Published 12/31/2023
Courtney Ihaza, MPH; Shreyasi Deb, PhD, MBA

CMS Finalized Changes for 2024 Medicare Payment Systems

Updated rules will negatively impact physician reimbursement

Late in 2023, the Centers for Medicare & Medicaid Services (CMS) finalized changes for the 2024 Inpatient Prospective Payment System (IPPS), Medicare Physician Fee Schedule (MPFS), and Outpatient Prospective Payment System (OPPS)/Ambulatory Surgical Center (ASC) Payment System. Below are summaries for each of the final rules, as well as AAOS’ position on how the changes will impact musculoskeletal care in the year ahead.

In its comments to the proposed versions of these rules, released in summer 2023, AAOS strongly urged CMS to address healthcare costs and problems in the Medicare program and create a more equitable healthcare system that results in better care accessibility, quality, affordability, and innovation. AAOS is committed to enhancing the overall quality of musculoskeletal care, optimizing the professional environment for orthopaedic surgeons, and working toward a healthcare system that is inclusive and accessible. CMS can facilitate provision of high-quality healthcare by reducing meaningless prior authorizations and other practice burdens for practitioners and by improving the physician reimbursement system in the Medicare program.

IPPS final rule
In the fiscal year (FY) 2024 Medicare IPPS rule, CMS finalized the removal of the Hospital-Level Risk-Standardized Complication Rate (RSCR) Following Elective Primary Total Hip Arthroplasty and/or Total Knee Arthroplasty (THA/TKA) measures from the Hospital Inpatient Quality Reporting Program beginning on April 1, 2025. Simultaneously, CMS also included the Hospital-Level RSCR Following Elective Primary THA/TKA measures in the Hospital Value-Based Purchasing Program (VBP). Under the Hospital VBP, CMS finalized a proposal to adopt substantive modifications to this measure, adding more mechanical complications ICD-10 codes, beginning with the FY 2030 program year. AAOS supported the inclusion of the additional ICD-10 codes.

For physician-led hospitals, CMS finalized that for a hospital to receive Medicare payment for services referred by a physician owner or investors, the hospital must satisfy all the requirements of the whole hospital exception or the rural provider exception to the physician self-referral law (commonly known as the Stark law).

MPFS final rule
The calendar year (CY) 2024 MPFS finalized a conversion factor of $32.74, a 3.4 percent decrease from the CY 2023 conversion factor of $33.89. AAOS continues to advocate for Congress to stop these cuts and, thereafter, create an annual inflationary update for the MPFS to stabilize the Medicare physician payment system and make physician practices sustainable.

CMS also finalized the implementation of the Healthcare Common Procedure Coding System (HCPCS) add-on code G2211 to be used for complex evaluation and management visits. However, G2211 is duplicative of work already represented by existing codes and contributes to the reduction in the conversion factor due to budget neutrality requirements. AAOS opposes this implementation, as the code is expected to negatively impact surgical specialties, including orthopaedics.

The CPT code 27279, Arthrodesis, sacroiliac joint, percutaneous or minimally invasive (indirect visualization), with image guidance, includes obtaining bone graft when performed, and placement of transfixing device (90-day global code), was deemed to be adequately valued by CMS. AAOS has previously expressed concern to CMS that the procedure codified by 27279 cannot be safely implemented and performed in a non-facility setting. AAOS is pleased that CMS is not finalizing this code as potentially misvalued.

Additionally, CMS highlighted the importance of Medicare telehealth services and finalized separate payment for CPT codes 99441 to 99443 on the Medicare Telehealth Service List to remain actively priced through 2024. AAOS appreciates CMS’ extension of waivers for telehealth flexibilities and is pleased to see that CMS is proposing to sunset the Appropriate Use Criteria (AUC) for advanced diagnostic imaging. Although AAOS is supportive of programs that improve quality and reduce unnecessary testing, it has always been concerned that the implementation of this AUC program will detract from the developments in the Quality Payment Program made in the years since the AUC program was signed into law.

