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Published 1/1/2018
Elizabeth Fassbender, Esq.

CMS Announces Final Rules Impacting Orthopaedic Surgeons

Rules apply to total knee arthroplasty, Medicare payments
In November 2017, the U.S. Centers for Medicare & Medicaid Services (CMS) finalized several rules that impact the orthopaedic community. They include the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System rule, the Medicare Physician Fee Schedule (PFS) rule, and the rule for the second year of the Quality Payment Program (QPP).

The OPPS final rule, which includes updates to 2018 rates and quality provisions, finalizes important changes to the Medicare inpatient-only (IPO) list for CY 2018. AAOS recognizes CMS for removing total knee arthroplasty (TKA) from the IPO list and for highlighting that this decision should be “made by the physician based on the beneficiary’s individual clinical needs and preferences.” AAOS further acknowledges CMS for noting that “the surgeons, clinical staff, and medical specialty societies who perform outpatient TKA and possess specialized clinical knowledge and experience” are most suited to create guidelines to identify appropriate candidates. AAOS is currently developing measures to assist selection of the ideal candidate for these procedures.

“AAOS supports the removal of TKA from the IPO list,” wrote AAOS President William J. Maloney, MD, in the proposed rule comment letter. “The determination of how to best provide adequate and timely care to a Medicare beneficiary should fall under the purview of the patient-surgeon relationship, as these are the individuals who shoulder the risk of these procedures… [Further,] AAOS is currently developing outcomes measures to assist optimal selection of the ideal candidate for these procedures. The medical specialty societies engaged in such activities are best positioned to develop evidence-based patient selection and exclusionary criteria for determining the clinical acceptability of performing TKA as an outpatient procedure.”

Although AAOS suggested that total ankle arthroplasty, total shoulder arthroplasty, and other procedures also be removed from the IPO list, CMS chose not to do so, allowing for further discussion. They acknowledged, however, that they will take these requests into consideration.

Further, while CMS is not adding TKA to the ASC-covered surgical procedures list for CY 2018, AAOS is encouraged by the progress announced in the final rule and will work closely with CMS to ensure this important next step happens as soon as possible. AAOS looks forward to continuing to work with CMS on this and other outpatient and ambulatory surgery center issues.

Finally, in a press release, CMS also emphasized drug prices and rural communities, noting that the OPPS payment rule “will lower out-of-pocket drug costs for people with Medicare and empower patients with more choices.” According to CMS, the rule “finalized today increase access to care” and “takes steps to preserve access in rural communities.”

“As part of the president’s priority to lower the cost of prescription drugs, Medicare is taking steps to lower the costs Medicare patients pay for certain drugs in the hospital outpatient setting. Medicare beneficiaries would benefit from the discounts hospitals receive under the 340B Program by saving an estimated $320 million on copayments for these drugs in 2018 alone,” said Seema Verma, MPH, administrator of CMS.

The Medicare PFS final rule includes updates to payment policies, payment rates, and quality provisions for services furnished on or after Jan. 1, 2018. The QPP final rule covers CY 2018 and “includes policies that reduce burden and support clinicians in small and rural practices to successfully participate in this program,” CMS noted. According to CMS, these rules reflect a broader Administration-wide strategy to create a healthcare system that results in better accessibility, quality, affordability, empowerment, and innovation.

CMS emphasized that stake­holder feedback “is a very important part of the Quality Payment Program.” As a result, the agency has been using feedback to ensure that the program’s measures and activities are meaningful, clinician burden is minimized, care coordination is improved, and clinicians have a clear way to participate in Advanced Alternative Payment Models.

“In Year 2, we are keeping many of the flexibilities from the transition year to help clinicians get ready for Year 3,” the agency stated. “The Quality Payment Program makes major changes to how Medicare pays clinicians. We’ve heard challenges and concerns from stakeholders, so we will keep going slow while preparing clinicians for full implementation in Year 3, providing more flexibility to help reduce your burden, and offering new incentives for participation.”

In comments to CMS on the proposed rule, AAOS applauded the increase in the low-volume threshold, noting that this will give clinicians in solo and small practices more time to prepare and meet the participation requirements. However, AAOS emphasized that there must still be more pathways for specialists to participate in the Quality Payment Program through the Advanced Alternative Payment Model (APM) track. AAOS also commented on new proposals for virtual groups and the need for provision of clinician/practice data. In addition, the comments stressed that AAOS looks forward to engaging with CMS “on developing outcome based measures for musculoskeletal care as well as on redesigning Medicare value-based payment models such that they are voluntary, physician-led, have accurate price setting, and provide access to data for all participants.”

Finally, CMS recently launched the “Patients Over Paperwork” Initiative, a cross-cutting, collaborative process that evaluates and streamlines regulations to reduce unnecessary burdens for physicians, increase efficiencies, and improve the beneficiary experience. AAOS attended the meeting where the initiative was launched and had the opportunity to engage with Ms. Verma. According to CMS, this effort emphasizes a commitment to removing regulatory obstacles that get in the way of providers spending time with patients. As part of the initiative, the Medicare PFS final rule includes reducing reporting requirements, and removing downward payment adjustments based on performance for practices that meet minimum quality reporting requirements.

Elizabeth Fassbender, Esq., is the communications manager in the AAOS Office of Government Relations. She can be reached at

Additional Information:
Read the full AAOS comments on the OPPS proposed rule.

A fact sheet on the OPPS final rule with comment period.

To read the full AAOS comments on the Quality Payment Program proposed rule:
The Quality Payment Program final rule with comments can be downloaded from the Federal Register.

For an overview of the final rule with comment.

For an executive summary of the rule.

Read the full AAOS comments on the Physician Fee Schedule proposed rule.

Read more about the Physician Fee Schedule.