the surgeon and patient with regard to the most appropriate surgical venue.
  • Outcomes measures currently under development at AAOS should be used to create clear criteria for determining the clinical acceptability of performing TKA as an outpatient procedure.
  • Data collection is necessary for developing adequate risk adjustment for all arthroplasty procedures, regardless of the surgical setting.
  • Outpatient TKA is appropriate only for carefully selected patients and should not be equated with unicondylar knee arthroplasty.
  • Data should be collected for 1 to 2 years on TKAs performed in the Hospital Outpatient Department (HOPD) setting before considering the move to the Ambulatory Surgery Center (ASC) setting.
  • The Bundle Payment Care Initiative (BPCI) Model 2 should be updated to account for the shift of lower cost episodes to the outpatient setting.
  • Payments for TKA and THA should remain site neutral, because the surgical procedure itself will be unchanged.

In its final rule, published in November 2017, CMS removed TKAs from the IPO list. However, other arthroplasty procedures, including THA, are still on the list.

Getting to this position
Historically, the house of ortho­paedics has been divided on the issue of arthroplasties as inpatient-only procedures. Previously, the AAOS Board of Directors voted to keep TKA and THA on the IPO list, placing patient safety as paramount.

More recently, increased experience with changes in venue for commercial-insured patients younger than age 65 has provided support for safe outpatient total joint arthroplasty in hospital, HOPD, and ASC settings. In addition, Medicare Advantage (MA) Part C plans, managed by commercial insurers, have demonstrated, and in some cases required, outpatient total joint replacements for covered seniors in hospital and HOPD settings. The number of MA beneficiaries has grown annually and now represents approximately 30 percent of Medicare enrollees nationwide.

In 2017, AAHKS surveyed its membership on this issue; the majority voted to remove both TKA and THA from the IPO list. At its 2017 fall meeting, the AAOS Board of Councilors (BOC)—which is representative of state, regional, U.S. territories, and U.S. military—also voted, by a two-thirds majority, to remove TKA and THA from the IPO list. The AAOS Board of Specialty Societies (BOS), representing 23 orthopaedic specialty societies, also voted by a majority to remove TKA and THA from the IPO list.

Specific concerns
Robust discussion regarding the potential impact of this action took place both before and after these votes. One issue raised was a possible re-evaluation by CMS of the work relative value units (RVUs) attributable to total joint arthroplasty. Because TKA is in the top 10 percent cost group for CMS, the work RVUs for this procedure can be revalued at anytime. But if more than 50 percent of arthroplasty surgeries move from the inpatient setting to an outpatient or ASC setting, reimbursements may be decreased for all TKAs and THAs.

Several fellows have expressed other concerns. When and if inpatient utilization of TKA in the Medicare population drops below 50 percent, current rules require that CMS collect 3 years of data before recommending a valuation survey. With the new HOPD policy in effect as of Jan. 1, 2018, the Relativity Assessment Workgroup of the Relative Value Update Committee (RUC) could recommend the TKA Current Procedural Terminology code 27447 for review, at the earliest, in 2021. A RUC review will likely result in reduced work RVUs and lead to under-reimbursement of inpatient TKAs.

CMS is preventing site of service review on TKA for 2 years. However, the BPCI will end in September 2018 and the Comprehensive Care for Joint Replacement (CJR) initiative will end in December 2020—before a review can be conducted. CMS expects that only a small number of procedures will be performed in the outpatient setting initially, while higher risk patients will remain in the inpatient setting. The effect on episode of care payments is unknown, but the probability is that shared savings will be reduced.

The law requires a 3-day hospital stay before CMS will cover costs incurred in a Medicare subacute nursing facility, making an outpatient TKA a riskier prospect. Fear of an unexpected need for inpatient rehabilitation is likely to deter many otherwise appropriate candidates from undergoing an outpatient procedure, keeping numbers low. However, MA plans are not bound by the 3-day requirement, and CMS has issued waivers for some shared-savings models. CMS may need to find a way to address this issue before any significant shift in site of service will be realized.

Additionally, while AAOS requested further data and a transitional approach in the move to ASCs, it will also engage with CMS to ensure this next step happens as soon as possible. At the time comments were submitted, it was determined that this stepwise approach was the most appropriate way forward. Thus, before CMS allows a move to ASCs or similar changes for THA, data will be collected and patient safety will be assessed. If there is a growing problem, the AAOS Office of Government Relations (OGR) and the Council on Advocacy will work on the legislative and regulatory fronts to modify this decision. Further, AAOS aggressively advocated for total ankle arthroplasty, total shoulder arthroplasty, and others to be removed from the IPO list. CMS chose not to remove these procedures but acknowledged that it will take these requests into consideration.

In summary, given the current RUC rules, the removal of TKA from the IPO is unlikely to affect AAOS fellows in the near future; however, a shift in site of service can potentially lead to under-reimbursement for inpatient procedures. At this point, it appears change will be slow and the number of TKA patients moving to the HOPD setting will likely be low for the near future. The AAOS OGR will continue to monitor and advise CMS to minimize any risk of under-reimbursement and address any future issues related to the IPO.

Wilford K. Gibson, MD, FACS, FAOA, FAAOS, chairs the AAOS Council on Advocacy and is a member of the AAOS Now editorial board.

Dena McDonough PA-C, MHCDS, is manager, payment policy; and Shreyasi Deb, PhD, MBA, is senior manager, health policy in the AAOS OGR.