In response to the Merit-Based Incentive Payment System (MIPS) “Low Back Pain” episode-based cost measure outlined in the proposed rule, AAOS argued that orthopaedic surgeons should be removed from the list of specialties eligible for attribution. Instead, AAOS urges CMS to consider creating longitudinal care episodes where nonoperative management of chronic musculoskeletal conditions is appropriately attributed to orthopaedic surgeons. CMS disagreed with this recommendation and finalized the MIPS Low Back Pain cost measure with a 20-episode case minimum. This cost measure is included in the “Rehabilitative Support for Musculoskeletal Care” MIPS Value Pathway finalized by the same rule. Lastly, CMS is finalizing the inclusion of Q487: Screening for Social Drivers of Health as proposed for the 2024 performance year/2026 payment year and future years.

OPPS final rule
The CY 2024 OPPS final rule sets policy for hospital outpatient departments and ambulatory surgical centers participating in the Medicare program. Although CMS did not remove any services from the Inpatient-Only List for CY 2024, CMS added several musculoskeletal HCPSC codes to the ASC Covered Procedure list nomination, including:

  • code 23472, Arthroplasty, glenohumeral joint; total shoulder
  • code 27006, Tenotomy, abductors and/or extensor(s) of hip
  • code 27702, Arthroplasty, ankle; with implant (total ankle)
  • code 29868, Arthroscopy, knee, surgical; meniscal transplantation

CMS also finalized adoption of the Risk-Standardized Patient-Reported Outcome-Based Performance Measure Following Elective Primary THA/TKA in the Hospital Outpatient Department Setting. The voluntary reporting period is CY 2025 through CY 2027, followed by mandatory reporting beginning 1 year later than initially proposed, with the CY 2028 reporting period/CY 2031 payment determination.

AAOS is appreciative of CMS’ efforts to increase access to innovative technologies for Medicare beneficiaries. CMS finalized policies on several devices impacting orthopaedics:

  • CERAMENT G: This single-use implantable bone void filler combination device/drug remodels into bone and elutes gentamicin. Beginning Jan. 1, CMS finalized the approval for device pass-through payment status for CERAMENT G under the alternative pathway for devices that have an FDA Breakthrough Device designation and received FDA marketing authorization for the indication covered by the Breakthrough Device designation.
  • Spinal Injection Service (APC 5115): For APC 5115 (Level 5 Musculoskeletal Procedure), CMS finalized a payment rate of $13,269.40 and assigned the following CPT codes:
    • 0627T, Percutaneous injection of allogeneic cellular and/or tissue-based product, intervertebral disc, unilateral or bilateral injection, with fluoroscopic guidance, lumbar; first level
    • 0629T, Percutaneous injection of allogeneic cellular and/or tissue-based product, intervertebral disc, unilateral or bilateral injection, with CT guidance, lumbar; first level
  • HCPCS code C1734: For code C1734, Orthopedic/device/drug matrix for opposing bone-to-bone or soft-tissue-to-bone (implantable), the pass-through status expiration date was Dec. 31, 2023.
  • Barricaid Spine/Lumbar Disk Surgery (APC 5115): CMS is finalizing the proposal to assign HCPCS code C9757 to APC 5115, with one modification to the code’s short descriptor (Spine device implant surgery) to clarify that a device must be implanted each time the service is performed.

CMS is revising several of its hospital price transparency requirements to improve monitoring and enforcement capabilities by increasing access to and usability of hospital standard charge information. As part of its commitment to facilitating effective care, AAOS supports the efforts to provide patients with easily understandable cost and quality information.

Read a summary from AAOS on the OPPS final rule and the MPFS rule.

Courtney Izaha, MPH, is manager of regulatory advocacy in the AAOS Office of Government Relations in Washington, D.C.

Shreyasi Deb, PhD, MBA, is senior director of health policy in the AAOS Office of Government Relations in Washington, D.C.